What this ETF is trying to do

The FlexShares Disciplined Duration MBS Index Fund (MBSD) is an exchange-traded fund (ETF) that focuses on Mortgage-Backed Securities (MBS). These are types of investments backed by pools of home loans.

What the numbers show

As of October 5, 2026, the share price of MBSD was $19.74.

When looking at performance, it is important to understand the difference between price return (the change in the share price) and total return (which includes the share price change plus distributions).

• Year-to-Date (YTD): The price return is -4.98%, while the total return is -2.43%.

• One Year: The price return is -5.32%, while the total return is -1.39%.

• Three Year: The price return is 0.71%, while the total return is 13.29%.

To put the one-year price change into perspective, the estimated price from roughly one year ago was $20.85. If an investor had put $10,000 into the shares one year ago, the value of those shares alone would be worth approximately $9,468 today, based on the price return.

Income and distribution explanation

MBSD usually pays out distributions monthly. Over the last 12 months, it made 12 payouts totaling $0.84 per share. This results in a distribution yield of approximately 4.25%.

It is important for beginners to remember that a high distribution yield alone can be misleading. While these payments provide cash income, they do not guarantee that the original investment (the principal) will stay the same or grow.

NAV erosion explanation

"NAV erosion" happens when the underlying value of a fund's assets declines over time. StockValueFinder uses an erosion-risk score to measure this. MBSD has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk rather than a guarantee that the fund's value has collapsed.

Pros

• Consistent Income: The fund has a history of monthly payouts.

• Positive Long-Term Total Return: The three-year total return is 13.29%.

Cons

• Recent Price Decline: Both the YTD and one-year price returns are negative.

• Erosion Risk: The fund has a "mild" erosion-risk label.

Beginner takeaway

MBSD provides regular cash income through monthly distributions. However, the share price has declined over the last year. Investors often care about principal stability because they want to make sure the cash they receive in distributions isn't simply coming from a shrinking share price. Always look at both the price return and the total return to get a full picture of how an ETF is performing.