What are mortgage REIT ETFs?
Mortgage REITs are real estate investment trusts that hold loans rather than buildings. They own home and commercial mortgages, or securities backed by them, and earn the gap between the interest they collect and what they pay to borrow. Like other REITs, they pay out most of their income as dividends. A handful of names recur: AGNC Investment appears in all three ETFs that report holdings, while Annaly Capital Management, Starwood Property Trust, Rithm Capital, Armour Residential REIT and Dynex Capital each appear in two of the three.
REM from iShares and MORT from VanEck, the two biggest, are index funds of mortgage REIT stocks. REM follows an index of US REITs that hold residential and commercial mortgages and owns 31 stocks; MORT tracks the MVIS US Mortgage REITs Index and owns 25. Both are concentrated: the top ten holdings make up about 72% of REM and 70% of MORT, and Annaly alone is 22.8% of REM.
PFFR, the InfraCap REIT Preferred ETF from Virtus Investment Partners, tracks the Indxx REIT Preferred Stock Index across 109 holdings, with the top ten at 23%. Preferred shares pay a set dividend and rank ahead of common stock. PFFR's largest positions, led by UMH Properties at 2.8%, include Digital Realty Trust and Vornado Realty Trust. MVRL, from UBS, is an exchange-traded note rather than a fund: a debt security whose return is linked to 1.5 times a mortgage REIT index. It owns no shares.
The median expense ratio, the yearly fee as a share of assets, is 0.45%, in a narrow range from 0.43% at MORT to 0.48% at REM. The money is concentrated, too: REM, at about $548 million, and MORT, at about $400 million, hold most of the roughly $1.07 billion in the three ETFs.
Mortgage REIT ETF holdings: the stocks most funds own
The stocks that show up most often among the largest positions of the 3 biggest mortgage REIT ETFs with holdings reports, from their latest N-PORT filings.
| Stock | Funds holding it | Typical weight |
|---|---|---|
| Agnc Investment Corp | 3 of 3 | 14.34% |
| Annaly Capital Management Inc | 2 of 3 | 17.47% |
| Starwood Property Trust Inc | 2 of 3 | 6.64% |
| Rithm Capital Corp | 2 of 3 | 4.44% |
| Armour Residential REIT Inc | 2 of 3 | 4.41% |
| Dynex Capital Inc (new) | 2 of 3 | 4.4% |
| Blackstone Mortgage Trust Inc | 2 of 3 | 3.99% |
| Ellington Financial Inc | 2 of 3 | 3.52% |
| Orchid Island Capital Inc | 2 of 3 | 2.98% |
| Apollo Commercial Real Estate Finance Inc | 2 of 3 | 2.94% |
| Two Harbors Investments Corp | 2 of 3 | 2.74% |
| Ladder Capital Corp | 2 of 3 | 2.37% |
Typical weight is the median share of each fund’s assets in the stock, among the funds that hold it in their 25 largest positions.
The largest mortgage REIT ETFs, side by side
Swipe the table to see all 3 funds.
| REM | MORT | PFFR | |
|---|---|---|---|
| Net assets | $547.9M | $399.8M | $120.6M |
| Expense ratio | 0.48% | 0.43% | 0.45% |
| Holdings | 31 | 25 | 109 |
| In the 10 largest | 71.85% | 69.82% | 23.07% |
| Biggest holding | Annaly Capital Management Inc (22.77%) | Annaly Capital Management Inc (17.47%) | Umh Properties Inc (2.79%) |
| Yield | 11.28% | 18.41% | 8.81% |
| 1-year return | -14.1% | -14.4% | -4.7% |
| 3 years, a year | +6.5% | +6.4% | +8.3% |
| 5 years, a year | -5.8% | -5.6% | +0.1% |
| Worst drop, past year | -26.3% | -26.8% | -6.7% |
| Launched | 2007 | 2011 | 2017 |
The largest ordinary funds by net assets (leveraged and inverse funds are listed further down). Holdings from each fund’s latest N-PORT report; returns include reinvested distributions, as of Oct 27, 2026.
Head to head
REM vs MORT
Their holdings overlap by 88.9%: all 25 of MORT's stocks also sit in REM's 31. Both are concentrated, with the top ten at 71.9% of REM and 69.8% of MORT, and Annaly the biggest holding in each (22.8% and 17.5%). MORT costs 0.43% a year against REM's 0.48%. As of October 27, 2026, MORT's yield was 18.4% to REM's 11.3%, and one-year returns were close: down 14.4% for MORT and 14.1% for REM, with deepest falls of 26.8% and 26.3%. REM may suit investors who value size and a longer record; MORT, those focused on cost and yield.
REM vs PFFR
These two have 0% overlap: REM owns 31 mortgage REIT stocks, while PFFR owns 109 REIT preferred shares. REM is concentrated, with its top ten at 71.9% and Annaly at 22.8%; PFFR's top ten are 23.1% and its biggest position, UMH Properties, is 2.8%. PFFR costs 0.45% a year against REM's 0.48%. As of October 27, 2026, PFFR yielded 8.8% to REM's 11.3% and lost 4.7% over one year against 14.1%, with a deepest fall of 6.7% versus 26.3%. PFFR may suit investors wanting steadier REIT income; REM, those wanting direct mortgage REIT exposure.
How much do the largest mortgage REIT ETFs overlap?
Owning two funds that hold the same stocks adds little diversification. Overlap here is the share of assets two funds have in common: for each stock both own, the smaller of its two weights, added up.
From each fund’s full holdings in its latest N-PORT report.
How have mortgage REIT ETFs performed?
The five largest ordinary funds: growth from the start of the range, distributions reinvested. The dashed gray line is the S&P 500 (SPY).
Best-performing mortgage REIT ETFs over the past year
| # | Fund | Net assets | Cost | 1 mo | YTD | 1 yr | 3 yr |
|---|---|---|---|---|---|---|---|
| 1 | PFFR InfraCap REIT Preferred ETF | $120.6M | 0.45% | -2.0% | -2.9% | -4.7% | +8.3% |
| 2 | REM iShares Mortgage Real Estate ETF | $547.9M | 0.48% | -7.1% | -16.3% | -14.1% | +6.5% |
| 3 | MORT VanEck Mortgage REIT Income ETF | $399.8M | 0.43% | -6.9% | -16.4% | -14.4% | +6.4% |
Funds with at least $25 million in net assets; leveraged and inverse funds left out. Past returns don’t predict future returns.
How mortgage REIT ETFs did in past market crashes
| Fund | 2008 crash | 2020 crash | 2022 drop |
|---|---|---|---|
| REM | -59.5% | -62.8% | -36.6% |
| MORT | not yet launched | -64.8% | -36.1% |
| PFFR | not yet launched | not yet launched | -24.9% |
| S&P 500 (SPY) | -55.2% | -33.7% | -24.5% |
Total return from the stock market’s peak to its low in each fall, distributions reinvested.
What drives mortgage REIT ETFs?
Mortgage REITs earn the gap between the interest on their loans and mortgage securities and the cost of the short-term money they borrow to fund them, and most borrow heavily to magnify it. That makes interest rates the main driver. When short-term rates rise faster than mortgage rates, the gap narrows; when rates jump, the securities they hold lose value, shrinking book value (assets minus debts). Those lending on commercial property also risk borrowers defaulting. Dividends follow these profits. REIT preferred shares, which PFFR holds, pay a set dividend, so their prices move more like bonds.
Partly because of that borrowing, these funds have fallen hard in downturns. In the 2008 financial crisis REM fell 59.5%, against 55.2% for the S&P 500. In the 2020 COVID crash REM dropped 62.8% and MORT 64.8%, nearly twice the S&P 500's 33.7% decline. In the 2022 bear market REM lost 36.6% and MORT 36.1%, versus 24.5% for the S&P 500. PFFR, whose preferred shares rank ahead of common stock, fell 24.9%, close to the index.
Mortgage REIT ETFs with the lowest expense ratios
| # | Fund | Expense ratio | On $10,000 | Net assets |
|---|---|---|---|---|
| 1 | MORT VanEck Mortgage REIT Income ETF | 0.43% | $43 a year | $399.8M |
| 2 | PFFR InfraCap REIT Preferred ETF | 0.45% | $45 a year | $120.6M |
| 3 | REM iShares Mortgage Real Estate ETF | 0.48% | $48 a year | $547.9M |
Ordinary funds with at least $10 million in net assets. The median ordinary mortgage REIT ETF charges 0.45% a year; leveraged and inverse funds usually charge more.
Do mortgage REIT ETFs pay dividends?
3 of the 3 ordinary mortgage REIT ETFs with a page here paid distributions over the last 12 months, with a median yield of 11.28%.
| Highest yields | Yield | Net assets |
|---|---|---|
| MORT VanEck Mortgage REIT Income ETF | 18.41% | $399.8M |
| REM iShares Mortgage Real Estate ETF | 11.28% | $547.9M |
| PFFR InfraCap REIT Preferred ETF | 8.81% | $120.6M |
Distributions over the last 12 months divided by the price; funds with at least $25 million in net assets.
How to choose a mortgage REIT ETF
- Fees fall in a narrow range. MORT charges 0.43% a year, PFFR 0.45% and REM 0.48%. The gap is small next to the differences in what the funds own and how much they have swung, though fees do reduce returns every year.
- Mortgage REIT stocks or REIT preferreds. REM and MORT own mortgage REIT stocks. PFFR owns REIT preferred shares, which pay set dividends and rank ahead of common stock. In the year to October 27, 2026, PFFR's deepest fall was 6.7%, versus 26.3% for REM.
- How much rides on a few stocks. The top ten holdings make up 71.9% of REM and 69.8% of MORT, with Annaly alone at 22.8% and 17.5%. PFFR spreads its money across 109 holdings, with the top ten at 23.1%.
- Index rules and US focus. All three ETFs track indexes. REM's covers US REITs holding US home and commercial mortgages, and MORT's is the MVIS US Mortgage REITs Index. PFFR follows the Indxx REIT Preferred Stock Index instead.
- Yield, size and track record. As of October 27, 2026, MORT yielded 18.4%, REM 11.3% and PFFR 8.8%; those payouts can shrink if REITs cut dividends. REM is the largest, at about $548 million, and the oldest, launched in 2007.
- A leveraged note, not a fund. MVRL is a UBS exchange-traded note linked to 1.5 times a mortgage REIT index. It owns no shares, depends on UBS's ability to pay, and lost 24.2% over the year to October 27, 2026, versus 14.1% for REM.
What are the risks of mortgage REIT ETFs?
- Heavy reliance on Annaly and AGNC. Annaly is 22.8% of REM and 17.5% of MORT, and AGNC is another 15.3% and 14.3%. With the top ten at about 70% of each fund, trouble at a few companies would hit hard.
- Interest rates and borrowed money. Mortgage REITs borrow heavily to fund loans and mortgage securities. When rates rise fast, those holdings lose value just as borrowing costs climb. In the 2022 bear market REM fell 36.6% and MORT 36.1%, against 24.5% for the S&P 500.
- Deep drops in market downturns. In the 2020 COVID crash REM fell 62.8% and MORT 64.8%, versus 33.7% for the S&P 500. In the year to October 27, 2026, both had volatility (how widely prices swing) near 18% and worst drops above 26%.
- High yields can shrink. MORT's 18.4% and REM's 11.3% yields, as of October 27, 2026, depend on what the underlying REITs earn. When the gap between lending and borrowing rates narrows, mortgage REITs can cut dividends, and fund payouts fall with them.
- MVRL adds leverage and UBS credit risk. MVRL's 1.5x leverage magnified losses: in the year to October 27, 2026, its volatility was 29% and its deepest fall 39%. As a note, it holds no shares and depends on UBS paying what it owes.
Leveraged and inverse mortgage REIT ETFs (1.5x)
These funds aim for a multiple, or the opposite, of one day’s return, and reset every day. Held for longer than a day, their results can drift far from that multiple, especially when prices swing. They are trading tools, not long-term holdings. Why leveraged ETFs decay →
| Fund | Daily aim | Net assets | 1-year return |
|---|---|---|---|
| MVRL ETRACS Monthly Pay 1.5x Leveraged Mortgage REIT E… | 1.5× | — | -24.2% |
List of all mortgage REIT ETFs, by size
Questions investors ask about mortgage REIT ETFs
What is the largest mortgage REIT ETF?
REM, the iShares Mortgage Real Estate ETF, is the largest, with about $548 million in net assets. It launched in 2007 and holds 31 positions in US mortgage REITs, led by Annaly Capital Management at 22.8% and AGNC Investment at 15.3%. VanEck's MORT is next at about $400 million, followed by the InfraCap REIT Preferred ETF (PFFR) at about $121 million.
What is the cheapest mortgage REIT ETF?
MORT, the VanEck Mortgage REIT Income ETF, costs the least, with an expense ratio (yearly fee) of 0.43%. PFFR charges 0.45% and REM 0.48%, so the range is narrow. Because MORT and REM overlap by 88.9%, cost is one of the few real differences between them. PFFR is close in price but owns something else: preferred shares issued by REITs rather than mortgage REIT stocks.
REM vs MORT: what's the difference?
Very little in what they own. MORT's 25 stocks all appear in REM, which holds 31, and the two overlap by 88.9%. MORT is cheaper, at 0.43% a year against 0.48%, while REM is larger and has run since 2007. As of October 27, 2026, MORT yielded 18.4% and REM 11.3%, and one-year returns were close: down 14.4% for MORT and 14.1% for REM. REM puts more in Annaly, 22.8% versus 17.5%.
Do mortgage REIT ETFs pay dividends?
Yes. All three ETFs pay dividends, and the yields are high: as of October 27, 2026, MORT yielded 18.4%, REM 11.3% and PFFR 8.8%. MVRL, a note rather than a fund, is designed to pay monthly, as its name says. These payouts are not fixed. Mortgage REITs can cut dividends when profits shrink, and REIT dividends usually don't qualify for the lower tax rate that applies to many other stock dividends.
Which ETFs hold Annaly and AGNC?
REM and MORT both hold large stakes in each. Annaly Capital Management is the biggest holding in both, at 22.8% of REM and 17.5% of MORT. AGNC Investment is second, at 15.3% and 14.3%. AGNC is also the only company that appears in all three ETFs with holdings, including PFFR. Because the two are so large, these funds' results lean heavily on how Annaly and AGNC do.
How many mortgage REIT ETFs are there?
There are four US-listed products: REM from iShares, MORT from VanEck, PFFR from Virtus Investment Partners and MVRL from UBS. Only REM and MORT are built around mortgage REIT stocks. PFFR spreads its money across 109 REIT preferred shares, and MVRL is an exchange-traded note with 1.5x leverage, not a fund that owns shares. REM and MORT hold most of the roughly $1.07 billion in the three ETFs.
Is there a leveraged mortgage REIT ETF?
Yes, in note form. MVRL, the ETRACS Monthly Pay 1.5x Leveraged Mortgage REIT ETN from UBS, is linked to 1.5 times the return of a mortgage REIT index. It is a debt security, so it owns no shares and depends on UBS's ability to pay. Leverage resets periodically, so long-run results can drift far from 1.5 times the index, which makes such products mainly short-term trading tools. As of October 27, 2026, MVRL lost 24.2% over one year, versus 14.1% for REM, and its deepest fall was 39%.
How do mortgage REITs make money?
They earn the difference between the interest on the mortgages and mortgage securities they own and the cost of the money they borrow to fund them. Most borrow heavily to magnify that gap, and as REITs they must pay out most of their taxable income as dividends, which is why yields run high. The same borrowing makes them sensitive to interest rates: in the 2022 bear market REM fell 36.6% and MORT 36.1%, against 24.5% for the S&P 500.
Is there a Vanguard, Fidelity or Schwab mortgage REIT ETF?
No. None of the three offers a mortgage REIT ETF. The largest mortgage REIT ETFs come from iShares (REM), VanEck (MORT) and Virtus Investment Partners (PFFR), and customers of all three firms can buy other companies’ ETFs in their brokerage accounts.
