Investors sell mortgage bond funds at fastest pace in six years

mortgage bond funds: Mortgage bond funds are investment vehicles that hold mortgage-backed securities, whose market values generally fall when interest rates and benchmark bond yields rise. They are relevant here because investors are selling these funds at their fastest pace in more than six years as a sharp increase in yields reduces the appeal and market value of mortgage-related debt. Rates: A broad bond-market selloff has pushed long-term Treasury yields to multiyear highs, increasing pressure on mortgage-backed securities. Market impact: Recent market commentary indicates that agency mortgage-backed-security spreads widened as interest-rate volatility intensified, adding to the strain on mortgage bond funds. Mortgage costs: Mortgage rates have risen alongside benchmark Treasury yields, reinforcing concerns about duration-related losses in mortgage-backed-security investments.