- Founded in 1985 and based in Dallas, Texas, Capstead is the oldest publicly-traded residential mortgage REIT.
- Our sole focus is on managing a leveraged portfolio of short-duration* agency-guaranteed (i.e. Fannie Mae, Freddie Mac and Ginnie Mae) residential adjustable-rate mortgage ("ARM") securities that is appropriately hedged and can earn attractive risk-adjusted returns over the long term, with little, if any, credit risk.
Proven Strategy of Efficiently Managing a Leveraged Portfolio of Short-Duration Agency-Guaranteed ARM Securities
- Our short-duration strategy differentiates us from our peers because the adjustable-rate mortgages underlying our portfolio reset to more current interest rates within a relatively short period of time:
- allowing us to benefit from a potential recovery in financing spreads that typically contract during periods of rising interest rates, and
- resulting in smaller fluctuations in portfolio values from changes in interest rates compared to portfolios containing a significant amount of longer-duration ARM or fixed-rate mortgage securities.
- By virtue of being internally-managed and with our sole focus on agency-guaranteed securities, we are arguably the most efficient mortgage REIT in the industry.
Experienced Management Team Aligned with Stockholders
- Our top three executive officers have a combined 75 years of mortgage finance industry experience.
- We are internally-managed with low operating costs and a strong focus on performance-based compensation.
- This structure greatly enhances the alignment of management interests with those of our stockholders.
Straight-forward Investment Strategy and Transparent Reporting
- This singular and straight-forward investment strategy, together with our use of cash flow hedge accounting allows for easily understood, transparent financial reporting, with limited use of non-GAAP financial measures.
- Additional transparency is evident by virtue of our internally-managed structure – our compensation-related decisions and costs are fully disclosed and subject to annual say-on-pay approvals.
- We make every effort to provide additional analysis in our earnings reports, SEC filings and analyst presentations that tells our story in a complete and straight-forward fashion.
* Duration is a measure of market price sensitivity to interest rate movements. A shorter duration generally indicates less interest rate risk.