What do mortgage-backed securities allow investors to do?

Mortgage-backed securities (MBS) are a type of investment that allows investors to receive payments that are directly tied to the income generated from a pool of mortgage loans. When homeowners make their mortgage payments, those payments are collected and then distributed to the MBS investors, providing them with periodic payments.

This means that investors in mortgage-backed securities are essentially investing in the cash flows generated by home mortgages rather than owning physical properties or real estate assets. The payments can include both interest and principal components, making this an appealing investment for those seeking regular income.

The other options do not accurately describe the function of mortgage-backed securities. They do not guarantee high returns without risk, involve direct ownership of real estate, nor allow for investment in industrial sectors without bias. Instead, they provide an income stream based on mortgage payments, which is the core purpose of these financial instruments.