MBSD Profile
The FlexShares Disciplined Duration MBS Index Fund is designed to provide investors with exposure to a diversified portfolio of investment-grade U.S. agency residential mortgage-backed securities (MBS). The underlying index tracks the performance of a carefully selected array of these MBS, reflecting the market value and yield of securities issued by U.S. government agencies. These securities are backed by residential mortgages, offering investors a way to gain exposure to the housing market and benefit from the stable income streams typically associated with MBS.
Under normal market conditions, the fund invests at least 80% of its total assets, excluding collateral held from securities lending, in securities that comprise the underlying index. This approach ensures that the fund maintains a high degree of alignment with the index's performance. By focusing on investment-grade securities, the fund aims to provide a stable and relatively lower-risk investment compared to lower-rated mortgage-backed securities.
FlexShares, the fund’s advisor, employs a disciplined strategy to select and manage the mortgage-backed securities included in the portfolio. The goal is to match the duration of the fund’s holdings with that of the index, thereby managing interest rate risk while seeking to provide competitive returns. The fund’s approach is tailored to investors seeking consistent income and stability, particularly those concerned with interest rate fluctuations and market volatility.
The ETF is particularly suited for income-focused investors who are looking for exposure to the U.S. housing market through a vehicle that emphasizes high-quality, government-backed securities. Its disciplined duration management strategy aims to mitigate the impact of interest rate changes, providing a balance between yield and risk. By investing in this fund, investors can potentially benefit from the steady cash flows associated with mortgage-backed securities while maintaining a relatively conservative risk profile.
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