iShares Mortgage Real Estate ETF

The iShares Mortgage Real Estate ETF (REM), from BlackRock's iShares, tracks the FTSE Nareit All Mortgage Capped Index. The index holds about 32 U.S. real estate investment trusts (REITs) that hold home and commercial mortgages instead of owning buildings. Its main draw is income: a trailing yield of 11.28% as of October 27, 2026. At 0.48% a year, it costs less than four similar funds, but it has suffered deep, lasting losses.

• Over the year to Oct 27, 2026, REM returned -14.1%, 4th of 5 among similar funds.
• Its 5-year annualized return was -5.8% and its 10-year +0.3%.
• In the 2020 COVID crash it fell 63.1%, and had not regained its old high by the end of the data.
• Its worst full calendar year was 2008 (-42.9%); its best was 2016 (+21.8%).
• The deepest fall in its price history was 74.8% (Jun 4, 2007 to Nov 20, 2008), not yet recovered.

As of Jun 30, 2026, the fund held 31 securities; the ten largest made up 71.85% of assets.

• Over the three months to Jun 30, 2026, investors withdrew a net $12.6M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +7.18%, -4.04%, +2.17%.

REM follows the FTSE Nareit All Mortgage Capped Index, run by FTSE International. The index covers U.S. REITs that hold residential and commercial mortgages, and FTSE decides which companies are in it and how much each one weighs. As of March 31, 2026, the index had 32 members, and REITs made up about 100% of its value. If membership ever drops below 20, FTSE may add mortgage finance companies and savings associations (savings and loan banks). Each would be capped at 3% of the index, and together they could not exceed 30%.

BlackRock Fund Advisors uses representative sampling. It buys a selection of index stocks picked to match the index's overall size, industry mix, yield and swings, so the fund may not own every member. At least 80% of net assets must be in index components. As of June 30, 2026, the fund held 31 companies, and the top 10 made up 71.85% of assets. Annaly Capital Management (22.8%) and AGNC Investment (15.3%) together were nearly two-fifths, followed by Starwood Property Trust (7.0%). Yearly portfolio turnover was 21%.

The fund itself does not use leverage. But the companies it owns typically borrow money to buy more mortgages, and the prospectus lists leverage, interest rate and credit risk. The fund may use derivatives. As of June 30, 2026, it held only tiny positions in real estate index futures and a contract tied to Arbor Realty Trust. It may also lend out securities worth up to one-third of its assets.

• REM charges 0.48% a year, versus an average of 1% for the similar funds below (1st of 5, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $49 in the first year and $604 over 10 years (assuming a 5% annual return).

REM pays high income from a narrow, borrowing-heavy group of mortgage lenders, and its history of losses of 60% or more makes it a poor fit as a core holding.

REM could add a large stream of income. It had a trailing 12-month yield of 11.28% as of October 27, 2026, paid quarterly, and it costs 0.48% a year. Under the SEC's standard example, that is $49 in the first year on $10,000. The trade-off is severe drops. The fund fell 64% in the 2008 crisis and took about 99 months to climb back. Measured from its June 2007 high, it fell 74.8% and had not recovered as of October 27, 2026. It lost 63.1% in about a month in 2020 and 40.2% in 2022, and it had not recovered from either drop. Its worst calendar year was 2008, at -42.9%. Anyone forced to sell in a year like that would lock in large losses, and mortgage REITs can cut their dividends. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.