Mortgage Backed Securities ETFs and funds invest in bonds backed by pools of residential or commercial mortgages, including agency and non-agency securities. Returns depend on interest rates, borrower credit, prepayments, refinancing activity, housing conditions, and the structure of the underlying securities.

Mortgage Backed Securities

An actively managed ETF that invests primarily in short-duration U.S. government securities, with approximately two-thirds of the portfolio in agency mortgage-backed securities (Fannie Mae, Freddie Mac) and the remainder in direct government securities such as T-bills, notes, and TIPS, targeting an average duration of three years or less.

NYSEArca

FTSD

NasdaqGM

LMBS

VABS is an actively managed ETF that seeks to generate income by investing primarily in short-duration, investment-grade securitized debt including asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities (RMBS).

VABS

The Eaton Vance Mortgage Opportunities ETF (EVMO) is an actively managed fund that invests in a diversified portfolio of U.S. mortgage-related securities, including agency and non-agency mortgage-backed securities, commercial mortgage-backed securities, and asset-backed securities, aiming to provide diversified exposure to the global securitized markets.

Symbol	Name	Sharpe Ratio (1Y)	Sharpe Ratio (5Y)	Sharpe Ratio (10Y)	Risk / Return Rank
FTSD	Franklin Short Duration U.S. Government ETF	2.73	1.40	1.20	95
LMBS	First Trust Low Duration Mortgage Opportunities ET...	2.34	1.22	1.11	86
VABS	Virtus Newfleet ABS/MBS ETF	1.90	1.45	—	77
EVMO	Eaton Vance Mortgage Opportunities ETF	1.59	—	—	59
DEED	First Trust TCW Securitized Plus ETF	1.13	0.02	—	37

Top Mortgage Backed Securities ETFs by Sharpe Ratio

Top Mortgage Backed Securities ETFs by Sharpe Ratio