Recent price weakness in this particular segment of the fixed income markets has drawn some interest in the Mortgage Backed Securities ETF category.
The giant in the space is MBB (iShares Barclays MBS Fixed Rate Bond, Expense Ratio 0.31%) with $6.7 billion in assets under management currently.
The fund itself has dropped rather suddenly in recent sessions, falling from an intraday high of $108.33 to current levels right on its 50 day MA ($107.75), although trading volume has been rather uneventful lately.
MBB yields 1.46% currently and invests in investment grade fixed rate mortgage backed securities that are issued by GNMA, FNMA, and FHLMC. [Investors Tap Mortgage Bond ETFs for Yield, Rate Protection]
Other ways for portfolio managers to get exposure, and potentially specialized exposure, to this segment of the bond market include VMBS (Vanguard Mortgage Backed Securities, Expense Ratio 0.12%), CMBS (iShares Barclays CMBS Bond, Expense Ratio 0.25%), GNMA (iShares GNMA Bond, Expense Ratio 0.32%), MBG (SPDR Barclays Capital Mortage Backed Bond, Expense Ratio, 0.20%) and COBO (ProShares USD Covered Bond, Expense Ratio, 0.35%).