ARMOUR Residential REIT is an externally managed mortgage REIT that invests exclusively in Agency mortgage-backed securities (MBS) — residential mortgage bonds guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. Because these bonds carry a government guarantee, ARMOUR takes no meaningful credit risk; the risks it runs are interest rate risk and spread risk. ARMOUR's core business is a leveraged spread trade: borrow short-term in the repo market and invest in higher-yielding, longer-duration Agency MBS, pocketing the difference as net interest income. ARMOUR typically operates at 7–8x leverage, amplifying the net interest spread into equity returns. To manage interest rate duration, ARMOUR uses swaps and Treasury futures, though these hedges do not protect against Agency MBS spread widening relative to Treasuries. ARMOUR concentrates over 90% of its portfolio in "specified pools" — MBS with characteristics that slow prepayments — to reduce the risk of premium amortization from faster-than-expected mortgage refinancings. ARMOUR owns a 10.8% stake in BUCKLER Securities, an affiliated broker-dealer that provides roughly half of its repo financing. ARMOUR has no employees; its portfolio is managed by external manager ARMOUR Capital Management, which charges fees based on gross equity raised rather than performance. As a REIT, ARMOUR must distribute at least 90% of taxable income, driving a consistent monthly dividend. ARMOUR actively manages its equity base through an at-the-market stock issuance program.