MORT ETF

The VanEck Mortgage REIT Income ETF offers a high yield of 10.4%, but investors must understand its diverse composition and rates-driven nature. MORT includes a mix of Agency MBS REITs and real estate funds, all influenced by interest rates but with different risk factors. The ETF has benefited from recent lower rates, showing strong correlation with the iShares 7-10 Year Treasury Bond ETF, but remains cyclical.

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.

VanEck Mortgage REIT Income ETF provides exposure to mortgage real estate investment trusts (mREITs). mREITs as a whole are risky and have underperformed equity REITs in the long run. MORT has a concentrated portfolio because of its market-cap weighting approach, high expense ratio, and potential dividend instability, making it a risky investment.

MORT is a poorly performing income ETF with high risk and consistent losses. Investors seeking high yields should consider alternatives. With an unfavorable view of MORT, I offer my views as to why along with some alternatives.

VanEck's Mortgage REIT Income ETF warrants a sell rating due to its poor performance, weak holdings, and high volatility. MORT has underperformed compared to peer REIT ETFs, with a low 10-year CAGR and the highest expense ratio. Several of MORT's holdings, including Annaly Capital Management, AGNC Investment Corp., and Blackstone Mortgage Trust, have red flags that could lead to a reduction in dividend yield.

As high-yielding real-estate-related assets, mortgage REITs are correlated to interest rates. That explains why the VanEck Mortgage REIT Income ETF (MORT) has struggled this year.

With high interest rates and the increased probability of the Fed remaining hawkish for longer, look into how mREITS ETFs are affected after Q3 earnings results.

The VanEck Mortgage REIT Income ETF is difficult to justify in a portfolio due to high interest rates and a looming recession. The MORT ETF offers investors exposure to mortgage REITs, but its performance is heavily influenced by the dynamics of the mortgage market. Mortgage REITs are significantly affected by changes in interest rates, regulatory changes, and the overall health of the real estate market, posing risks for MORT's future performance.

Rising interest rates – the scenario market participants have dealt with dating back to early 2022 – have long weighted on high-yield asset classes. That's been true of the effects of Federal Reserve tightening on mortgage real estate investment trusts (mREITs).