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In this article, we dial in on the iShares MBS ETF (MBB) to garner an understanding of what's in store for mortgage-backed securities. The exchange-traded fund, or ETF, presents an exciting proposition amid a pending pivot in the
MBB ETF Is Not Your Typical MBS Vehicle
Summary
- iShares MBS ETF is a low-risk MBS vehicle with numerous talking points in store.
- The fund invests in high-grade mortgages backed by U.S. government agencies.
- We think its distributions will be sustained. However, its price return prospects remain at a crossroads.
- Risk premiums make for an interesting discussion as option-adjusted spreads have bottomed.
- In our view, the MBB ETF is a respectable asset. However, we fail to justify a "best in class" status.
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