Vanguard Mortgage-Backed Securities Index Fund (VMBS)

Bank of America Corp DE boosted its position in Vanguard Mortgage-Backed Securities ETF (NASDAQ: VMBS) by 1.2% during the second quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The fund owned 53,150,304 shares of the exchange traded fund's stock after buying an additional 643,509 shares during the

Fisher Asset Management LLC decreased its position in Vanguard Mortgage-Backed Securities ETF (NASDAQ: VMBS) by 10.5% during the second quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 92,482 shares of the exchange traded fund's stock after selling 10,809 shares during the

Vanguard Mortgage-Backed Securities ETF offers liquid, high-quality exposure to US agency MBS with minimal credit risk. I recommend a qualified Buy, anticipating NAV appreciation if the Fed pursues a gradual rate-cut cycle into 2026. VMBS's intermediate duration, 3.87% yield, and ultra-low 0.03% expense ratio make it a compelling, cost-efficient choice versus peers.

For investors looking for fixed income diversification, mortgage-backed securities (MBS) could offer a happy home. Specifically, they should look into broad-based exposure via the Vanguard Mortgage-Backed Securities Index Fund ETF Shares (VMBS).

As noted in USA Today, dipping mortgage rates could be attributed to the improving sentiment of bond investors. That's especially the case for those investing in mortgage bonds.

The prospect of lower rates could translate to falling yields, forcing investors to diversify their fixed income portfolios. One area that's been seeing renewed interest is mortgage-backed securities (MBS).

Mortgage-backed securities (MBSs) ETFs have, somewhat quietly, welcomed some big new players in the past year.  Just this week, Eaton Vance debuted the Eaton Vance Mortgage Opportunities ETF (EVMO).

Vanguard Mortgage-Backed Securities Index Fund ETF Shares offers exposure to agency MBS with no credit risk, benefiting from elevated spreads and attractive yields versus Treasuries. The fund's convexity and intermediate duration position it to outperform as rates decline, especially during aggressive Fed rate cuts. Political and macro factors suggest lower rates by mid-2026, with a likely new Fed chair supporting further easing.

Treasuries have been the default go-to safe haven bonds during times of heavy market volatility. But with Moody's recent downgrade, an opportunity for mortgage-backed securities (MBS) exists.

Investors were eager to close the books on April's tariff-fueled market tantrum, which left both the Dow and S&P 500 riding three-month losing streaks despite a recent rebound. Equity ETF flows cooled, while fixed income ETFs put on a decisively skittish performance.

Rising tariff turmoil has sparked a run from credit-sensitive instruments, with escalating trade tensions threatening economic stability. Wednesday's GDP print stoked recessionary fears when it showed the U.S. economy contracted for the first time since early 2022.

Given the enormity of its market size, it would serve a fixed income investor well to explore opportunities in mortgage-backed securities (MBS) if they haven't already. The space is expanding and undergoing electronification, making it larger as well as more efficient.

Consider shifting to areas of the market that are less sensitive to inflation expectations.