"REM owns the mortgage REITs that originate and hold the loans. The fund's distributions are pass-throughs of dividends from underlying mortgage REITs that fund agency mortgage-backed securities, commercial real estate loans, and mortgage servicing rights."
"Annaly Capital Management is the anchor. Q1 earnings available for distribution came in at $0.76 per share against the $0.70 dividend, the tenth consecutive quarter of positive economic returns."
"AGNC Investment has held its $0.12 monthly dividend since January 2020. Q1 net spread and dollar roll income of $0.42 per share covers the $0.36 quarterly payout."
"Arbor Realty Trust is the obvious weak link. Management cut the dividend, highlighting the risks associated with certain mREITs."
The iShares Mortgage Real Estate ETF (REM) offers exposure to approximately two dozen mortgage REITs, helping to mitigate risks associated with individual mREITs. With net assets of $594 million and a low expense ratio, REM has seen significant gains recently. The fund's income is derived from dividends of its underlying mortgage REITs, which are influenced by macroeconomic factors. Key holdings like Annaly Capital Management show strong earnings, while Arbor Realty Trust presents risks due to dividend cuts.
Read at 24/7 Wall St.
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