Summary
MTBA Chart
MTBA: Agency MBS Carry, Limited Price Upside (Rating Downgrade)
Simplify MBS ETF is downgraded from buy to hold due to compressed mortgage spreads limiting price upside. MTBA's structural carry remains attractive, offering a 6.01% yield over the last 12 months, supporting its role as an income component. The ETF's active management and 0.15% expense ratio are justified by its strategy but are significantly higher than passive peers.
Non-Cuttable Expenses: A Hidden Opportunity For Financial Growth
Mortgages form the backbone of home affordability in America and represent an expense that cannot be cut without catastrophic household consequences. Utilities are in heavy demand, and operators can raise prices without losing customers. We discuss our top picks from these non-negotiable expenses, offering yields of up to 7.5%.
MTBA: High-Quality Agency MBS, Great Strategy, Above-Average Yield
The Simplify MBS ETF focuses on newly-issued agency mortgage-backed securities with high coupons. It sports a 6.0% dividend yield, backed by high-quality mortgages. Market conditions are quite favorable to MBS, with these securities outperforming treasuries and bonds for several years.
Simplify MBS ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| TJD Thomas John Drogan PR Inc.IPAL SECURITIES Inc. | 16,195 | $815,484.64 | $794,121.82 | -$21,362.82 | -2.62% |
| TC Tyler Chaisson COMPASS CAPITAL Corp. /MA/ /ADV | 168,906 | $8.42M | $8.28M | -$140,375.1 | -1.67% |
| JD Jim Dushek HARBOUR INVESTMENTS Inc. | 2,580 | $129,968.73 | $126,510.3 | -$3,458.43 | -2.66% |
 Jeff Ameen Spire Wealth Management | 22,100 | $1.09M | $1.08M | -$11,666.59 | -1.07% |
| RWM Revisor Wealth Management LLC Revisor Wealth Management LLC | 7,316 | $367,829.9 | $358,702.75 | -$9,127.15 | -2.48% |
Simplify MBS ETF (MTBA) FAQ
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Simplify MBS ETF Profile
| ARCA Exchange | US Country |
Overview
The fund primarily focuses on investing in mortgage-backed securities (MBS), dedicating at least 80% of its net assets to such investments. It aims to generate income by actively managing a portfolio that includes agency and non-agency residential or commercial MBS. Additionally, the fund utilizes financial instruments like futures, forwards, swaps, and options related to mortgage-backed securities to achieve its investment objectives. It targets MBS issued by prominent institutions such as the Government National Mortgage Association (Ginnie Mae), Federal National Mortgage Association (Fannie Mae), and Federal Home Loan Mortgage Corporation (Freddie Mac), seeking to leverage their market position and the ongoing demand for mortgage-backed securities.
Products and Services
- Government National Mortgage Association (Ginnie Mae) MBS
These securities are backed by the full faith and credit of the U.S. government, offering a safer investment avenue within the mortgage-backed securities market. This category includes various types of Ginnie Mae MBS, aiming to provide investors with reliable interest income while mitigating risk.
- Federal National Mortgage Association (Fannie Mae) MBS
These securities are issued by Fannie Mae and consist of mortgage loans that meet Fannie Mae's purchasing criteria. Though not directly backed by the U.S. government, they are widely regarded as low-risk investments due to the implicit government support Fannie Mae receives. Investment in these securities seeks to combine potential for yield with a level of safety.
- Federal Home Loan Mortgage Corporation (Freddie Mac) MBS
Similar to Fannie Mae, Freddie Mac MBS include a variety of mortgage loans that adhere to Freddie Mac's standards. While these securities are also not explicitly guaranteed by the U.S. government, they are considered low-risk investments due to Freddie Mac's government-sponsored status. The fund invests in these MBS to provide a balance of income and security.
- Derivative Instruments
Including futures contracts, forward agreements, swap contracts, and options related to the previously mentioned mortgage-backed securities. These financial instruments allow the fund to hedge its investments, manage risk more effectively, and potentially enhance returns on investments. Through the strategic use of derivatives, the fund aims to achieve greater diversification and risk management.
