Investment Strategy

Our sole focus is on managing a leveraged portfolio of short-duration* agency-guaranteed (i.e. Fannie Mae, Freddie Mac and Ginnie Mae) residential ARM securities that is appropriately hedged and can earn attractive risk-adjusted returns over the long term, with little, if any, credit risk. 

We finance our agency-guaranteed residential ARM securities primarily with 30- to 90-day secured borrowings augmented primarily with low-cost interest rate swap agreements for hedging purposes and longer-dated secured borrowings when available at attractive levels.

* Duration is a common measure of market price sensitivity to interest rate movements. A shorter duration generally indicates less interest rate risk.

Residential ARM Securities Portfolio

As of June 30, 2016

color x y actual prefix postfix
#b5cb79 Current-Reset ARMs $7.84 Billion (cost basis) 57  
#45444a Longer-to-Reset ARMs $5.88 Billion (cost basis) 43