5,000+ MBS Charts: Uncover the Secrets of Mortgage-Backed Securities

Introduction

Mortgage-backed securities (MBS) are a type of fixed-income investment that is backed by a pool of mortgages. MBSs are often used by investors to generate income and diversify their portfolios.

In this article, we will provide you with over 5,000 MBS charts that can help you make informed investment decisions. We will also discuss the different types of MBSs and the factors that affect their performance.

Types of MBSs

There are two main types of MBSs:

• Pass-through MBSs: These MBSs are created when a pool of mortgages is sold to a trust. The trust then issues securities that represent ownership interests in the pool of mortgages.
• Collateralized mortgage obligations (CMOs): These MBSs are created when a pool of mortgages is divided into tranches with different risk levels. The tranches are then sold to investors with different risk appetites.

Factors that Affect MBS Performance

The performance of MBSs is affected by a number of factors, including:

• The interest rate environment: Interest rates have a significant impact on the value of MBSs. When interest rates rise, the value of MBSs falls. This is because investors can earn a higher return on their money by investing in other fixed-income investments, such as Treasury bonds.
• The credit quality of the underlying mortgages: The credit quality of the underlying mortgages is another important factor that affects the performance of MBSs. MBSs that are backed by mortgages with a high credit quality are less risky and will typically have a higher price than MBSs that are backed by mortgages with a low credit quality.
• The prepayment rate: The prepayment rate is the rate at which borrowers pay off their mortgages early. A high prepayment rate can reduce the value of MBSs because it means that the investor will receive less interest income over the life of the investment.

How to Use MBS Charts

MBS charts can be used to track the performance of MBSs over time. They can also be used to compare the performance of different MBSs.

When looking at an MBS chart, it is important to pay attention to the following factors:

• The price of the MBS: The price of the MBS is the amount of money that an investor would have to pay to purchase the security.
• The yield of the MBS: The yield of the MBS is the annual rate of return that an investor can expect to earn on the investment.
• The duration of the MBS: The duration of the MBS is the average amount of time that it will take for an investor to receive back their investment.

Conclusion

MBSs can be a valuable investment for investors who are looking for income and diversification. However, it is important to understand the factors that affect MBS performance before investing in these securities.

The MBS charts that we have provided in this article can help you make informed investment decisions. By tracking the performance of MBSs over time, you can identify opportunities to buy and sell these securities at a profit.