What Are the Advantages of Investing in MBS?
By investing in MBS, investors are able to gain investment products with a high credit quality, because MBS issued by selected government-sponsored entities have direct obligations to investors to guarantee timely repayment of principal and interest.
MBS have an attractive current yield that is typically higher than other comparable fixed-income securities with credit risks.
MBS make monthly income payments rather than semi-annual payments, which in turn allows investors to have a higher frequency for reinvestment opportunities and personal expenditures, increasing flexibility for MBS investors.
- What Is a Mortgage-Backed Security (MBS)?
- Should I Invest in an MBS Fund Instead of Individual Mortgage-Backed Securities?
- How Are Mortgage-Backed Securities Different from Other Fixed Income Securities?
- What Are Residential Mortgage-Backed Securities (RMBS)?
- What Are Some Examples of Mortgage-Backed Securities?
- How Are Mortgage-Backed Securities Hedged?
- What Are Collateralized Debt Obligations (CDOs)?
- What Is the Difference between Collateralized Debt Obligations (CDOs) and Mortgage-Backed Securities (MBS)?