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Is there any ETF, fund, security that closely tracks 30 year mortgage rates in the USA?

  • Or which ETF or security do 30 year mortgage rates track? – zundarz Aug 9 '11 at 13:53
  • long term rates generally track stuff like the appropriate 'prime' rate. – Chuck van der Linden Aug 9 '11 at 19:06
  • So what determines this 'prime rate'? – zundarz Aug 10 '11 at 20:05
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    I suggest you post that as another question, presuming it isn't a duplicate. – Chris W. Rea Aug 16 '11 at 18:15
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Mortgage rates tend to track the yield on the 10-year Treasury note. The CBOE Interest Rate 10-Year T-Note, TNX, is a security directly related to this rate. Divide the CBOE price of TNX by 10 to get the yield.

One can also track the 10Y T-Note yield at yahoo finance using ticker symbol (^TNX).

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TBF - Proshares short 20+ Year Treasury The TBF fund is designed to track (hopefully) 100 percent of the inverse daily returns of the Barclays Capital 20+ Year U.S. Treasury Index.

there's some risk of tracking error, and also a compounding effect if it's down several days in a row. (invest with care)

There's also a TBT fund, but the risks are even greater since it is leveraged, potentially you could make the right long term call, but lose a lot in the short term due to tracking error and effect of compounding) (that would tend to make this one more appropriate for short term 'bets' on interest rates, and less so for a long term investor)

There are also quite a few floating rate closed-end funds (Click here, then click on "loan participation funds") that should do well in a rising rate environment. Just beware that these funds seem to incorporate a substantial amount of credit risk as well as floating interest rate exposure.

Closed end funds trade a lot like securities, since the fund is closed, you have to buy shares from another owner that is selling (just like with stocks), that means the shares can sometimes trade above or below the underlying value of the actual assets held by the fund depending on buying/selling pressure and the relative liquidity of a given fund.

  • I'm refinancing and want to follow mortgage rates, and am looking to get daily quotes from someplace other than the .com lenders. – zundarz Aug 9 '11 at 21:54
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    So why didn't you just ask what's a good source of interest rate info? – Chuck van der Linden Aug 10 '11 at 1:45
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    In that case, I'd suggest maybe this page at bankrate.com bankrate.com/rates/interest-rates/libor.aspx it has some useful indexes, and there's an overnight rates table buried amongst ads on the right side also.. (yeah the ads are annoying, but it pays the bills and makes the content available) – Chuck van der Linden Aug 10 '11 at 1:51
  • Because I want to get to the same source those 'good sources' go. Where do bankrate et. al.get their information? I am assuming it is tied some governmental security that is available for all to see. – zundarz Aug 10 '11 at 16:59
  • Bankrate explains their methods on their site, they are continually doing surveys. They are gathering the data themselves, not just repeating data from some other source. – Chuck van der Linden Aug 11 '11 at 0:34

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