Group 1 - The Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL) primarily invests in Treasury Inflation-Protected Securities (TIPS) and hedges against variations in U.S. Treasury interest rates [1] - The ETF aims to provide protection against inflation while managing interest rate risk through its investment strategy [1] - Fred Piard, a quantitative analyst with over 30 years of experience, leads an investing group focused on quality dividend stocks and tech innovation [1]

Financial Data and Key Metrics Changes - The company's book value per share increased by 4.3% from $18.45 in the prior quarter to $19.25 [20] - Economic return for Q3 was 8.1%, bringing the year-to-date economic return to 11.5% [20][21] - Earnings available for distribution per share remained consistent at $0.73, exceeding the dividend for the quarter [22] - Average yields improved to 5.46% from 5.41% in the prior quarter, with net interest spread ex-PAA increasing to 1.5% [22][23] Business Line Data and Key Metrics Changes - The agency portfolio's market value increased to over $87 billion, up 10% quarter-over-quarter, with total growth of $7.8 billion [9] - Residential credit portfolio increased to $6.9 billion in economic market value, with average yields rising to 6.29% [11][22] - The mortgage servicing rights (MSR) portfolio increased by $215 million to $3.5 billion [15] Market Data and Key Metrics Changes - The U.S. economy showed resilience with GDP growth supported by consumer spending and AI-driven business investment [5] - Inflation remained elevated near 3%, with a modest impact from higher tariffs on goods inflation [6] - Labor market conditions weakened, with hiring slowing to 30,000 jobs per month [7] Company Strategy and Development Direction - The company maintains a diversified housing finance strategy, generating a 13% annualized economic return over the past three years [18] - Focus on maintaining high credit quality in residential credit and leveraging proprietary assets through the correspondent channel [15] - The company is positioned to benefit from expected Fed cuts and healthy fixed income demand [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the agency sector despite tighter spreads, citing improved fundamentals and technicals [26] - The outlook for the residential credit business is positive, with expectations for continued growth in the private label market [18] - Management remains cautious about taking on additional rate risk given current market uncertainties [56] Other Important Information - The company raised $1.1 billion of equity in Q3, including $800 million through its ATM program [8] - The MSR valuation multiple decreased slightly due to lower mortgage rates, but cash flows remain stable [16] - The company has $7.4 billion in unencumbered assets, including $5.9 billion in cash and Agency MBS [24] Q&A Session Summary Question: Agency returns and investment preferences - Management indicated that agency investments remain attractive despite tighter spreads, with expectations for increased demand from banks and REITs [26][27] Question: MSR bulk supply and pricing - Management noted that bulk supply has increased from large participants, with stable pricing throughout the year [29] Question: Breakdown of agency returns - Management provided insights on the spread to swaps versus treasuries, indicating a blended yield of about 160 basis points [33] Question: Book value performance - Management reported a 1% increase in book value pre-dividend accrual, translating to a 1.5% to 2% economic return [35] Question: Prepayment protection in the OBX portfolio - Management highlighted that the OBX portfolio has shown slower prepayment speeds than anticipated, benefiting from prepayment penalties [82]

Financial Data and Key Metrics Changes - The company's book value per share increased by 4.3% from $18.45 in the prior quarter to $19.25, achieving an economic return of 8.1% for Q3 and 11.5% year-to-date [20][21] - Earnings available for distribution per share remained consistent at $0.73, exceeding the dividend for the quarter [22] - The average yield improved to 5.46% from 5.41% in the prior quarter, while the average repo rate improved by three basis points to 4.5% [22][23] Business Line Data and Key Metrics Changes - The agency portfolio's market value increased to over $87 billion, up 10% quarter-over-quarter, with total growth of $7.8 billion [9][10] - The residential credit portfolio increased to $6.9 billion in economic market value, with significant contributions from securitization and loan purchases [11][12] - The mortgage servicing rights (MSR) portfolio increased by $215 million to $3.5 billion, with stable cash flows and low delinquency rates [15][16] Market Data and Key Metrics Changes - The U.S. economy showed resilience with GDP growth supported by consumer spending and AI-driven business investment, despite elevated inflation near 3% [5][6] - Labor market conditions weakened, with hiring slowing to 30,000 jobs per month, leading to a slight increase in the unemployment rate [7] - Interest rate volatility declined, benefiting the company's portfolio by lowering convexity costs [8] Company Strategy and Development Direction - The company maintains a diversified housing finance strategy, generating a 13% annualized economic return over the past three years [19] - The investment strategies are positioned for the balance of the year, with expectations of declining macro volatility and additional Fed cuts [18] - The company aims to increase its residential credit and MSR weightings to a combined 40% [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for the agency sector, citing improved demand dynamics and expectations for regulatory reform [17][18] - The company remains cautious about taking on additional rate risk, preferring to maintain a stable duration profile amid market uncertainties [56][59] - The management highlighted the importance of maintaining high credit quality in the residential credit portfolio, especially in light of softer housing market conditions [15] Other Important Information - The company raised $1.1 billion of equity in Q3, including $800 million through its ATM program [8] - The MSR valuation multiple decreased modestly due to lower mortgage rates, but the portfolio remains well insulated [16] Q&A Session Summary Question: Agency returns and investment preferences - Management noted that despite tighter spreads, the agency sector remains attractive due to improved fundamentals and technicals [26] Question: Bulk supply and pricing for MSR - The bulk supply has increased from large participants, with stable pricing encouraging future bulk supply [29] Question: Breakdown of agency returns - The spread to swaps versus treasuries is around 35 to 40 basis points, with low realized volatility aiding hedging costs [33] Question: Outlook for mortgage spreads and securitization - Non-QM issuance is expected to grow, with the market penetration of non-QM loans increasing significantly [47][49] Question: Duration risk and portfolio management - The company is currently maintaining a close-to-zero duration gap due to market uncertainties, with a cautious approach to taking on additional rate risk [56][59]

Financial Data and Key Metrics Changes - The company's book value per share increased by 4.3% from $18.45 in the prior quarter to $19.25, achieving an economic return of 8.1% for Q3 and 11.5% year to date [19][20] - Earnings available for distribution per share remained consistent at $0.73, exceeding the dividend for the quarter [20] - The average yield improved to 5.46% compared to 5.41% in the prior quarter, while the average repo rate improved by three basis points to 4.5% [20][21] Business Line Data and Key Metrics Changes - The agency portfolio's market value increased to over $87 billion, up 10% quarter over quarter, with total growth of $7.8 billion [10] - The residential credit portfolio increased to $6.9 billion in economic market value, with new origination non-QM AAA spreads tightening by 15 basis points [12] - The mortgage servicing rights (MSR) portfolio increased by $215 million to $3.5 billion, with stable cash flows and unchanged serious delinquencies at 50 basis points [15] Market Data and Key Metrics Changes - The U.S. economy showed resilience with GDP growth likely on pace with Q2, supported by consumer spending and AI-driven business investment [6] - Labor market conditions weakened, with hiring slowing to 30,000 jobs per month, while inflation remained elevated near 3% [6][7] - The agency MBS market saw improved supply and demand dynamics, with fixed income fund inflows more than 50% higher than the average over the past few quarters [10] Company Strategy and Development Direction - The company maintains a diversified housing finance strategy, which has generated a 13% annualized economic return over the past three years [17] - The focus remains on maintaining a high credit quality portfolio and leveraging proprietary assets through the correspondent channel [14] - The company is positioned to benefit from expected Fed cuts and a healthy fixed income demand, with plans to increase allocations to residential credit and MSR [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook, highlighting the benefits of declining macro volatility and anticipated Fed cuts [16] - The company remains flexible in the current investing climate with historically low leverage and significant liquidity [18] - Concerns about the housing market were noted, with expectations of modest cumulative depreciation due to elevated mortgage rates [14] Other Important Information - The company raised $1.1 billion of accretive equity in Q3, including $800 million through its ATM program [9] - The MSR valuation multiple decreased modestly due to lower mortgage rates, but the portfolio remains well insulated [15] Q&A Session Summary Question: Agency returns and investment preferences - Management indicated that agency investments remain attractive despite tighter spreads, with expectations for increased demand from banks and overseas participants [26][27] Question: MSR bulk supply and pricing - The bulk supply has increased from large participants, with stable pricing throughout the year, encouraging future bulk supply [29][30] Question: Agency returns breakdown - The spread to swaps versus treasuries is around 35 to 40 basis points, with low realized volatility aiding hedging costs [35][36] Question: MSR purchase strategy - The company prefers lower note rate MSRs to mitigate negative convexity risk, with a focus on maintaining a diversified portfolio [46][48] Question: Outlook for mortgage spreads and securitization - Management expects stable mortgage spreads to support continued market activity, with NonQM market penetration increasing [51][54] Question: Duration risk and portfolio management - The company is currently maintaining a close to zero duration gap due to market uncertainty, with plans to manage risks carefully [62][66] Question: GSEs' potential impact on the market - Speculation exists regarding GSEs becoming more active buyers, but the market has strong demand from REITs and fixed income funds [70][71]

Financial Data and Key Metrics Changes - The book value per share increased by 4.3% from $18.45 in the prior quarter to $19.25, achieving an economic return of 8.1% for Q3 2025 and 11.5% year-to-date [19][20] - Earnings available for distribution per share remained consistent at $0.73, exceeding the dividend for the quarter [20] - The average yield improved to 5.46% from 5.41% in the prior quarter, while the average repo rate improved by three basis points to 4.5% [20] Business Line Data and Key Metrics Changes - The agency portfolio's market value increased to over $87 billion, up 10% quarter-over-quarter, with a total growth of $7.8 billion [8][19] - The residential credit portfolio increased to $6.9 billion in economic market value, with significant contributions from new securitizations [10][11] - The mortgage servicing rights (MSR) portfolio increased by $215 million to $3.5 billion, with stable cash flows and low delinquency rates [13][14] Market Data and Key Metrics Changes - The U.S. economy showed resilience with GDP growth supported by consumer spending and AI-driven business investment, despite elevated inflation near 3% [4][5] - Labor market conditions weakened, with hiring slowing to 30,000 jobs per month, leading to a slight increase in the unemployment rate [5] - The agency MBS market saw improved supply and demand dynamics, with fixed income fund inflows over 50% higher than average [9] Company Strategy and Development Direction - The company maintains a diversified housing finance strategy, focusing on agency MBS, residential credit, and MSR, which has generated a 13% annualized economic return over the past three years [16][18] - The outlook remains positive, with expectations of additional Fed cuts and healthy fixed income demand supporting investment strategies [17][18] - The company aims to increase its residential credit and MSR weightings to a combined 40% in the near term [26] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment is expected to remain stable, with declining volatility and a favorable technical backdrop for agency MBS [16][17] - The company is cautious about taking on additional rate risk, preferring to maintain a close-to-zero duration gap due to market uncertainties [50][52] - The management expressed confidence in the stability of earnings available for distribution, supported by a strong swap portfolio and low leverage [60][67] Other Important Information - The company raised $1.1 billion of equity in Q3, including $800 million through its ATM program, and reopened the mortgage REIT preferred market [6][7] - The MSR valuation multiple decreased slightly due to lower mortgage rates, but the portfolio remains well insulated with stable cash flows [14][15] - A new partnership with PennyMac Financial Services was announced, enhancing the company's servicing capabilities [16] Q&A Session Summary Question: Agency returns and investment preferences - Management indicated that agency investments remain attractive despite tighter spreads, with expectations for increased demand from banks and REITs as the Fed continues to cut rates [25][26] Question: Bulk supply and pricing of MSR - The bulk supply of MSR has increased by 50%, primarily from large participants, with stable pricing throughout the year [27] Question: Breakdown of agency returns - The spread to swaps versus treasuries is around 35 to 40 basis points, with a blended yield of about 160 basis points, indicating a favorable risk-return profile [30] Question: Prepayment protection in specified pools - Management discussed the advantages of specified pools for prepayment protection, emphasizing their long-term options and favorable convexity profiles [34][35] Question: Outlook for mortgage spreads and securitization - The company expects continued activity in the non-QM market, with stable mortgage spreads allowing for growth despite seasonal pressures [42][43] Question: Duration risk and leverage - Management confirmed a cautious approach to duration risk, maintaining a close-to-zero duration gap while evaluating opportunities for future leverage [50][52] Question: Stability of NII and dividend coverage - The company expressed confidence in maintaining stable NII levels and ensuring dividend coverage, supported by a strong hedge ratio [58][67]

Core Insights - AGNC Investment Corp. (AGNC) is experiencing a decline in its book value per share (BVPS), reflecting challenges in its underlying portfolios [1][2] Financial Performance - AGNC's tangible net book value per share fell by 7% year-over-year to $7.81 in Q2 2025, primarily due to market volatility and increased debt servicing costs [2][8] - The economic return on tangible common equity for AGNC was negative 1% in Q2 2025, influenced by unrealized losses from mortgage-backed securities (MBS) [3][8] - AGNC's peers, Arbor Realty Trust (ABR) and Orchid Island Capital (ORC), are also facing declines in their book values, with ABR's BVPS at $18.45 and Orchid Island's at $7.21 as of June 30, 2025 [4][5] Market Conditions - The performance of mREITs like AGNC is closely linked to macroeconomic trends, including interest rate fluctuations and the yield curve, which have negatively impacted investment returns [2] - The widening of mortgage spreads relative to U.S. Treasuries has significantly contributed to the decline in AGNC's book value [3] Valuation Metrics - AGNC shares have increased by 11.9% over the past year, outperforming the industry growth of 6.9% [6] - The forward price-to-tangible book (P/TB) ratio for AGNC is 1.24X, higher than the industry average of 0.97X [10] Earnings Estimates - The Zacks Consensus Estimate for AGNC's earnings indicates year-over-year declines of 15.4% for 2025 and 0.9% for 2026, with estimates remaining unchanged over the past week [13] - Current earnings estimates for AGNC are $1.59 for 2025 and $1.57 for 2026, reflecting a significant decrease from the previous year's earnings [15]

Financial Data and Key Metrics Changes - Hilltop reported net income of approximately $36 million or $0.57 per diluted share for Q2 2025, with a return on average assets of 1% and return on average equity of 6.6% [4] - Net interest income increased by 7% year-over-year, totaling $110.7 million, while net interest margin improved by 17 basis points to 301 basis points [16][19] - The allowance for credit losses declined by $8.2 million to $98 million, with a net reversal of credit losses of $7.3 million during the quarter [15][8] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $55 million of pretax income on average assets of $12.7 billion, resulting in a return on average assets of 1.35% [5] - PrimeLending reported a pretax gain of $3 million, including a nonrecurring legal settlement of $9.5 million, while origination volumes increased by 2% year-over-year [9][10] - Hilltop Securities generated pretax income of $6 million on net revenues of $110 million, with public finance services seeing a 36% year-over-year increase in net revenues [11][12] Market Data and Key Metrics Changes - Average total deposits at PlainsCapital declined during the quarter, reflecting normal seasonal flows, but are expected to grow again in the second half of 2025 [17][7] - Core deposits increased by approximately $275 million year-over-year, indicating strong growth in the market [8] - Mortgage revenues declined by $12 million due to lower valuation marks and origination fees, highlighting ongoing challenges in the mortgage banking sector [19][20] Company Strategy and Development Direction - The company aims to manage deposit costs actively while expanding lending activity, focusing on maintaining strong capital levels with a common equity Tier one capital ratio of 20.8% [13][8] - Hilltop is looking to continue share repurchases and evaluate M&A opportunities, particularly in cash-type deals, as the stock trades at a discount to tangible book value [58][59] - The company is adjusting its expected full-year average loan growth rate to 0% to 2% for 2025, reflecting competitive pressures and market conditions [23][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the bank's performance despite uncertainties in the market regarding interest rates and inflation [24][25] - The outlook for 2025 reflects the current assessment of the economy, with expectations for continued activity in M&A and a focus on returning the mortgage business to profitability [25][58] - Management noted that competition in the mortgage origination market remains challenging, impacting overall margins and production volumes [9][10] Other Important Information - The company returned over $46 million to stockholders through dividends and share repurchases during the quarter [5][13] - Fixed expenses increased by 1.8% year-over-year, driven by higher variable compensation and inflation in personnel and software costs [20][34] Q&A Session Summary Question: Regarding the broker dealer business and efficiency ratio - Management indicated that the elevated efficiency ratio is largely due to the revenue mix, with public finance services up and structured finance flat or down [30][32] Question: On fixed expense guidance - The increase in non-variable expense outlook is driven by inflation in personnel and software costs [34] Question: About net interest margin (NIM) and deposit beta - Management noted that improved analytics and a more rational marketplace contributed to achieving a higher than expected deposit beta [34][35] Question: On loan growth and competition - Management discussed strong pipelines but acknowledged that competition is impacting loan growth, particularly in commercial real estate and C&I portfolios [42][46] Question: On capital management and share repurchases - Management confirmed a strong appetite for share repurchases, with $135 million authorized for 2025, and noted ongoing M&A activity in the market [58][59] Question: About classified loans and credit quality - The improvement in classified loans was primarily driven by paydowns and successful workout activities [61] Question: On deposit costs and outflows - Management expects seasonal outflows to normalize and deposits to rebuild in the latter half of the year [63]

Summary of Seven Hills Realty Trust (SEVN) Conference Call Company Overview - **Company**: Seven Hills Realty Trust (SEVN) - **Market Cap**: Approximately $177 million - **Industry**: Commercial Mortgage REITs - **Management**: Externally managed by RMR Group, which has over $40 billion in assets under management [2][3] Key Points and Arguments RMR Platform and Competitive Advantage - Seven Hills benefits from the extensive resources and knowledge of the RMR platform, which operates across various commercial real estate sectors [4][5] - The firm has access to a broad deal flow due to RMR's management of multiple REITs, enhancing loan sourcing and asset management capabilities [8][10] - The company focuses on middle-market loans, typically ranging from $20 million to $75 million, which provides more pricing power and a sophisticated borrowing base [11][12] Loan Portfolio and Risk Management - Seven Hills maintains a vertically integrated structure, handling all critical functions internally, including origination, underwriting, and asset management [13][14] - The company emphasizes strong sponsorship, focusing on borrowers with proven track records and financial capability to support their projects [15][16] - The firm has only had to foreclose on one asset, indicating effective credit management and risk assessment [34] Interest Rate Environment - The current elevated interest rate environment has created challenges, but the company remains competitive with net interest rate spreads averaging about 1.5% on recent originations [21][22] - The volatility in interest rates has impacted transaction activity, with borrowers hesitant to commit during uncertain periods [27][29] - Seven Hills expects a couple of rate cuts in 2025, which could positively influence origination activity [30] Loan Performance and Future Outlook - The company has a robust pipeline of approximately $1 billion in potential deals, with expectations of $125 million to $150 million in repayments during 2025 [41][42] - The current cash position is about $42 million, deemed adequate for operational needs and upcoming originations [50] - The dividend has been well-covered historically, with a current payout of $0.35 per quarter, and the company anticipates maintaining solid earnings coverage [51][52] Market Dynamics and Opportunities - Banks are expected to maintain lower real estate exposure, creating opportunities for alternative lenders like Seven Hills to capture market share [44][45] - The company is focused on sectors with strong fundamentals, such as multifamily, industrial, select-service hotels, and grocery-anchored retail [59][60] Additional Important Insights - The company has a strong focus on repeat sponsorship, with about one-third of their volume coming from repeat borrowers [58] - The firm is cautious about over-leveraged assets and prefers to work with sponsors who can contribute additional equity when necessary [55][56] This summary encapsulates the key insights from the conference call, highlighting Seven Hills Realty Trust's strategic positioning, market dynamics, and future outlook in the commercial mortgage REIT sector.

Core Viewpoint - AGNC Investment Inc. has experienced an 11.6% decline in share price over the past three months, which is more significant than the industry's decline of 8.5%, reflecting broader challenges in the mortgage market due to rate volatility [1][4]. Price Performance - AGNC's peers, Annaly Capital Management and Arbor Realty Trust, have also seen declines of 5% and 21.4%, respectively, in the same period [1]. - Despite recent price drops, AGNC offers attractive long-term returns with a high dividend yield, which may attract investors [4]. Interest Rate Environment - AGNC's performance is heavily influenced by the interest rate environment, particularly decisions made by the Federal Reserve [5]. - The company's net interest income (NII) fell dramatically from $965 million in 2022 to just $18 million in 2024 due to rising borrowing costs [6]. - A reduction in interest rates by 100 basis points in 2024 positively impacted AGNC's NII, which rose to $159 million in Q1 2025 from a negative $30 million in the same quarter the previous year [7]. Mortgage Rates and Activity - Recent trends show a slight decline in mortgage rates, with the average 30-year fixed-rate mortgage at 6.76% as of May 8, 2025, down from 7.09% a year prior [7]. - Lower mortgage rates are expected to boost origination and refinancing activities, which could enhance AGNC's NII and portfolio value [8][21]. Dividend Yield - AGNC's current dividend yield stands at 16.38%, significantly higher than the industry average of 12.03%, making it an attractive option for income-seeking investors [10]. - The company has a payout ratio of 81% and is engaged in a stock repurchase plan, authorizing up to $1 billion in buybacks through December 31, 2026 [11]. Agency MBS Outlook - AGNC focuses on agency mortgage-backed securities (RMBS), which are backed by U.S. government guarantees, positioning it well in this market segment [12]. - The outlook for agency MBS has improved, although market volatility has increased following recent tariff announcements [13]. - AGNC generated a positive economic return of 2.4% in Q1 2025, supported by its dividend strategy [14]. Valuation - AGNC is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 5.36X, below the industry average of 7.74X, indicating it may be undervalued [22]. - Compared to peers, AGNC's P/E is lower than Annaly Capital Management's 6.66X and Arbor Realty Trust's 8.44X [22]. Investment Consideration - Given the strong fundamentals, high dividend yield, and potential for growth in a declining rate environment, AGNC stock may be a worthwhile addition to investment portfolios [24].

Financial Data and Key Metrics Changes - The company reported a positive economic return of 2.6% for the quarter, consisting of a $0.34 dividend and a modest $0.11 decline in book value to $8.81 [9][10] - The estimated book value per common share as of April 30 is between $7.74 and $8.06, reflecting a decline in April due to market volatility [10][26] - The leverage ratio was reduced from 7.1x to the mid-6s, indicating a cautious approach in response to market conditions [24][26] Business Line Data and Key Metrics Changes - The agency RMBS portfolio increased by 9.5% quarter over quarter, with investments focused on higher coupon securities [19] - The company rotated its allocations from lower coupons to higher coupons, capitalizing on attractive valuations [20] - Agency CMBS exposure remained at approximately 15% of the total investment portfolio, with new purchases yielding low double-digit ROEs [21] Market Data and Key Metrics Changes - U.S. Treasury yields declined by 20 to 40 basis points across the yield curve during the first quarter, driven by concerns over economic growth [12][13] - The Fed funds futures market is now pricing in deeper cuts, with expectations for the target rate to be reduced three to four times in 2025 [14] - Agency mortgages underperformed treasuries in April due to increased interest rate volatility and market sell-offs [9][23] Company Strategy and Development Direction - The company remains focused on higher coupon Agency RMBS, anticipating improved demand from banks and overseas investors as interest rate volatility declines [20][26] - The strategy includes increasing allocations to specified pools with predictable prepayment characteristics, particularly those with low credit score borrowers [20] - The company is cautious on agency mortgages in the near term but maintains a favorable long-term outlook due to expected improvements in investor demand [10][26] Management's Comments on Operating Environment and Future Outlook - Management noted tightening financial conditions and increased uncertainty regarding monetary and fiscal policies, impacting market sentiment [6][10] - The outlook for the second half of the year is cautiously optimistic, with expectations for improved demand for Agency RMBS as the economic environment stabilizes [16][26] - Management emphasized the importance of maintaining liquidity and reducing leverage to navigate current market volatility [24][26] Other Important Information - The company has been disciplined in adding exposure to Agency CMBS, focusing on relative value and risk diversification [21] - The funding market for assets has remained stable, with repo spreads consistent and haircuts unchanged [15] - The company has sold remaining credit investments, focusing entirely on agency assets [65] Q&A Session Summary Question: Can you discuss the decision to take down leverage? - The company reduced leverage by about 0.5 turns due to increased uncertainty regarding monetary, fiscal, and trade policy, which could impact mortgage demand [29][30] Question: What are the current returns on an incremental basis? - Levered ROEs are in the low 20s on higher coupons, indicating attractive spreads [32] Question: Can you comment on changes to the hedge portfolio in April? - The hedge ratio was increased due to uncertainty about near-term monetary policy, maintaining a mix of swaps and treasuries [35][36] Question: How does the smaller portfolio size impact the dividend level? - The company is comfortably covering the dividend despite the portfolio size reduction, with supportive ROEs from reinvestments [38] Question: How do current opportunities in agency compare to previous peaks? - The opportunity in mortgages is attractive, but there is caution regarding potential inflation and its impact on monetary policy adjustments [41][42] Question: What is the outlook for forward rates and the hedge portfolio? - There is uncertainty about future cuts, with a conservative approach to managing the hedge portfolio and leverage [50][52] Question: Are there opportunities in commercial credit? - The company has been hesitant to add credit exposure and has sold remaining credit investments, focusing solely on agency assets [64][65]