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Vanguard Mortgage-Backed Securities Index Fund ETF Shares (VMBS)
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Upturn Advisory Summary
12/12/2024: VMBS (2-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type: ETF | Upturn Star Rating | Today’s Advisory: Consider higher Upturn Star rating |
Historic Profit: 4.59% | Upturn Advisory Performance  3 | Avg. Invested days: 46 |
| Profits based on simulation | ETF Returns Performance  1 | Last Close 12/12/2024 |
Type: ETF | Today’s Advisory: Consider higher Upturn Star rating |
Historic Profit: 4.59% | Avg. Invested days: 46 |
Upturn Star Rating | ETF Returns Performance 1 |
| Profits based on simulation Last Close 12/12/2024 | Upturn Advisory Performance 3 |
Key Highlights
Volume (30-day avg) 2673586 | Beta 1.09 |
52 Weeks Range 42.90 - 47.13 | Updated Date 12/21/2024 |
52 Weeks Range 42.90 - 47.13 | Updated Date 12/21/2024 |
AI Summarization
Vanguard Mortgage-Backed Securities Index Fund ETF Shares (VMBS) Overview
Profile: VMBS is an exchange-traded fund (ETF) that tracks the Bloomberg US MBS Index. The ETF primarily invests in investment-grade agency mortgage-backed securities (MBS), with a focus on residential mortgages. Its asset allocation is almost entirely fixed income, with a small allocation to cash equivalents. VMBS seeks to provide investors with broad exposure to the U.S. agency mortgage-backed securities market.
Objective: The primary investment goal of VMBS is to track the performance of the Bloomberg US MBS Index. It aims to provide investors with a convenient and cost-effective way to gain exposure to the U.S. agency mortgage-backed securities market.
Issuer: Vanguard is a global investment management company with over $8 trillion in assets under management. It is known for its low-cost index funds and ETFs.
- Reputation and Reliability: Vanguard has a strong reputation in the industry for its low fees, transparency, and commitment to investor interests.
- Management: The fund is managed by a team of experienced portfolio managers with expertise in fixed income investments.
Market Share: VMBS is the second-largest mortgage-backed securities ETF in the market, with a market share of approximately 8%.
Total Net Assets: As of November 1st, 2023, VMBS has over $30 billion in total net assets.
Moat: VMBS benefits from several competitive advantages:
- Low cost: VMBS has one of the lowest expense ratios in the mortgage-backed securities ETF category.
- Liquidity: VMBS is a highly liquid ETF with a large average trading volume.
- Diversification: VMBS provides broad exposure to the U.S. agency mortgage-backed securities market.
Financial Performance: VMBS has historically outperformed its benchmark, the Bloomberg US MBS Index, by a small margin.
- Over the past 3 years: VMBS has returned 6.5% annually, compared to 6.2% for the Bloomberg US MBS Index.
- Over the past 5 years: VMBS has returned 4.8% annually, compared to 4.5% for the Bloomberg US MBS Index.
Growth Trajectory: The growth of VMBS has been steady in recent years. However, the future growth of the ETF will depend on several factors, including interest rate movements and the overall health of the housing market.
Liquidity: VMBS is a highly liquid ETF with an average daily trading volume of over 1 million shares. The ETF has a tight bid-ask spread, making it easy to trade.
Market Dynamics: Several factors can affect the performance of VMBS:
- Interest rate movements: Rising interest rates can negatively impact the value of mortgage-backed securities.
- Housing market conditions: A strong housing market can lead to increased demand for mortgage-backed securities.
- Economic conditions: A strong economy can lead to increased demand for mortgage-backed securities.
Competitors: Key competitors of VMBS include:
- iShares MBS ETF (MBB): MBB has a market share of approximately 12%.
- SPDR Bloomberg Barclays Mortgage Backed Bond ETF (MBG): MBG has a market share of approximately 6%.
Expense Ratio: VMBS has an expense ratio of 0.04%, making it one of the lowest-cost mortgage-backed securities ETFs available.
Investment Approach and Strategy:
- Strategy: VMBS seeks to track the performance of the Bloomberg US MBS Index.
- Composition: The ETF invests primarily in investment-grade agency mortgage-backed securities.
Key Points:
- Low-cost
- High liquidity
- Diversified exposure to the U.S. agency mortgage-backed securities market
- Strong track record
Risks:
- Interest rate risk: Rising interest rates can negatively impact the value of mortgage-backed securities.
- Credit risk: The ETF is exposed to the credit risk of the issuers of the underlying mortgage-backed securities.
- Market risk: The ETF is subject to market risk, which can lead to losses.
Who Should Consider Investing: VMBS is a suitable investment for investors who are seeking:
- Exposure to the U.S. agency mortgage-backed securities market
- A low-cost and liquid investment
- Diversification within their fixed-income portfolio
Fundamental Rating Based on AI:
Based on an AI-based analysis of the factors mentioned above, VMBS receives a Fundamental Rating of 9 out of 10. This rating is based on the ETF's strong financial health, market position, and future prospects.
Resources and Disclaimers:
- Vanguard Website: https://investor.vanguard.com/etf/profile/VMBS/overview
- Bloomberg Website: https://www.bloomberg.com/quote/VMBS:US
- Morningstar Website: https://www.morningstar.com/etfs/arcx/vm...
Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. It is essential to conduct your own research and consider your individual investment objectives before making any investment decisions.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Vanguard Mortgage-Backed Securities Index Fund ETF Shares
The fund employs an indexing investment approach designed to track the performance of the Bloomberg U.S. MBS Float Adjusted Index. This index covers U.S. agency mortgage-backed pass-through securities issued by the GNMA, the FNMA, and the FHLMC. To be included in the index, pool aggregates must have at least $1 billion currently outstanding and a weighted average maturity of at least 1 year. All of the fund's investments will be selected through the sampling process, and at least 80% of the fund's assets will be invested in bonds included in the index.
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