MORT - MORT: A Levered Bet US Rates Have Peaked

2024-06-27 17:08:45 ET

Summary

• The VanEck Mortgage REIT Income ETF has over 99% exposure to US mortgage REITs.
• MORT has underperformed the S&P 500 both in 2024 and on a three-year timeframe.
• This is in large part due to the 2022-2023 Fed tightening cycle, with a reversal expected as soon as September.
• Top ten holdings account for 62.25% of the ETF's assets - perhaps too concentrated for an expense ratio of 0.43% annually.
• Leverage at the top ten holdings is around 4.9 times, boosting returns in a sideways/up market for real estate financing.

Introduction

The VanEck Mortgage REIT Income ETF ( MORT ) has materially lagged the SPDR S&P 500 ETF ( SPY ) so far in 2024, posting a small single-digit decline against a circa 15% gain for the broad market ETF:

For further details see: