I thought the same thing, then I looked at price history and decided that the recent sell off from $14 range to the $11 range was all about the dividend cut that some knew about before the announcement. If you go back to the $14 price less 22% brings this down to the $10.90 range. Today's drop is over reaction in my opinion. I added today at $9.80 and will take the 17% while the dust settles. JMO
The fed can raise short term rates, but long term rates may or may not rise. A flattening or inverted yield curve can kill mriets. MORL also has a liquidation clause and in the event of a large panic market sell off, MORL may not be around for a rebound. JMO
The way that UBS makes money on ETN'S is proprietary . They do not share that information. In my opinion, they do own the shares of the underlying reits. The advantage to owning the ETN through UBS as opposed to doing it yourself through a margin account is the cost of funds you would pay compared to the cost of funds available for UBS.
I do not worry about a small hike in short term interest rates. I do worry about short term rates going up while the long term rates stay the same or decrease. The yield curve can kill mreits. I do not want to be around if we move toward an inverted yield curve.
One year ago the spread between the 3mo (0.04%) and the 10yr (2.77%) was 2.73% Today the spread is 1.84%. Mreits borrow short term and invest long term, making money on the spread. As the spread tightens, the ability to make profits without increasing leverage gets harder to do. Things will be great if short and long term rates rise slowly at the same level. That does not appear to be what is happening over the last year.