Interest Rates: Rising interest rates generally decrease bond prices, as newly issued bonds offer higher yields, making older bonds less attractive.

Credit Risk: Increased perceived risk of the underlying mortgages defaulting can lower the fund's price. This includes factors like economic downturns or rising unemployment.

Prepayment Risk: Homeowners refinancing at lower rates or selling their homes faster than expected can lead to unexpected returns of principal, impacting the fund's yield and price negatively.

Inflation: Higher inflation typically erodes the purchasing power of fixed-income investments, prompting investors to sell, thereby reducing bond prices.

Economic Growth: Strong economic growth often pushes up interest rates, which can negatively affect the fund's value. Slower growth can have the opposite effect.

Supply and Demand: Increased demand for mortgage-backed securities can drive up the fund's price, while increased supply or decreased demand can lower it.

Fund Management: The fund manager's skill in selecting and managing mortgage-backed securities can impact the fund's performance and, consequently, its price.