VMBS: Hold Rating Reflects Adequate Carry With A Negative Convexity Tax

Impact · against what's priced in

VMBS is unlikely to see price appreciation as its fundamental macro tailwinds are already reflected in its valuation. The ETF's negative convexity and yield of 4.15% make it a poor risk-adjusted alternative to floating-rate CLOs.

VMBS−0.40: No priced-in read yet
In context: The ETF's 4.15% yield and negative convexity result in inferior risk-adjusted returns compared to AAA CLOs, and macro benefits like the end of quantitative tightening are already reflected in the price.
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VMBS: Hold Rating Reflects Adequate Carry With A Negative Convexity Tax

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VMBS: Hold Rating Reflects Adequate Carry With A Negative Convexity Tax

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VMBS: Hold Rating Reflects Adequate Carry With A Negative Convexity Tax

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