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iShares Mortgage Real Estate Capped ETF (REM)

- NYSEARCA
  • Wed, Mar. 18, 2:30 PM
    • Worries about a sharply flatter yield curve abate just a bit as the FOMC drops "patient" from its policy statement - putting rate hikes on the table at subsequent meetings - but Fed economic projections send a dovish signal, with outlooks for economic growth, inflation, and the pace of rate hikes all cut from previous estimates.
    • Outperforming the averages: Annaly Capital (NLY +1.1%), American Capital Agency (AGNC +1.5%), Two Harbors (TWO +1.5%), CYS Investments (CYS +2%), Invesco (IVR +1.7%), Hatteras (HTS +1.7%), Capstead (CMO +2.1%), MFA Financial (MFA +1.7%), Anworth (ANH +2.2%), Dynex (DX +1.5%), Five Oaks (OAKS +3.3%).
    • ETFs: REM, MORT, MORL
    • Previously: FOMC drops "patient," but sends dovish signal (March 18)
    | 9 Comments
  • Fri, Mar. 6, 10:21 AM
    • The 10-year Treasury yield has popped all the way to 2.24% (up 11 bps on the session) following the strong jobs report which saw 295K jobs added in February and the unemployment rate dropping to 5.5%.
    • Checking short-term interest rate futures, they're falling (meaning higher rates), but still not pricing in a rate hike until late summer.
    • Annaly Capital (NLY -1.3%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -1%), Armour (ARR -0.9%), Invesco (IVR -0.9%), CYS Investments (CYS -1.4%), Hatteras (HTS -1.1%), MFA Financial (MFA -1.1%), Western Asset (WMC -0.7%), Dynex (DX -1.2%), AG Mortgage (MITT -1.5%), Ellington Residential (EARN -1.1%).
    • ETFs: REM, MORT, MORL
    • Previously: Dollar and Treasury yields spike after strong jobs print (March 6)
    | 44 Comments
  • Tue, Feb. 3, 3:52 PM
    • Unable to put any sort of positive move together even as interest rates tumbled this year, mREITs (REM +0.9%) are uniformly higher this session as the 10-year yield jumps 11 basis points to 1.78%.
    • American Capital Agency (AGNC +1.3%) reported better-than-hoped Q4 results last night, but has altered its mix of portfolio holdings and hedges to brace for what it expects will be a wave of prepayments. If rates keep this up, those prepayments may not materialize.
    • Annaly (NLY +1.1%), Chimera (CIM +1.5%), CYS Investments (CYS +1.3%), American Capital Mortgage (MTGE +1.8%), Hatteras (HTS +1.1%), MFA Financial (MFA +1.3%), Western Asset (WMC +1.8%), Dynex (DX +1.1%), Ellington Financial (EFC +1.2%).
    | 18 Comments
  • Mon, Feb. 2, 12:16 PM
    • Non-agency REITs likely fared best in Q4 says the team as credit assets outperformed and were in less need of hedging against higher rates. Two of note are outperform-rated Apollo Residential Mortgage Trust (AMTG -1.2%) and neutral-rated MFA Financial (MFA -1.7%).
    • Agency players, however, were more likely to have positioned themselves for higher rates and should see more limited boosts in book value. Two of note are Annaly Capital (NLY -1.3%) and Western Asset Management (WMC -0.1%) - both neutral-rated.
    • "While the Q4 rally in rates likely drove BVs higher than we previously assumed, in our view it only forestalls the drag from rising rates on future book value," says JPMorgan, cutting price targets on Annaly, American Capital Agency (AGNC -1%), Two Harbors (TWO -1%), Apollo Residential, and Western Asset.
    • Capstead Mortgage already reported its Q4 and results were uninspiring (book value actually slipped a bit).
    • Up after the bell tonight is American Capital Agency.
    • Previously: Credit Suisse downgrades three mortgage REITs (Feb. 2)
    • ETFs: REM, MORT, MORL
    | 1 Comment
  • Wed, Jan. 28, 4:05 PM
    • The iShares Barclays MBS Bond Fund (MBB +0.2%) hit a new lifetime high, which should be good for the book values of mortgage REITs (assuming they weren't too hedged), but the yield curve continues to sharply flatten. The 10-year Treasury yield is all the way down to 1.71% and the 30-year at a record-low 2.29% - this as the Fed says it's on track for a mid-year rate hike.
    • In addition to shaving margins for leveraged holders of mortgages, the lower rates could result in another refinance wave, and thus a surge in prepayments.
    • Annaly Capital (NLY -1%), American Capital Agency (AGNC -1.6%), Armour Residential (ARR -0.7%), Hatteras Financial (HTS -0.7%), Western Asset (WMC -2.2%), Apollo Residential (AMTG -0.7%)
    • ETFs: REM, MORT, MORL
    • Previously: Bond yields slide after FOMC (Jan. 28)
    • Previously: FOMC: Still "patient," but rate hike remains on the way (Jan. 28)
    | 9 Comments
  • Tue, Jan. 27, 10:09 AM
    • The sector (REM -0.3%) has outperformed both the market and the financials so far this year, but, say KBW's Michael Widner and Eric Hagen in a report titled "mREITs: Safe Haven or Sinking Ships," that's thanks to multiple expansion. The two say book values are likely down 5% from Q3, on average.
    • Adding to that are worries about a prepayment wave and a flatter yield curve.
    • "On balance KBW comes out somewhere in the middle, but with a view of risks skewed a bit to the downside."
    • Their top pick is Two Harbors (TWO -0.4%), which they say is very well hedged against both rising and falling rates. "At 0.92x our mark-to-market book value estimate it’s not the most discounted name in the space, but taking both the valuation and portfolio composition into account we believe it offers the group’s best risk adjusted return outlook today."
    • ETFs: MORT, MORL
    | Comment!
  • Wed, Jan. 14, 1:17 PM
    • Agency MBS are off to their worst start relative to Treasurys since 1997 as the big drop in interest rates has investors nervous about a surge in refinancing. Returns on paper backed by Fannie, Freddie, or Ginnie Mae are 60 basis points less than those on Treasurys of similar duration so far this month.
    • Also stoking the trend are changes to government programs aimed at making mortgage credit easier to obtain.
    • Earlier today, the MBA reported applications for home-loan refis jumped 66% last week.
    • Prices of agency MBS currently average 106.5 cents on the dollar, meaning owners would lose 6.5% if immediately repaid.
    • Annaly Capital (NLY -1.3%), American Capital Agency (AGNC -1.2%), Armour Residential (ARR -2%), Two Harbors (TWO -0.9%), Invesco Mortgage (IVR -1.9%), American Capital Mortgage (MTGE -1.3%), Dynex (DX -0.5%), Apollo Residential (AMTG -1.2%), Anworth (ANH -0.9%), Western Asset (WMC -1.6%).
    • ETFs: REM, MORT, MORL
    | 41 Comments
  • Mon, Jan. 12, 10:03 AM
    • The mortgage REIT space (REM -0.6%) is cut to Market Weight from Overweight at Wells Fargo, with Annaly Capital (NLY -0.4%), American Capital Agency (AGNC -0.2%), CYS Investments (CYS -0.7%), Capstead Mortgage (CMO -0.8%), American Capital Mortgage (MTGE -0.5%), AG Mortgage (MITT -1.3%), and MFA Financial (MFA -0.3%) - for now - individual names also being cut to Market Weight.
    • It's an interesting move, especially in light of the significant discounts to book value nearly every stock in the sector trades at. The mortgage REITs have been especially notable of late for not being able to make any headway alongside the big rally in bond prices. Lower rates might do something for book values, but the sharply flatter yield curve (which could flatten even more once the Fed begins hiking) doesn't bode well for earnings power.
    • Other ETFs: MORT, MORL
    | 45 Comments
  • Tue, Jan. 6, 2:17 PM
    • The 10-year yield has plunged all the way down to 1.94% and one would figure on some nice increases in book value for the mortgage REITs (REM -0.1%), but on the flip side are narrowing interest rate spreads (especially as the Fed still seems to be intent on hiking short rates), and what hedging losses the companies are taking.
    • Other ETFs: MORT, MORL
    • Individual names: Annaly Capital (NLY +0.4%), American Capital Agency (AGNC), Armour Residential (ARR -1%), CYS Investments (CYS -0.2%), Invesco Mortgage (IVZ -2.7%), New York Mortgage Trust (NYMT -0.5%), Hatteras Financial (HTS -0.3%), Western Asset Mortgage (WMC -2.7%), Ellington Residential (EARN -0.4%), Javelin Mortgage (JMI -3%).
    | 20 Comments
  • Dec. 9, 2014, 12:57 PM
    • Unable to catch a bid for a few sessions, mortgage REITs (REM +1%) have turned higher in afternoon action, led by Annaly (NLY +0.7%) and American Capital Agency (AGNC +1.5%).
    • Helping are jitters in the stock market (though U.S. averages are well off the lows), and a 10-year Treasury yield that's retreated all the way to 2.21% after hitting the mid-2.30s on the back of Friday's strong jobs number.
    • Armour (ARR +1.1%), Two Harbors (TWO +0.9%), CYS Investments (CYS +1.4%), Invesco (IVR +1.8%), American Capital Mortgage (MTGE +1%), Hatteras Financial (HTS +2%), Capstead (CMO +2%).
    • Other ETFs: MORT, MORL
    • Also showing some green are the recently beaten-up BDCs, including Prospect Capital (PSEC +0.2%), Fifth Street Finance (FSC +0.2%), Ares Capital (ARCC +0.5%), FS Investment (FSIC), Triangle Capital (TCAP +1.7%).
    • ETFs: BDCL, BDCS, BIZD
    • Previously: Money flows back into fixed income (Dec. 9, 2014)
    | 16 Comments
  • Dec. 5, 2014, 10:12 AM
    | 33 Comments
  • Nov. 19, 2014, 3:42 PM
    • A check of the mortgage REITs following FOMC minutes which shows the discussion moving a bit more seriously towards rate hikes finds the sector (REM -0.5%) modestly lower.
    • Individual names: Annaly (NLY -0.3%), American Capital Agency (AGNC), CYS Investments (CYS -0.3%), Invesco Mortgage (IVR -0.9%), New York Mortgage Trust (NYMT -0.4%), Hatteras Financial (HTS -0.8%), MFA Financial (MFA -1%), Capsteam Mortgage (CMO -0.6%), Ellington Residential (EARN -0.4%).
    | 8 Comments
  • Nov. 5, 2014, 1:27 PM
    • The First Trust Emerging Markets Local Currency Bond ETF (NASDAQ:FEMB) is an active fund that seeks to maximize total return and income, while also minimizing volatility, by investing in bonds that are denominated in the issuer's local currency.
    • Another active fund, the First Trust Low Duration Mortgage Opportunities ETF (NASDAQ:LMBS) will invest at least 80% of its net assets in investment-grade, mortgage-related debt securities and other mortgage-related instruments in the search of current income for investors.
    • "These funds provide a strategy for investors to gain exposure to two fixed income sectors in which we believe in-depth research and analysis, along with ongoing surveillance, can add significant value for investors," said Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust, in a press release.
    • The third fund launched by the group today was the First Trust International IPO ETF (NASDAQ:FPXI), which tracks a basket of the 50 largest and typically most liquid companies that are domiciled outside the U.S. within the IPOX Global Composite Index.
    • Other emerging market bond ETFs: EMB, PCY, ELD, EMLC, VWOB, LEMB, EMAG, EBND, EMSH
    • Other mortgage REIT ETFs: REM, MORL, MORT
    • Other IPO ETFs: FPX, IPO, IPOS
    | Comment!
  • Oct. 29, 2014, 1:43 PM
    • Fed purchases of mortgage-backed securities are ending today, but reinvestments are likely to keep a firm bid in the market, says Deutsche's MBS team. The "real risk" to the MBS market won't come until the Fed ends reinvestments - early 2016 at the soonest, and maybe not until 2017.
    • QE's end, says the team, leaves the Fed with $1.7T in MBS holdings and private investors with just $3.5T. The Fed's massive holdings - 1/3 of the universal amount, but 1/2 of dollar duration - keep a source of volatility out of the market.
    • The end of the Fed as a net buyer will be about the first time since the early 1990s when MBS haven't been getting a bid from either the GSEs, Treasury, or Fed.
    • ETFs" REM, MORT, MORL
    • Names of interest: Annaly (NLY -1.6%), American Capital Agency (AGNC -2.5%), Armour (ARR -1.2%), Hatteras (HTS -1.6%), CYS Investments (CYS -1.7%)
    | 7 Comments
  • Oct. 24, 2014, 7:07 AM
    | 3 Comments
  • Oct. 13, 2014, 4:19 PM
    • Both equity and mortgage REITs saw plenty of buying as nearly all of the rest of the market was lit up bright red, and Treasury ETFs signaled a sharp drop in yields when government bonds reopen for trade tomorrow (closed this session for Columbus Day).
    • A sampling of equity names: Senior Housing Properties (SNH +1.2%), Medical Properties Trust (MPW +1.4%), Gramercy Property Trust (GPT +1.7%), Equity Residential (EQR +0.7%), Inland Real Estate (IRC +0.9%), Sovran Self Storage (SSS +1.1%), Highwoods Properties Trust (HIW +1%).
    • One equity REIT sector in the red along with the rest of the market is lodging amid worsening Ebola fears: Ashford Hospitality Trust (AHT -2.9%), Sunshine Hotel Investors (SHO -1.4%), LaSalle Hotel Properties (LHO -1.5%), Summit Hotel Properties (INN -1.5%).
    • Mortgage REITs: American Capital Agency (AGNC +1.4%), CYS Investments (CYS +2.2%), Invesco (IVR +1.1%), American Capital Mortgage (MTGE +1.5%), Western Asset (WMC +1.1%).
    • ETFs: IYR, VNQ, REM, MORL, MORT, DRN, URE, REZ, SRS, RWR, SCHH, ICF, ROOF, DRV, KBWY, RTL, REK, FRI, FTY, PSR, IFNA, FNIO, WREI
    | 5 Comments
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REM Description
The iShares FTSE NAREIT Mortgage Plus Capped Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE NAREIT All Mortgage Capped Index.
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