CYS Investments 8-K Regulation FD Disclosure

Investment Outlook

November, 2010

Kevin E. Grant, CFA

President & CEO

Exhibit 99.1

1

Forward Looking Statements

This presentation contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933,

as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on management’s beliefs and

assumptions, current expectations, estimates and projections. Such statements, including information relating to the Company’s

expectations for future financial performance, are not considered historical facts and are considered forward-looking information

under the federal securities laws.  This information may contain words such as “believes,” “plans,” “expects,” “intends,” “estimates”

or similar expressions.

This information is not a guarantee of the Company’s future performance and is subject to risks, uncertainties and other

important factors that could cause the Company’s actual performance or achievements to differ materially from those expressed or

implied by this forward-looking information and include, without limitation, changes in the market value and yield of our assets,

changes in interest rates and the yield curve, net interest margin, return on equity, availability and terms of financing and hedging

and various other risks and uncertainties related to our business and the economy, some of which are described in our filings with

the SEC.  Given these uncertainties, you should not rely on forward-looking information.  The Company undertakes no obligations

to update any forward-looking information, whether as a result of new information, future events or otherwise.

2

CYS Overview

Focus on Cost

Efficiency

Objective

Target Assets

Senior Management

Agency Residential Mortgage Backed Securities

A Real Estate Investment Trust formed in January 2006

Kevin Grant, CEO, President, Chairman

Frances Spark, CFO

Pay dividends and achieve capital appreciation throughout changing interest rate

and credit cycles

Be the most efficient Agency REIT in the market

Ample Financing

Sources

Currently

financing

lines

with

28

lenders

Swap agreements with 13 counterparties

Dividend Policy

Company

intends

to

distribute

all

or

substantially

all

of

its

REIT

taxable

income

Scaled Management Fee: 1.0% to 1.5%

No Incentive Fee

Attractive Environment Likely to Persist

Source:   Bloomberg.

(1) As of November 29, 2010

5/1

Hybrid

Net

Interest

Margin:

1/05

–

11/10

11/26/10

5

Year

Swap

vs

1

Month

LIBOR:

1/05

–

11/10

11/26/10

Mortgage Yields Currently Attractive

Par-Priced

5/1

hybrid

rates

now

3.05

(1)

30

Year

fixed

rates

now

3.84%

(1)

15 Year fixed rates now 3.28%

(1)

Hedging rates at all-time lows

Steep Curve

Creates significant positive carry

Significant ROE

Hedge flexibility very important

Fed fighting deflation

3

Wide Spreads Create Good Environment

Source:   Bloomberg.

Note:

Spreads

calculated

as:

(i)

5/1

Hybrids

Index

–

50/50

3-Year

Swaps/LIBOR,

and

(ii)

5/1

Hybrids

Index

–

1-Month

LIBOR

Index.

5/1

Hybrids

Hedged

with

Swaps:

1/05

–

11/10

Hedged Hybrids

(i)

Unhedged

Hybrids

(ii)

11/26/10

CYS

Investment Strategy

Simple ‘Carry Trade’

Borrow Short/Lend Long

4

5

10 Year Treasury Note Auctions

11/98 –

10/10

Treasury Auction Volume

2 Year Treasury Note Auctions

2/00 –

10/10

3 Year Treasury Note Auctions

10/00 –

10/10

Source: Bloomberg, US Treasury

5 Year Treasury Note Auctions

2/00 –

10/10

7 Year Treasury Note Auctions

2/00 –

10/10

30 Year Treasury Note Auctions

2/00–

10/10

?

Hawkish

Dovish

Neutral

Hoenig

Bullard

Plosser

Fisher

Lacker

Duke

Tarullo

Evans

Dudley

Pianalto

Warsh

Kohn

Kocherlakota

Lockhart

Pianalto

Yellen

Rosengren

Raskin

Bernanke

Obama

Nominee

Governors

2010 Voters

2011 Voters

2012 Voters

Sources: Macroeconomic Advisers, LLC,  Bank of America Merrill Lynch, Bloomberg, Wall Street Journal, Indiana University,  Marketwatch, Thomson Reuters, Federal Reserve Bank of

Atlanta, Federal Reserve Bank of Chicago, Federal Reserve Bank of Cleveland, Maryland Consumer Rights Coalition, Boston Globe, Businessweek, Newsweek, Washington Post, CNBC.

Fed Board has Become More Dovish

Diamond

6

7

S&P/Case-Shiller

U.S.

National

Home

Price

Indices

1988 –

Present

% Change -

Year to Year

Capacity Utilization: Manufacturing

1968 –

Present

%

Unemployment Rate

1940-present

%

Economic Recovery Below Normal Pace

Source: S&P, Fiserv, and Macromarkets LLC / Haver Analytics, BLS

8

15 Year MBS Exhibit Superior Stability

Projected Average Life

Slow Prepay

Environment

(years)

Fast Prepay

Environment

(years)

30 year Fixed

9.18

3.45

5/1 Hybrid

9.18

3.45

15 Year

4.08

2.72

9

Source: Bloomberg, Bank of America

Loan size: $280k (30 Year), $275k (Hybrid), and  $226k (15 Year)

Homeowner Savings

15 Year Mortgages Exhibit Low Prepayment Volatility

Security

Original Rate

Current

Environment

Current

Payment

New

Payment

Monthly

Savings

30 Year 5%

5.50%

4.25

1,589

1,377

212

5 x 1 Hybrid ARM

5.125%

3.50

1,497

1,234

263

15 Year 4.5%

5.00%

3.5

1,787

1,615

172

Refi Incentive

Example: 15 yr 3 ½% drop = 10/32 pt per month

1

10/32

represents

a

discount

to

the

purchase

price

of

the

security

of

approximately

$0.31

per

month

from

trade

date

to

settlement

date.

Source: Bloomberg 11/29/10

Economics of Forward Purchase

10

1

11

Portfolio Composition and Results

CYS

Dividends:

10/2009

–

10/2010

CYS Agency RMBS Portfolio

1

Total Agency RMBS: $4,537.1 million

Hybrid Arms,

45.4%

15 Year Fixed,

39.0%

20 year Fixed,

15.0%

30 Year Fixed,

0.6%

1)

As of September 30, 2010

12

History of Transparent and

Consistent Financial Reporting

CYS uses Financial Reporting for Investment Companies

CYS financial reporting –

Best in Class

Schedule of investments

NAVs

have reflected mark-to-market accounting since inception

No OCI account on balance sheet

Realized and unrealized losses taken through income statement

Losses expensed in period incurred

13

9/30/2010

6/30/2010

Income Statement Data (in 000's)

Investment Income –

Interest Income

$16,311.4

$17,265.3

Total expenses

3,826.0

3,167.1

Net Investment Income

12,485.4

14,098.2

Net gain (loss) from investments

28,576.0

32,367.7

Net gain (loss) from swap and cap contracts

(39,152.2)

(18,860.4)

Net Income (Loss)

$1,909.2

$27,605.5

Net Income (Loss) Per Common Share (diluted)

$0.05

$1.46

Distributions per Common Share

$0.60

$0.60

Non-GAAP Measure (in 000's)

Core Earnings (1)

$7,676.7

$10,960.3

Non-GAAP Reconciliation (in 000's)

NET INCOME

$1,909.2

$27,605.5

Net (gain) loss from investments

($28,576.0)

($32,367.7)

Net (gain) loss on termination of swap contracts

$6,292.2

$17,205.5

Net unrealized (appreciation) depreciation on swap and cap contracts

$28,051.3

($1,483.0)

Core Earnings

$7,676.7

$10,960.3

Key Portfolio Statistics

Average Yield on Agency RMBS (2)

3.58%

3.98%

Average Cost of Funds & Hedge (3)

1.67%

1.15%

Interest Rate Spread Net of Hedge (4)

1.91%

2.83%

Leverage Ratio (at period end) (5)

7.5:1

5.3:1

Balance Sheet Data (in 000's)

9/30/2010

6/30/2010

Cash and Cash Equivalents

$2,101.4

$140,625.1

Total Assets

$4,754,162.1

$2,447,676.9

Repurchase Agreements

$1,498,705.3

$1,447,600.1

Net assets

$559,714.1

$390,551.8

Net assets per common share

$12.53

$13.15

Quarter Ended

As of

Historical Financials

(1)

Net

income

excluding

net

realized

gain

(loss)

on

investments

and

swap

contracts

and

net

unrealized

appreciation

(depreciation)

on

investments

and

swap

and

cap

contracts.

(2)

Calculated

by

dividing

total

interest

income

from

Agency

RMBS

by

average

Agency

RMBS.

(3)

Calculated by dividing total interest expense, including net swap and cap interest income (expense) by average repurchase agreements.

(4)

Calculated by subtracting average cost of funds & hedge from average yield on Agency RMBS.

(5)

Calculated by dividing total liabilities by net assets.

14

Financial Highlights

Steep yield curve and attractive spreads in target assets

Tailwinds likely to continue

Investment Company accounting provides transparency

Kevin E. Grant, CFA

President & CEO

Investment Outlook

November, 2010