The iShares Mortgage Real Estate ETF (REM) offers exposure to U.S. REITs holding residential and commercial mortgages, with an AUM of $0.55 billion. REM distinguishes itself with a focused strategy on mortgage REITs, providing a high dividend yield of 8.53%. The fund's expense ratio is 0.48%, and it holds 33 different REITs, making it a targeted option for investors interested in the real estate sector.
The iShares Mortgage Real Estate ETF (REM) offers exposure to U.S. REITs holding residential and commercial mortgages, with an AUM of $0.55 billion. REM distinguishes itself with a focused strategy on mortgage REITs, providing a high dividend yield of 8.53%. The fund's expense ratio is 0.48%, and it holds 33 different REITs, making it a targeted option for investors interested in the real estate sector.
ETF Overview
The iShares Mortgage Real Estate ETF seeks to track the investment results of an index composed of U.S. REITs that hold U.S. residential and commercial mortgages.
The iShares Mortgage Real Estate ETF (REM) aims to replicate the investment results of an index composed of U.S. REITs that primarily invest in U.S. residential and commercial mortgages. This ETF provides focused exposure to the mortgage REIT segment of the real estate market. REM's strategy centers on companies that finance real estate through mortgages rather than direct property ownership. The fund's top holdings reflect this focus, with significant allocations to Annaly Capital Management Inc (NLY) at 22.95% and AGNC Investment Corp (AGNC) at 15.33%. Other key holdings include Starwood Property Trust Inc (STWD) at 7.86%, Dynex Capital Inc (DX) at 4.37%, and Blackstone Mortgage Trust Inc A (BXMT) at 4.36%. With 100% of its sector allocation in real estate, REM offers a targeted approach for investors seeking to capitalize on the mortgage REIT market. The fund is primarily exposed to the United States, with 99.8% of its holdings in U.S. companies.
Risk Metrics
REM carries a concentration risk due to its top holdings constituting a significant portion of its portfolio. Annaly Capital Management Inc (NLY) and AGNC Investment Corp (AGNC) together account for over 38% of the fund's assets. The fund's exclusive focus on the real estate sector, specifically mortgage REITs, introduces sector-specific risk. A downturn in the real estate market or changes in interest rates could disproportionately impact REM's performance. With a beta of 1.24, REM exhibits higher volatility than the broader market. The expense ratio of 0.48% also creates a slight drag on performance compared to lower-cost alternatives. Past performance does not guarantee future results.
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Risk Metrics
Beta: 1.24
Questions & Answers
What is REM and what does it track?
The iShares Mortgage Real Estate ETF (REM) is an exchange-traded fund designed to track the investment results of an index composed of U.S. REITs that hold U.S. residential and commercial mortgages. In simpler terms, REM invests in companies that finance real estate through mortgages rather than directly owning properties. The fund's objective is to provide investors with exposure to the mortgage REIT segment of the real estate market. As of today, REM has an AUM of $0.55 billion and holds 33 different REITs.
What is the expense ratio for REM?
The expense ratio for the iShares Mortgage Real Estate ETF (REM) is 0.48%. This means that for every $10,000 invested in the fund, $48 is used to cover annual operating expenses. While this is a reasonable expense ratio, it's important to consider that other real estate ETFs may have lower expense ratios. Investors should weigh the cost against the fund's specific investment strategy and potential returns. It is slightly higher than the category average.
What are the top holdings in REM?
The iShares Mortgage Real Estate ETF (REM) has a concentrated portfolio with its top holdings representing a significant portion of its assets. As of today, the top three holdings are Annaly Capital Management Inc (NLY) at 22.95%, AGNC Investment Corp (AGNC) at 15.33%, and Starwood Property Trust Inc (STWD) at 7.86%. These three companies alone account for over 46% of the fund's total assets. Other notable holdings include Dynex Capital Inc (DX) at 4.37% and Blackstone Mortgage Trust Inc A (BXMT) at 4.36%.
Is REM a good long-term investment?
Evaluating REM as a long-term investment requires careful consideration of its specific focus on mortgage REITs. The fund's performance is closely tied to interest rate movements and the health of the housing market. Its high dividend yield of 8.53% may be attractive to income-seeking investors, but it's essential to remember that dividend payments are not guaranteed and can fluctuate. With a beta of 1.24, REM exhibits higher volatility than the broader market, which may not be suitable for all long-term investors. Past performance does not guarantee future results.
How does REM compare to similar ETFs?
REM distinguishes itself through its specific focus on mortgage REITs, setting it apart from broader real estate ETFs that include equity REITs and direct property investments. Its expense ratio of 0.48% is comparable to other specialized REIT ETFs. In terms of AUM, REM, with $0.55 billion, is a mid-sized fund in the mortgage REIT ETF category. Investors should compare REM's performance, dividend yield, and risk profile against other mortgage REIT ETFs to determine the best fit for their investment objectives.
Does REM pay dividends?
Yes, the iShares Mortgage Real Estate ETF (REM) is designed to provide investors with income through dividend payments. As of today, REM has a dividend yield of 8.53%. This yield reflects the annual dividend payments relative to the fund's current share price. It's important to note that dividend yields can vary over time and are not guaranteed. The fund distributes dividends monthly.