The iShares Mortgage Real Estate ETF's distribution appears safer after three Federal Reserve rate cuts late last year, as its two largest holdings—Annaly Capital and AGNC Investment—have maintained or raised payouts through a difficult rate cycle. Annaly, which accounts for 23% of REM's net assets, raised its quarterly dividend to $0.70 in early 2025 and has held it there for five consecutive quarters, while AGNC, at 14.79% of net assets, has kept its $0.12 monthly distribution steady for 24 consecutive months. Together, these two names control 36% of the fund's $531.5 million in net assets, making REM's pass-through payout highly dependent on their dividend decisions. The yield curve remains a risk, with the 10-year Treasury at 4.5% and the Fed Funds rate at 3.8% after the cuts, but the Fed's pause since December 2025 removes near-term funding cost surprises. REM is up 14% over the past year but down 8% over five years, penalizing investors who spent distributions rather than reinvesting them.
AGNC Investment Corp.Three Fed rate cuts and a pause reduce funding cost uncertainty, supporting AGNC's ability to maintain its $0.12 monthly dividend.
Annaly Capital Management, Inc.Three Fed rate cuts and a pause reduce funding cost uncertainty, supporting Annaly's ability to maintain its $0.70 quarterly dividend.
Starwood Property Trust Inc