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The real estate market is beginning to stabilize and turn around, with existing home sales inching higher and appreciation in housing prices. While the residential and commercial real estate sectors have seen an impressive turnaround, exchange traded fund investors may also look to the mortgage-backed securities market.

Mortgage backed securities, or MBS, act as a tradable security that holds a pool of mortgage loans. A credit rating given for the single debt security based on the credit quality of the underlying pool of mortgage loans. The MBS market allows investors to trade liquid debt securities on the highly illiquid mortgage loans.

Bond guru Bill Gross recently started including higher allocations of mortgage securities into his Total Return Fund and PIMCO Total Return ETF (BOND — News ). [PIMCO Total Return ETF: Bill Gross Trims Treasury Holdings ]

On Wednesday, the Federal Reserve Open Committee reaffirmed its accommodative stance, reports Greg Robb for MarketWatch. Additionally, the Fed stated that it will reinvest principal payments from agency debt and mortgage-backed securities back in to the MBS market.

ETFs that track mortgage-backed securities include:

• iShares Barclays MBS Bond Fund (MBB — News ). MBB holds 303 investment grade U.S. agency mortgage-backed securities from the Barclays U.S. MBS Index, which mostly include fixed-rate securities from the Government National Mortgage Association, Federal National Mortgage Association and Freddie Mac. Over 75% of the holdings are in securities with maturities of 30 years, but the weighted average life is 3.1 years and the weighted average coupon is 4.52%. The fund has a 30-day SEC yield of 3.35% and an expense ratio of 0.31%.
• SPDR Barclays Capital Mortgage Backed Bond ETF (MBG — News ). MBG holds 29 U.S. investment grade agency mortgage pass-through securities from the Barclays Capital U.S. MBS Index. The average coupon is 4.63% with an average 5.14 years to maturity. The fund has a 1.79% dividend yield and an expense ratio of 0.32%.
• Vanguard Mortgage-Backed Securities ETF (VMBS — News ). VMBS tracks 362 U.S. agency mortgage-backed pass-through securities issued by Ginnie Mae, Fannie Mae and Freddie Mac. The average coupon is 4.7% with an average 5.1 years to maturity. The ETF has a 30-day SEC yield of 1.48% and an expense ratio of 0.15%.
• iShares Barclays CMBS Bond Fund (CMBS — News ). The recently launched CMBS includes 52 commercial mortgage-backed securities. The average coupon is 5.42% and the average maturity is 3.64 years. The fund has an expense ratio of 0.25% and a 30-day SEC yield of 4.65%.
• iShares Barclays GNMA Bond Fund (GNMA — News ). This relatively new fund follows 14 mortgage-backed pass-through securities issued by the Government National Mortgage Association, or Ginnie Mae. The average maturity is 4.43 years and the average coupon is 4.64%. The ETF has an expense ratio of 0.32% and a distribution yield of 0.95%.

For more information on the real estate market, visit our real estate category .

Max Chen contributed to this article .