Mortgage REIT ETFs: New Value Plays

In bid to lure income-starved investors back, mREITs  are reducing their use of borrowed money, boosting interest-rate hedges, shifting to short-term debt and adding cash reserves in preparation of Fed tapering.

The risk for ETFs like MORT and REM and their holdings is that scorned retail investors that previously bolstered the asset will either not return or continue to depart on tapering fears. That could give professional money managers pause before adding to existing positions or initiating new buys in mREIT stocks and ETFs.

iShares Mortgage Real Estate Capped ETF

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of REM.