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The 4% yield was secondary to capital gains.MBB manages $39B with a 0.04% expense ratio but can swing 2-3% monthly during rate volatility.Vanguard Mortgage-Backed Securities ETF (VMBS) charges 0.03% versus MBB’s 0.04%. A $100K allocation saves approximately $3K in fees over 30 years.A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more here.When bond investors chase yield, they often overlook the engine that drives total returns: price appreciation from interest rate movements. The iShares MBS ETF (NYSEARCA:MBB) demonstrates this dynamic perfectly. While its 4% yield attracts income seekers, the fund has benefited from mortgage-backed securities price movements in recent periods.MBB provides exposure to agency mortgage-backed securities, the bonds backed by Fannie Mae, Freddie Mac, and Ginnie Mae. These aren't the risky subprime mortgages from 2008. They carry implicit or explicit government guarantees, eliminating credit risk. What remains is interest rate sensitivity and prepayment risk.MBB's scale creates meaningful advantages for investors. The fund manages $39 billion in assets, allowing institutional-level efficiency that translates to a 0.04% expense ratio among the lowest in fixed income. This cost structure compounds over time, ensuring more mortgage interest flows through as monthly dividends rather than being consumed by fees.The past year illustrates how MBB generates returns beyond its yield. The fund delivered strong total returns, with the majority coming from price appreciation as mortgage spreads compressed. This demonstrates the dual benefit: steady monthly income from the 4% yield combined with capital gains when rate environments cooperate.24/7 Wall St. · 24/7 Wall St.This infographic illustrates the MBB ETF's mechanics, from government-backed mortgages to monthly income and price appreciation, alongside its best use case and a breakdown of its pros and cons.Duration cuts both ways, and MBB's track record shows this clearly. The fund has delivered strong performance in recent periods and over the long term, but experienced challenges during the 2022 rate spike. When the Federal Reserve aggressively tightened policy, bond values compressed across the market, illustrating how duration risk materializes during hiking cycles.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,940.01 -4.46 (-0.06%)Dow 3049,359.33 -83.07 (-0.17%)Nasdaq23,515.39 -14.61 (-0.06%)Russell 20002,677.74 +3.18 (+0.12%)VIX15.86 +0.02 (+0.13%)Gold4,595.40 -28.30 (-0.61%)Trending tickersBTC-USD Bitcoin USD 92,572.46 -2,598.23 (-2.73%)ETH-USD Ethereum USD 3,235.54 -75.50 (-2.28%)XRP-USD XRP USD 1.94 -0.12 (-5.96%)BTC-CAD Bitcoin CAD 128,734.04 -3,613.18 (-2.73%)SOL-USD Solana USD 134.47 -9.29 (-6.47%)PortfolioSign in to access your portfolioSign inTop gainersIBRX ImmunityBio, Inc. 5.52 +1.57 (+39.75%)AGX Argan, Inc. 383.66 +54.00 (+16.38%)RIOT Riot Platforms, Inc. 19.23 +2.64 (+15.92%)ASTS AST SpaceMobile, Inc. 115.77 +14.52 (+14.34%)FIGR Figure Technology Solutions, Inc. 73.91 +9.00 (+13.86%)Top losersZGN Ermenegildo Zegna N.V. 9.56 -1.46 (-13.25%)SSL Sasol Limited 6.31 -0.84 (-11.75%)TLN Talen Energy Corporation 371.66 -47.41 (-11.31%)CEG Constellation Energy Corporation 307.71 -33.42 (-9.80%)GTM ZoomInfo Technologies Inc. 9.04 -0.97 (-9.65%)Most activeWMT Walmart Inc. 119.70 +0.50 (+0.42%)NVDA NVIDIA Corporation 186.11 -1.01 (-0.54%)IBRX ImmunityBio, Inc. 5.52 +1.57 (+39.75%)ONDS Ondas Inc. 12.14 -0.71 (-5.50%)INTC Intel Corporation 46.99 -1.28 (-2.65%)Top economic eventsEarnings eventsMy earnings eventsEarnings events