Mortgage-backed securities are seeing greater interest and just got a vote of confidence from the largest sovereign wealth fund. The Norges Bank Investment Management (NBIM), which oversees Norway's $2.3 trillion sovereign wealth fund, proposed cutting its government bond allocation and rotating into mortgage-backed securities (MBS).
There is a growing category of high-yield ETFs that generate income by selling options on equity indexes, and for the right investor, they serve a purpose.
Janus Henderson Mortgage-Backed Securities ETF focuses on high-quality MBS assets of moderate duration. The fund's high-quality portfolio sees below-average drawdowns and volatility, while its 5.5% dividend yield ensures a reasonably good amount of income for investors. Returns have been reasonably good since inception, with the fund outperforming its benchmark.
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| BZ Brandon Zatopek Commonwealth Equity Services LLC | 118,097 | $5.31M | $5.03M | -$278,724.89 | -5.25% |
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 39,656 | $1.8M | $1.69M | -$106,890.54 | -5.95% |
| JW Jamie Wilson CAPITAL ADVISORS Inc./OK | 1.05M | $52.21M | $44.79M | -$7.42M | -14.22% |
| JC JT Casper ORLEANS CAPITAL MANAGEMENT Corp./LA | 6,234 | $280,730 | $267,126.9 | -$13,603.1 | -4.85% |
| MWH Michael W. Hazelwood ARVEST INVESTMENTS Inc. | 643,610 | $29.4M | $27.65M | -$1.75M | -5.96% |
| ARCA Exchange | US Country |
The fund is dedicated to achieving its investment objective by focusing primarily on mortgage-related instruments. It operates with a strategy that involves investing at least 80% of its net assets, and often substantially all, in a diversified portfolio of mortgage-related fixed income instruments that vary in maturities. This approach highlights the fund’s commitment to capitalizing on the opportunities within the mortgage market, aiming to provide returns through careful selection and management of mortgage-related securities. Additionally, the utilization of derivatives plays a part in the fund's investment strategy, providing a means to potentially enhance returns or manage risk within the portfolio.
The fund offers a specialized investment opportunity through its focus on mortgage-related instruments and the use of derivatives. Below is a detailed explanation of its primary investment focuses: