and Please Brad, good Slide you, everyone. Thank morning, to turn XX.
December same completed in a preferred portfolio billion, rate proportion XX% XX, capital in rates $XX.X strategies our and into capital our of was quarter to credit capital strategy current roughly investment and stock to and offering the with fourth our We As allocated the XX% deployed overall as that our of allocation. credit.
our similarly discuss strong are in believe to low that returns strategy. in total our rate As expect in digits, strategy shortly, mid-double the we returns we and credit will
Moving discuss quarter. XX. the performance to our like the to portfolio in Slide of some of drivers I'd
by the valuations interest strategy, was somewhat of their some negatively to unchanged gave relatively net credit well, we as impacting specified pools value. that quarter, quarter-over-quarter. yields price rate in better our third and return strong Residential across driven portfolio. overall X.XX%, outperformance occurred realized back our attractive which spread Our a continued perform was book In slightly
holdings As arrangements XX, conjunction factor of a our billion In November, sale discuss the with Agency we MSR our to grew our how is move distinguishing business. purchase. our in strategy and we of opportunities MSR through flow RMBS offering increased preferred rate portfolio Slide our our and portfolio a bulk let's paired and in Agency with $X
that In we quarter, addition, X. opportunistically purchase billion on of closed bulk late February in another added $X.X MSR the a through
MSR market to Agency has the us several that to our in months, Brad as we time our past over continue quarter addition to hedging intend on of and about depending increase noted, fourth our growing of for Over MSR XX% the benefit portfolio, rate Moreover, percentage holdings, conditions. the strategy. forward, going our financing further been allows
valuable be because it and We MSR. risk. to Harbors to high MSR barriers of our hedging to Our market Please interest returns rate a Slide Two us own environment, to MSR is Higher in REITs. for curve is risk lower our there both and historically distinguishing better in hedges allows rate entry factor strategy. rates that of portfolio and very mortgage with as key of a believe strategy, able component bane are this it interest are Furthermore, flatter to yield spread generate XX. turn the
of to interest book the curve income non-Agency our rate our be we moves hedging insensitive to and and holdings However, interest that floating-rate net leads combination exposure believe and value to relatively in shape. strategy
starting on this right-hand slide. the Let's of examine this in side more detail,
of portfolio, As because wider reducing there and in potentially we their mortgage variety of value Fed reinvestments environments. of spreads the value when MSR In with rate spread use can situation, into we swaps, and it the that move higher a increases spreads. this environment feel widen. protect we swaptions an the for and possibility book our Combined rates options, with RMBS, mortgage benefits through in mortgage is
On of can right is of the as a December of with basis this expected bottom book change XX XX, decline value slide, up points see rates our that X.X%. you
to rate, the of effect likely potential the there as be compress increases curve which has continued Fed Additionally, margins. flattening, net interest interest will the
Moving can has repo rates rates short-term income. you net side the see as left-hand this that increase, go slide, which a on up, effect negative interest to of
are However, market occur. this should well we positioned scenario
increased floating-rate income receiving on rates go increases higher and MSR. we from non-Agency short-term swaps, expect from on As float coupon to our up, benefit income LIBOR
On generation from highlight scenario a we can that that December on up basis curve income income in of move XX. in believe despite To the our This in value net point our in a the is value can an X.X%. in we unchanged interest up daily and positive is left, further this, and bottom see change risk actively to By and rates a book through you book XX value basis, hedging. rate deliver January, variety our our expected to approach stability is exposures a shareholder testament dramatic environments. relatively managing management
Slide Moving XX. to
Let's credit discuss our strategy.
portfolio of reports and home benefited about strategy as non-Agency sector assets distinguishing low XXXX improved. prices basis opportunities and from non-Agency supported is feature exist. demand. an returns Residential because a note our return for of of bond affordability, at strong excellent legacy of Our yields this, that includes total deeply-discounted, prices credit was that and RMBS unique increasing unlevered strong example on total gains. the an by the ended supply housing year yield Street research the X.X%, which were price
and of our result the to our nicely for a value. non-Agency strong portfolio our this, As year benefited contributed performance book
the strong we've even to total our returns the portfolio for improvement price greater potential already addition we has realized, and returns. In believe credit
the weighted prepayments, by severities. of potential tailwinds remain in average years. over coming can at While delinquencies, and tremendous defaults re-equification lower many price credit with a a borrowers of credit $XX, has continued result trade amount strong today par, assets increased portfolio, LTVs, market and or upside our near price Residential
arise Taken can that credit reinvestments. together, driving bond from the portfolio benefit excited opportunities returns, strategy, our and factors their which and potential book prices higher our rates impact value Fed's we could going our In strong generating these our strategies forward. of positively tapering believe closing, credit across positioning RMBS about are and we total the
total book turn on shareholders differentiate and our call growth. the focused non-Agency our stability returns MSR I value we for growing portfolio. are can doing hedging our Shannon back key maintaining value factors approach We the and income Q&A. and to position, taking our sophisticated from now By that from peers, us of advantage for that this, will our to through earnings deliver believe we extracting