GET DAILY SIGNALSEARN vs REM: Comparing Ellington Credit Company and the iShares Mortgage Real Estate ETF
Key Takeaways
- EARN is not a traditional exchange-traded fund (ETF): it is a closed-end fund (CEF) that pivoted from mortgage-backed securities to collateralized loan obligations (CLOs), while REM is a passive ETF tracking mortgage real estate investment trusts (REITs).
- Cost profiles differ sharply — EARN carries a gross expense ratio near 9.22%, versus REM at 0.48%.
- REM holds roughly 35 diversified mortgage REITs, whereas EARN concentrates risk in the subordinate debt and equity tranches of corporate CLOs.
- EARN offers a substantially higher distribution rate, but with greater credit and book-value risk; REM provides a lower but more diversified yield.
- Tickeron AI Verdict: On structural strength, cost efficiency, diversification, and liquidity, Tickeron's AI favors REM.
Understanding the Core Differences
Income-focused investors often evaluate vehicles that deliver high yields through very different approaches. EARN (Ellington Credit Company) and REM (iShares Mortgage Real Estate ETF) both operate in the credit and real-estate finance space, yet they follow distinct paths. I checked this using Tickeron’s AI Screener to see how the two line up on key metrics. REM tracks a broad index of mortgage REITs passively, while EARN is an actively managed closed-end fund focused on specific slices of CLOs. Their risk, cost, and liquidity profiles set them apart in meaningful ways.
Ellington Credit Company (EARN) in Focus
Ellington Credit Company, formerly Ellington Residential Mortgage REIT, shifted strategy on April 1, 2025, moving from a mortgage REIT structure to a registered closed-end fund. It is managed externally and now targets the mezzanine debt and equity tranches of corporate CLOs backed by floating-rate leveraged loans. Roughly half to two-thirds of the portfolio sits in CLO equity, the riskiest first-loss portion, with the rest in CLO debt. The gross expense ratio stands near 9.22% with a 1.5% management fee and net assets around $150 million. Distributions have hovered near 23% to 24% annually, though net investment income has covered only about two-thirds of those payouts, and NAV has declined amid wider credit spreads. As a closed-end fund, EARN trades at a premium or discount to NAV, recently at a premium, which adds another layer of valuation risk.
iShares Mortgage Real Estate ETF (REM) in Focus
The iShares Mortgage Real Estate ETF (REM) follows the FTSE Nareit All Mortgage Capped Index, a cap-weighted basket of U.S. mortgage REITs holding residential and commercial mortgages. Launched in 2007 by BlackRock, it holds about 35 holdings concentrated in financials and carries a 0.48% expense ratio. Leading positions include NLY (roughly 22%), AGNC (about 15%), STWD, RITM, DX, and EFC, with smaller stakes in ARR, BXMT, LADR, and ORC. Its trailing twelve-month yield sits in the high single digits, and the larger asset base supports stronger daily liquidity than EARN.
Market Environment and Key Drivers
Both funds respond to interest-rate and credit conditions, but in different ways. Mortgage REITs in the REM portfolio borrow short and invest in mortgage assets, making their margins sensitive to the yield curve and Federal Reserve moves. Steep curves help, while sharp rate changes and wider MBS spreads weigh on book values. EARN’s CLO focus ties its results more to leveraged-loan performance, default rates, and credit-spread movements. Its conversion to a regulated investment company and exit from agency RMBS has further altered its profile, while REM offers a straightforward, rules-based view of the mortgage REIT sector.
Recent Performance and Relative Positioning
Over recent periods, the two have moved differently based on their exposures. REM has tracked the broader mortgage REIT group with diversified holdings, a high single-digit yield, and measured volatility. EARN’s shift to CLOs occurred alongside wider credit spreads and mark-to-market losses on equity tranches, leading to NAV pressure and a smaller book value even as distributions continued. REM’s index approach brings breadth and lower costs, whereas EARN delivers concentrated exposure with higher yield but added credit and valuation complexity. From what I see, REM’s diversified structure has shown more consistent positioning for risk-adjusted outcomes.
How I Use Tickeron’s AI Screener
In my research process, I often turn to Tickeron’s AI Screener to compare funds like these side by side. It lets me apply filters for expense ratios, yields, sector exposures, and performance metrics quickly, helping confirm the structural advantages noted here. The tool surfaces relative data efficiently and supports more objective analysis between vehicles such as EARN and REM.
Tickeron AI Verdict
Considering structural strength, cost efficiency, diversification, trend consistency, and risk exposure, Tickeron’s AI currently favors REM. Its 0.48% expense ratio, 35-holding diversification across mortgage REITs, deeper liquidity, and transparent index methodology deliver a more balanced profile. EARN’s higher expense ratio, concentrated CLO-equity exposure, premium to NAV, and declining book value add complexity and credit risk that its elevated distribution rate does not fully offset. On balance, REM offers the more durable positioning for most income-focused investors.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
REM's RSI Oscillator climbs out of oversold territory
The RSI Indicator for REM moved out of oversold territory on October 20, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 27 similar instances when the indicator left oversold territory. In 25 of the 27 cases the stock moved higher. This puts the odds of a move higher at 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on November 04, 2026. You may want to consider a long position or call options on REM as a result. In 69 of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 81%.
The Moving Average Convergence Divergence (MACD) for REM just turned positive on October 15, 2026. Looking at past instances where REM's MACD turned positive, the stock continued to rise in 38 of 43 cases over the following month. The odds of a continued upward trend are 88%.
Following a +2.58% 3-day Advance, the price is estimated to grow further. Considering data from situations where REM advanced for three days, in 254 of 311 cases, the price rose further within the following month. The odds of a continued upward trend are 82%.
REM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 55 of 70 cases where REM's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 79%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where REM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 85%.
The Aroon Indicator for REM entered a downward trend on October 28, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Industry description
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
Category RealEstate
Advertisement