For investors seeking momentum, the Vanguard Mortgage-Backed Securities ETF VMBS is probably on the radar now. The fund just hit a 52-week high and is up 6% from its 52-week low price of $44.85 per share.
But are there more gains in store for this ETF? Let’s take a quick look at the fund and its near-term outlook to get a better sense of where it might head.
VMBS in Focus
The fund provides exposure to U.S. large-cap equities while attempting to lower volatility by avoiding sectors that are currently in a down-trending cycle. The fund charges 64 basis points (bps) in annual fees (See: all Mortgage-Backed Securities ETFs here).
What Led to the Rise?
High AI sector volatility recently sparked a "flight to quality," driving investors toward liquid mortgage-backed assets for safety, which, in turn, must have led VMBS ETF to touch a new 52-week high. A combination of falling mortgage rates and expectations for further Federal Reserve policy easing is also likely to have favored this fund’s growth lately.
More Gains Ahead?
VMBS may continue its strong performance in the near term, with a positive weighted alpha of 4.24 (as per Barchart.com), which suggests a further rally.
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Vanguard Mortgage-Backed Securities ETF (VMBS): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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