Risks and Benefits of Investing in Mortgage REITs

This chapter discusses the risks faced by portfolio managers who invest in mortgage securities, including the impact of interest rate changes, refinancing risk, and the potential effects of an inverted yield curve. It compares the returns of mortgage REITs and equity REITs over a 20-year period, concluding that equity REITs offer higher total returns. The chapter also highlights the differing opinions of UBS, JP Morgan, and Edward Jones on investing in mortgage REITs.