There are still options for fixed income in today’s low-rate environment. The VanEck Vectors Mortgage REIT Income ETF (MORT) offers an almost 10% 30-day SEC yield.
MORT seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS® US Mortgage REITs Index (the “Mortgage REITs Index”). The fund normally invests at least 80% of its total assets in securities that comprise the fund’s benchmark index.
The Mortgage REITs Index may include small-, medium-, and large-capitalization companies. The fund has a net expense ratio of 0.41%.
MORT gives the discerning ETF investor access to:
- High Dividend Yield Potential: In recent years, yields from mortgage REITs have been higher than those of equity REITs and many income-oriented securities
- Pure Mortgage REIT Exposure: Tracks an index that offers pure play exposure to mortgage REITs
- An Industry in Transition: Mortgage REITs may potentially stand to benefit from the evolving mortgage finance market but are sensitive to interest rate and regulatory changes
Rates are at historical lows, which should help fuel purchases for prospective real estate owners.
In the meantime, getting the yield investors desire continues to be a challenge.
″[We have] an income crisis in this country,” said Will Rhind, the founder and CEO of GraniteShares, in a CNBC interview. “Before Covid, … getting 5% income in a portfolio was probably somewhat optimistic. But that 5% has now become 3% or lower in this particular pandemic scenario, so, now you’ve got a situation where people are looking for income like they never have before.”
Real Estate in a State of Flux
The pandemic is certainly changing the landscape of real estate, but while it’s in a state of flux, the need to finance real property remains. More than ever, real property owners are seeking homes as their live-work space, which will require mortgage financing–a good sign for MORT.
“In just a matter of months the coronavirus pandemic dramatically changed the landscape of the housing market, especially in big cities. But now news of a promising vaccine could turn the market on its head again,” a CNN article noted. “Nationally, home prices have never been higher, driven up as surging demand due to record low mortgage rates comes up against historically low inventory of homes for sale.”
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