MBB vs SCIO

MBBAiShares MBS ETF

SCIODFirst Trust Structured Credit Income Opportunities ETF

In short

MBB Launched in 2007, MBB is the plain-vanilla way to own U.S. agency mortgage bonds: one of the biggest and busiest funds in a small niche, tracking the Bloomberg U.S. MBS Index for four basis points.

SCIO Most of the mortgage-bond aisle is cheap index trackers holding thousands of agency loans. SCIO is the odd one out: an active First Trust book of roughly 50 structured credit positions, paying monthly.

Stated mandate

MBB The fund seeks to track an index composed of U.S. agency mortgage-backed securities.

SCIO The Fund seeks to maximize long-term income. Under normal market conditions, it invests at least 80% of net assets, plus investment borrowings, in structured credit investments such as RMBS, CMBS, CLOs and ABS.

Why people hold it

• MBB Four basis points to rent the entire agency mortgage market, against a category median near 0.35%. In low-coupon bond land, that gap compounds quietly.
• Scale is the real feature: one of the largest and most actively traded funds in the mortgage-bond category, which generally shows up as tighter spreads.
• Pays monthly, and the mandate stays narrow: an index of U.S. agency mortgage-backed securities, nothing exotic bolted on.
• Among the stronger builds in a thin peer group of mortgage-bond ETFs, on the combination of cost, trading friction and issuer staying power.

• SCIO Clear mandate: at least 80% of net assets in structured credit, with the stated goal of maximizing long-term income. Managers pick the paper instead of replicating an index.ftportfolios.com
• Income shows up monthly, which matches the fund's own income-first objective rather than a quarterly bond-fund rhythm.
• Roughly 50 positions, so manager selection actually drives the outcome. That is exposure a broad agency-MBS index fund like VMBS or MBB is not built to give you.
• For a niche credit strategy, it trades with moderate, workable volume and carries a real asset base behind it.

Worth knowing

• MBB This is one slice of the bond market. Agency mortgage paper only, with no Treasuries or corporates alongside it.
• Mortgage bonds cut both ways with rates: borrowers refinance when yields fall and sit tight when they rise, so the portfolio's duration shifts underneath you.
• On price it's a photo finish: SPMB tracks the same index at the same 0.04%, and VMBS runs a basis point cheaper.

• SCIO Active work costs money: 0.70% a year, versus single-digit basis points at index rivals such as VMBS (0.03%) and SPMB (0.04%).
• Launched in 2024, so the track record is short and has not been tested across a full credit cycle.
• It is shelved with mortgage-bond funds but does not behave like one. Structured credit carries different risks than government-backed agency paper.

Full MBB profile⁠

Full SCIO profile⁠