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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Wasatch Hoisington US Treasury Fund 2025 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Wasatch Hoisington US Treasury Fund)

Primary Source Intelligence • Q1 2025 Letter Analysis

Wasatch Hoisington US Treasury Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Wasatch Hoisington US Treasury Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+0.04%

Annualized-3.08%

Positioning StanceConstructive

GeographyUS

Digest Analysis

Quick Take

"Five economic forces are converging to create recession risk above 50%: recessionary tariff effects, restrictive Fed policy, fiscal restraint, unprecedented 123.6% debt-to-GDP ratio, and reduced immigration."

Executive Summary

The Wasatch Hoisington U.S. Treasury Fund returned 4.01% in Q1 2025, outperforming the Bloomberg Aggregate Index by 123 basis points as thirty-year Treasury yields fell from 4.78% to 4.61%. The managers identify five converging forces creating recessionary conditions: tariffs that will reduce trade and capital flows, restrictive Fed policy requiring reversal for 2026 recovery, fiscal restraint from spending cuts and negative multipliers, unprecedented debt levels at 123.6% of GDP that drain economic activity, and reduced immigration creating demographic headwinds. Historical analysis shows tariffs are recessionary, particularly when combined with monetary contraction, as seen in the 1930s. The fund estimates recession risk above 50% with a fitful recovery ahead. Government debt exceeds the 90% threshold where economies lose one-third of trend growth, while interest expenses continue rising as a percentage of GDP. The portfolio remains strategically positioned in long-term Treasuries to benefit from this uncertain economic environment and potential Fed policy reversal.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

78%

CautiousHigh

High Conviction (78%)

The managers demonstrate high conviction through concentrated Treasury positioning with specific holdings named and sized (99.2% in top 6 positions). They provide detailed historical analysis, specific recession probability estimates above 50%, and clear falsifiable catalysts with timeframes for Fed policy reversal.

Growth Outlook

13%

BearishBullish

Bearish (13%)

The managers explicitly state recession risk is higher than 50/50 and describe the transition to recovery as fitful, uncertain and labored. They identify five converging recessionary forces and warn of severe economic implications from current policies.

Risk Appetite

38%

DefensiveAggressive

Defensive (38%)

The fund maintains strategic positioning in long-term Treasury bonds, which represents a defensive posture. While not maximum defensive, the concentration in Treasuries reflects risk-off positioning relative to equity markets.

Capital Deployment

0%

De-riskingDeploying

De-risking (0%)

No evidence of cash level changes or new deployment activity. The fund maintains its strategic Treasury positioning without indication of material portfolio changes or cash deployment during the quarter.

Forward Guidance

25%

CautiousExpansionary

Cautious (25%)

The managers explicitly state they are waiting for conditions to change, noting that a significant Fed policy reversal is necessary for economic acceleration in 2026. They are positioned defensively and not deploying into risk assets.

Language Signal

20%

BearishBullish

Bearish (20%)

The letter is dominated by risk language including recession, severe implications, economic restraint, debt overhang, and recessionary effects. While they see opportunity in Treasuries, the overall directional language is heavily bearish on the economy.

Perceived Risk

82%

Low RiskElevated

Elevated Risk (82%)

The managers identify multiple systemic risks including recession probability above 50%, unprecedented debt levels, tariff-induced trade wars, and Fed policy errors. They provide detailed historical analysis of similar periods and warn of severe economic implications.

Opportunity Density

25%

ScarceAbundant

Scarce (25%)

The managers see limited opportunities, focusing exclusively on long-term Treasuries while describing a challenging economic environment. They characterize the recovery as fitful and uncertain, suggesting few attractive alternatives to their defensive positioning.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The managers discuss multi-year themes with recovery not expected until 2026 and describe holding through economic cycles. Their Treasury strategy is positioned for an extended period of economic uncertainty, though they do reference specific timeframes for Fed policy changes.