Let’s take a closer look at these Vanguard ETFs.
Vanguard Mortgage-Backed Securities ETF (VMBS)
The Vanguard Mortgage-Backed Securities ETF invests in U.S. government-backed mortgage bonds, primarily those issued or guaranteed by government-sponsored agencies. VMBS invests in a diversified pool of mortgage-backed securities and aims to track the performance of the Bloomberg U.S. MBS Float Adjusted Index.
VMBS has an extremely low beta of around 0.02, meaning the ETF shows almost no correlation with movements in the broader stock market. In practical terms, VMBS tends to move very little compared with equities, which makes it a useful tool for investors looking to reduce overall portfolio volatility.
VMBS also has a low expense ratio of about 0.03%. Meanwhile, it has a dividend yield of 4.17%.
