ARMOUR Residential REIT (NYSE:ARR) is a mortgage real estate investment trust that was formed in 2008 to acquire and manage a portfolio of residential mortgage-backed securities (RMBS). The company’s investments are primarily agency-sponsored and agency-guaranteed RMBS issued by U.S. government-sponsored enterprises, along with credit risk transfer securities and select non-agency residential and multifamily RMBS. By focusing on high-quality mortgage assets, ARMOUR Residential REIT seeks to generate stable income and preserve capital through diversified exposure to the U.S. residential mortgage market.
The trust operates under an externally managed structure, with portfolio management and day-to-day operations handled by affiliates of Armour Capital Management, LP. This partnership enables ARMOUR Residential REIT to leverage deep mortgage analytics, risk management expertise and trading capabilities. The REIT utilizes both equity and debt financing to fund its acquisitions, aiming to optimize its capital structure and enhance risk-adjusted returns.
ARMOUR Residential REIT’s investment strategy emphasizes managing interest rate risk through duration and convexity alignment, as well as employing hedging instruments such as interest rate swaps and Treasury futures. The REIT seeks to generate attractive current income by capturing the spread between yields on its mortgage assets and its borrowing costs. Distributions to shareholders are funded primarily from net interest income and realized gains on mortgage securities.
Headquartered in the United States, ARMOUR Residential REIT offers investors targeted exposure to the residential mortgage sector without the complexities of direct mortgage origination. Since its initial public offering, the company has maintained a disciplined approach to portfolio construction, focusing on credit quality, liquidity and transparent reporting of its holdings and risk profile.
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