A Look At Market Vectors New Mortgage REIT ETF

Want some yield? These days, most investors answer a resounding “yes” to that question and for those willing to take on the risk of the fragile real estate market, mortgage REITs offer some huge dividend yields, many in the double digits. For those that can't make up their minds, Van Eck Global introduced the Market Vectors Mortgage REIT Income ETF MORT on Wednesday. If it's yield you're after, MORT has you covered with a dividend yield of 14.09%, according to the ETF's fact sheet. With an expense ratio of 0.4%, MORT tracks the Market Vectors Global Mortgage REITs Index, which is home to 25 stocks. Annaly Capital Management NLY, a stock that has almost become famous for its high yield, accounts for 19.7% of the index's weight. Rival American Capital Agency AGNC gets a weight of 11.5% while Chimera Investment CIM receives an allocation of 7.3%. Other familiar high-yielders in MORT's index include MFA Financial MFA, Hatteras Financial HTS and Starwood Property Trust STWD. MORT sets itself apart from other REIT ETFs in that the ETF does not provide exposure to finance companies or savings associations. The new ETF expects to make quarterly distributions to shareholders and as Van Eck acknowledges in its statement, MORT is not without its risks, which include credit, liquidity and pre-payment risks. Still, MORT could be an interesting play on ongoing mortgage reform. “If the U.S. government continues to wind down its role in the mortgage market, private financing sources, such as mortgage REITS may play a more pivotal role in the industry,” Van Eck said in its statement. MORT is the 36th Market Vectors ETF and the tenth to join the issuer's lineup of income-oriented funds.