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Wednesday, June 25, 2025
 

MANAGING DIRECTOR:
Scott Carrithers
 
PORTFOLIO SALES AND SERVICE:
Chris Thompson • Sean Doherty • Mark Tranckino • Brian Schaff
Natalie Regan • Aaron Stoffer • David Farris • Jeff Macy 
Josh Kiefer • Todd Czinege • Trey Valentine • Cody Kreutziger

US Treasury Market
Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
06/18/25 4.18 4.33 4.30 4.09 3.94 3.90 4.00 4.18 4.39 4.91 4.89
06/19/25 Bank  Holiday
06/20/25 4.16 4.31 4.32 4.07 3.91 3.86 3.96 4.16 4.38 4.90 4.89
06/23/25 4.13 4.27 4.25 4.02 3.86 3.81 3.91 4.11 4.35 4.88 4.88
06/24/25 4.11 4.27 4.24 4.02 3.83 3.76 3.87 4.06 4.30 4.84 4.84

The data in the table above is static as of the time it was pulled, so rates may have changed. Treat all data in this table and PMR as indications only and availability is always subject to change. This information was pulled manually from sources we believe to be reliable. New source, as of 12/12/2022, Bloomberg, L.L.P.  As of: close of business 6/24/2025.
                                                                                                                                                                                      


You’ll Be Gladder with a Bond Ladder 

Bond laddering is one of the most fundamental and time-tested fixed income strategies available. The concept is simple: establish a portfolio of bonds maturing at regular intervals. Although laddering is simple to understand and easy to implement, it is not inferior to more complex strategies. Today’s PMR will highlight the merits of a plain vanilla Treasury ladder.

Consider the following mock strategy: a five-year Treasury ladder maintained by purchasing $1,000,000 par of the five-year note on the first day of every quarter as the shortest rung of the ladder matures. Had this strategy been strictly implemented roughly five years ago, the current portfolio would look like this: 
 
 
A simple way to evaluate the performance of this mock portfolio is to compare it to the banking industry’s investments as a whole. According to March 31 call report data, the weighted average yield on all US banks’ securities was 3.24%, and the total appreciation or depreciation was -7.20% of book value.

So, the Treasury ladder gives up 51 basis points of nominal yield, but is over 6.5 points less underwater. 51 basis points is a small price to pay for the liquidity that comes with having such smaller losses.

Last Wednesday’s edition preached on the importance of diversification. Today’s writing doesn’t seek to contradict that by suggesting a 100% allocation to Treasuries. Rather, a suggestion might be to pick a percentage of the portfolio and build up a similar ladder over time. For what it is worth, portfolios performing in the 90th percentile of banks on the Bancpath system average 25% Treasuries.

As always, thank you for being a dedicated reader of the Portfolio Manager’s Report and reach out if we can be of any assistance. 


This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.

•Not FDIC Insured •No Bank Guarantee •May Lose Value