MBS ETFs were solid performers for some time, aided by the Federal Reserve’s quantitative easing program that, at its height, saw the central bank gobble up around 50% of monthly gross issuances of mortgage debt. MBS funds did, however, prove vulnerable last year when talk of QE tapering escalated. [Taper Talk Pressures MBS ETFs]
MBS ETFs have solid this year as 10-year Treasury yields have plunged and investors have adjusted to the Fed’s QE reductions.
“With our ongoing focus on real-world investor needs, we developed this Fund as an income generation tool that offers investors the unique characteristics of the mortgage-backed securities (MBS) sector,” said Shundrawn A. Thomas, executive vice president and head of Northern Trusts’ Funds and Managed Accounts Group, in the statement. “The FlexShares Disciplined Duration MBS Index Fund is designed to help investors generate income and diversify their fixed income exposure while dampening the volatility that can result from duration risk.”
MBSD charges 0.2% per year.
ETF Trends editorial team contributed to this post.