ANCHOR QUESTION OFF-CAMERA (ENGLISH) SAYING:

Let's get right to your fund, and I want to start with the duration of your holdings because it's interesting when we look at the way you view duration compared to the Barclays US Aggregate Bond Index. You've got about, on average, 1.3 years in your duration.

TOM ATTEBERRY, PORTFOLIO MANAGER, FPA FUNDS (ENGLISH) SAYING:

Yes.

ANCHOR QUESTION OFF-CAMERA (ENGLISH) SAYING:

The index has about a 5-year average. Right. So tell me what you're thinking about in the way that you strategize your fund.

TOM ATTEBERRY, PORTFOLIO MANAGER, FPA FUNDS (ENGLISH) SAYING:

What we're looking for- we've got a couple of objectives we're trying to reach, and so duration plays a major role in achieving that. The first one is we're looking for a positive absolute return in a 12-month period. So we're always looking to stress test the portfolio sort of to the what if the bad things happen, you know, interest rates rise. And we know that if we look at it as a general guideline- alright, if things rise by 100 basis points in a 12-month period, will we still have a positive return? And that goes a long way to driving that duration number that we have and why ours is, like you said, roughly a 1.3-year and you look at a Barclays Aggregate Index, it's somewhat over five.

ANCHOR QUESTION OFF-CAMERA (ENGLISH) SAYING:

In terms of your actual holdings, about 45% in mortgage-backed securities, what's the investment thesis with MBS right now? Where are the opportunities? And what is it about that space that you're gravitating to?

TOM ATTEBERRY, PORTFOLIO MANAGER, FPA FUNDS (ENGLISH) SAYING:

There's becoming- and honestly, there's becoming less interest in it as finding opportunities. We've actually been reducing the single-family mortgage side. But we still find pockets of opportunity. And what we found pockets of opportunity- the biggest one is there's a program out there that's- the relocation mortgages. So these are individuals, families that they work for a corporation, they're maybe an officer in the military- they're going to go get stationed and moved to some location for three to five years. And the program, whether it's the military or whether it's a corporation, they'll put a relocation package together, pay for you to move, help you find a house, arrange for the mortgage - all those sorts of issues. Well, it's a 30-year fixed rate mortgage. But the person is really only going to be in home for three to five years. Right. So you find that it's actually a fairly short average life because you realize they're going to get moved to some other location. We sort of joking about it, sort of like Procter & Gamble executives. Having lived in Cincinnati for a while, I knew quite a few who would be in town for about three to five years and then they would leave. So that's been what place that we've been able to find an opportunity and create something in the mortgage that has a shorter duration, but it's a unique opportunity.