CCM Affordable Housing MBS ETF (OWNS) seeks to provide income and capital appreciation through investments in mortgage-backed securities (MBS) specifically tied to affordable housing projects. This specialized fixed-income ETF focuses on government-sponsored enterprise securities and agency MBS that finance low-to-moderate income housing developments.
How It Works
OWNS employs an actively managed approach to select mortgage-backed securities from government agencies like Fannie Mae, Freddie Mac, and Ginnie Mae that specifically support affordable housing initiatives. The fund's portfolio managers evaluate credit quality, duration risk, and prepayment characteristics while maintaining focus on housing finance securities. Holdings are rebalanced monthly based on market conditions and credit analysis. The concentrated portfolio typically holds 50-100 MBS positions with emphasis on government-backed securities.
Key Features
- Unique focus on affordable housing MBS provides targeted exposure to socially responsible mortgage investments with government backing
- Active management allows tactical positioning across different MBS sectors and duration profiles based on interest rate environment
- Recently launched in March 2024, offering 3.87% dividend yield from mortgage payment pass-throughs and principal collections
Risks
- This ETF can lose value when interest rates rise, as mortgage-backed securities are highly sensitive to rate changes and could decline 10-20% in rising rate environments
- Prepayment risk occurs when homeowners refinance mortgages early during falling rates, forcing reinvestment at lower yields and reducing total returns
- Credit risk exists if underlying mortgage borrowers default, though government backing on most holdings limits but doesn't eliminate potential losses
Who Should Own This
Best suited for income-focused investors with 3-5 year time horizons seeking socially responsible fixed-income exposure as a satellite holding (5-15% of bond allocation). Medium risk tolerance required due to interest rate sensitivity. Appropriate for investors wanting mortgage market exposure while supporting affordable housing initiatives through their investment choices.