This year’s bank failures created a silver lining for bond investors—after the Federal government took control of assets from Silicon Valley Bank and others, it liquidated billions of dollars in mortgage-backed securities (MBSs). Result: Prices for MBSs fell, making them an alternative to 10-year US Treasuries. How MBSs work: When you take out a home mortgage, the lender may sell your loan to a government-­sponsored or private mortgage company. The best-known of these, Ginnie Mae (Government National Mortgage Association), bundles residential mortgages to ­create investments that pay interest like a bond. There’s no credit risk because Ginnie Mae’s MBSs are guaranteed against default by the government. Recent yields were 3% to 3.5%—versus 3.9% on 10-year Treasuries, plus you have an opportunity for capital appreciation. Ways to play MBSs now…

Vanguard GNMA Fund (VFIIX). Best for very conservative investors, this fund holds more than 13,000 Ginnie Mae securities. Recent yield: 3.07%.

Vanguard Mortgage-Backed Securities ETF (VMBS). A slightly riskier fund that owns AAA-rated MBSs issued by two government-sponsored entities—Fannie Mae and Freddie Mac. These securities are not guaranteed by the Federal government, but Fannie Mae and Freddie Mac promise to make investors whole if the underlying mortgages go into default. Recent yield: 3.35%.

DoubleLine Total Return Bond Fund (DLTNX) is more aggressive, investing in lower-quality MBSs issued by private lenders who don’t guarantee against default. Two advantages: The fund’s recent 3.8% yield…and ­talented fund manager Jeffrey Gundlach.

Caution: MBSs don’t have the tax advantages of US Treasuries so they are best kept in tax-deferred accounts.

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