Record trading volume in a mortgage REIT exchange traded fund on Wednesday suggests an investor scooped up a large chunk of shares in a fund that is currently yielding more than 10%.
Nearly 1.3 million shares of Mortgage REIT Income ETF (NYSEArca: MORT) changed hands on Wednesday, which doubles the fund’s previous one-day volume record.
The trade appears to be a large block buy of MORT and would represent about 12 times the ETF’s average daily volume, according to WallachBeth Capital. If it is an inflow, the trade would drive a 25% increase in shares outstanding.
“The trade comes on the same day that MBA Mortgage Association announced a 1.2% drop in applications, having now dropped six weeks in a row,” WallachBeth said in a note. The trading volume spike also follows a recent decline in the ETF as Treasury yields rose.
As of July 24, the mortgage REIT ETF held about $102 million in assets and paid a 30-day SEC yield of 12.23%, according to Market Vectors, the ETF unit of Van Eck Global.
The iShares Mortgage Real Estate Capped ETF (NYSEArca: REM) is the other fund in the category. It yields 13.77%, according to manager BlackRock. The ETF is larger than MORT with nearly $1 billion of assets.
The mortgage REIT ETFs saw their share prices weaken in May and June as interest rates rose. [Mortgage REIT ETFs Slammed]