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Home » Investments » Separately Managed Accounts » Thornburg Limited Term U.S. Government SMA
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Thornburg Limited Term U.S. Government SMA

Strategy Overview
The Limited Term U.S. Government Strategy employs an actively managed approach to build a portfolio of high quality short/intermediate-term obligations issued by the U.S. government, its agencies or instrumentalities with an average maturity of five years or less. The strategy seeks to provide income consistent with the preservation of capital and lower volatility relative to core bond strategies.
Strategy Inception Date
1 Mar 1988

Portfolio Managers

Lon Erickson, CFA
Portfolio Manager and Managing Director
Christian Hoffmann, CFA
Head of Fixed Income and Managing Director
OverviewKey FactsPerformanceCharacteristicsPortfolioPortfolio ManagersLiterature
Overview

Overview

Why Invest in This Strategy?

  • Actively managed portfolio of high-quality short- to intermediate-term obligations issued by the U.S. government, designed to exhibit low or negative correlation to equities and low share price volatility.
  • Proven bottom-up fundamental approach focused on investing in short- to intermediate-term obligations issued by the U.S. government and its agencies with an average maturity of five years or less.
  • Stability-seeking strategy that looks to provide U.S. government–guaranteed cash flows with low interest-rate exposure and relative stability.

Related Content

Outlook
Mid-Year Fixed Income Outlook: Uncertainty Yields Tight Credit Spreads
Fixed Income
Investor Update: A Potential Reprieve for the Municipal Bond Tax Exemption
Markets & Economy
Fixed Income: Finding Income and Playing Defense Through Volatility
Key Facts

Key Facts

(As of 30 Jun 2025)
Benchmark
Bloomberg U.S. Government Intermediate Index
Number of Holdings
143
Performance

Performance

Returns

(As of 30 Jun 2025)
Annualized Returns
YTD
1y
3y
5y
10y
Inception
Thornburg Limited Term U.S. Government Strategy - Gross (%)
4.27
6.87
3.43
0.91
1.83
4.92
Thornburg Limited Term U.S. Government Strategy - Net (%)
4.08
6.48
3.04
0.53
1.45
4.15
Bloomberg U.S. Government Intermediate Index (%)
3.97
6.26
2.85
0.15
1.55
4.61
YTD
1y
3y
5y
10y
Inception
Thornburg Limited Term U.S. Government Strategy - Gross (%)
4.27
6.87
3.43
0.91
1.83
4.92
Thornburg Limited Term U.S. Government Strategy - Net (%)
4.08
6.48
3.04
0.53
1.45
4.15
Bloomberg U.S. Government Intermediate Index (%)
3.97
6.26
2.85
0.15
1.55
4.61
2019
2020
2021
2022
2023
2024
Thornburg Limited Term U.S. Government Strategy - Gross (%)
4.55
4.69
-0.99
-7.21
4.91
3.32
Thornburg Limited Term U.S. Government Strategy - Net (%)
4.16
4.31
-1.35
-7.57
4.52
2.94
Bloomberg U.S. Government Intermediate Index (%)
5.20
5.73
-1.69
-7.73
4.30
2.44

Total return (net and gross) is based on composite performance.

Periods less than one year are not annualized.

In US$ terms. Returns may increase or decrease as a result of currency fluctuations.

Performance data for the Limited Term U.S. Government Strategy is from the Limited Term U.S. Government Composite, inception date of 1 March 1988. The Limited Term U.S. Government Composite includes all discretionary non-wrap accounts invested in the Limited Term U.S. Government Strategy. Returns are calculated using a time-weighted and asset-weighted calculation. Returns reflect the reinvestment of income and capital gains. Periods less than one year are not annualized. Individual account performance will vary. The performance data quoted represents past performance; it does not guarantee future results. Gross of fee returns are net of transaction costs. Net of fee returns are net of transaction costs and investment advisory fees. For periods prior to 2011, net returns for some accounts in the composite also reflect the deduction of administrative expenses. Thornburg Investment Management Inc.'s fee schedule is detailed in Part 2A of its ADV brochure. Performance results of the firm's clients will be reduced by the firm's management fees. For example, an account with a compounded annual total return of 10% would have increased by 159% over ten years. Assuming an annual management fee of 0.75%, this increase would be 142%.

Characteristics

Characteristics

Portfolio

(As of 30 Jun 2025)
Portfolio
Benchmark
Effective Duration
4.6 Yrs
3.5 Yrs
Average Effective Maturity
5.8 Yrs
3.9 Yrs
Portfolio
Benchmark
Weighted Average Coupon
2.8%
3.2%
Weighted Average Price
$92.20
—

Data based on representative account.

Portfolio

Portfolio

Top Holdings

(As of 31 May 2025)
Name
Ticker/Symbol
Weight %
United States Treasury Inflation Indexed Bonds
91282CDX6
6.3
Fannie Mae Pool
3140XMZX7
5.0
FARM 21-1 Mortgage Trust
30768WAA6
2.8
Caledonia Generating, LLC
129268AB4
2.6
United States Treasury Note/Bond
91282CNC1
2.5
Fannie Mae Pool
31418D2Y7
2.0
Freddie Mac Seasoned Credit Risk Transfer Trust 2017-4
35563PDD8
1.9
Fannie Mae Pool
3140XGAS8
1.9
United States Treasury Note/Bond
91282CDY4
1.6
United States Treasury Note/Bond
91282CGB1
1.5
Download Holdings

Data based on representative account.

Exposure Breakdown

Exposure Breakdown

(As of 30 Jun 2025)
Sector
Sector Allocation
Portfolio (%)
Benchmark (%)

Portfolio

Benchmark

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mortgage Passthrough
35.1
—
Collateralized Mortgage Obligation
27.4
—
Treasury-Domestic
19.5
98.4
Asset Backed Securities
4.6
—
Commercial Mortgage Backed Security
4.4
—
Agency Debenture
4.1
1.6
Cash & Cash Equivalents
3.0
—
Corporate
1.8
—
Sector Allocation
Portfolio (%)
Mortgage Passthrough
35.1
Collateralized Mortgage Obligation
27.4
Treasury-Domestic
19.5
Asset Backed Securities
4.6
Commercial Mortgage Backed Security
4.4
Agency Debenture
4.1
Cash & Cash Equivalents
3.0
Corporate
1.8
Credit Quality
Portfolio (%)
Benchmark (%)

Portfolio

Benchmark

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
U.S. Government
97.0
100.0
Cash & Cash Equivalents
3.0
—
Credit Quality
Portfolio (%)
U.S. Government
97.0
Cash & Cash Equivalents
3.0
Maturity
Portfolio (%)
Benchmark (%)

Portfolio

Benchmark

0%
5%
10%
15%
20%
25%
30%
Year 1
2.1
1.9
Year 2
5.1
23.5
Year 3
11.0
18.6
Year 4
11.1
14.6
Year 5
20.7
13.4
Year 6
0.9
8.2
Year 7
10.7
8.1
Year 8
4.3
3.6
Year 9
6.3
4.4
Year 10+
24.8
3.8
Cash
3.0
—
Maturity
Portfolio (%)
Year 1
2.1
Year 2
5.1
Year 3
11.0
Year 4
11.1
Year 5
20.7
Year 6
0.9
Year 7
10.7
Year 8
4.3
Year 9
6.3
Year 10+
24.8
Cash
3.0

Data based on representative account.

Percentages may not add up to 100 due to rounding.

Cash includes cash equivalents. Weight percentages are of the total portfolio unless otherwise noted.

Credit quality ratings use the highest rating available from either S&P Global Ratings or Moody's Investors Service. Unrated securities are evaluated by the firm using available data and their own analysis that may be similar to that of a nationally recognized rating agency; however, such determination is not equivalent to a national agency credit rating. "NR" = Not Rated.

Portfolio Managers

Portfolio Managers

Lon Erickson, CFA

Lon Erickson, CFA

Portfolio Manager and Managing Director
Lon Erickson is a portfolio manager for Thornburg Investment Management. He joined Thornburg in 2008 and was named a managing director and was promoted to portfolio manager in 2010. Prior to joining Thornburg Investment Management, Lon spent almost 11 years as an analyst for State Farm Insurance in the equity and corporate bond departments. Lon earned a bachelor’s degree in…
Learn More
Christian Hoffmann, CFA

Christian Hoffmann, CFA

Head of Fixed Income and Managing Director
Christian Hoffmann is head of fixed income and a portfolio manager for Thornburg Investment Management. He joined the firm in 2012 as a fixed income analyst and was promoted to associate portfolio manager in 2014. Christian was named a managing director in 2017, was promoted to portfolio manager in 2018, and to head of fixed income in 2024. Prior to…
Learn More

Literature

Fact Sheet
Commentary

Important Information

Source: FactSet and Thornburg.

Cash may also include cash equivalents and currency forwards.

Investments in the Strategy carry risks, including possible loss of principal. Carefully consider the Strategy's investment objectives, risks, and expenses before investing. There is no guarantee that the portfolio will meet its investment objectives.

Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Portfolio characteristics are derived using currently available data from independent research resources that are believed to be accurate. Portfolio attributes can and do vary.

Portfolios invested in a limited number of holdings may expose an investor to greater volatility.

Portfolio holdings and characteristics shown herein are from a representative account managed within the investment composite. The representative account is selected based on account characteristics that Thornburg believes accurately represent the investment strategy as a whole. Should these characteristics change materially, Thornburg may select a different representative account. Holdings may change daily and may vary among accounts, which may contribute to different investment results. The representative account information is supplemental to the strategy's composite and GIPS compliant presentation.

The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed herein will remain in an account's portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed may not represent an account's entire portfolio and in the aggregate may represent only a small percentage of an account's portfolio holdings. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.

Weight percentages are of the total portfolio unless otherwise noted.

Portfolio construction will have significant differences from that of a benchmark index in terms of security holdings, industry weightings, asset allocations and number of positions held, all of which may contribute to performance, characteristics and volatility differences. The index shown is unmanaged, reflect total returns and assume the reinvestment of all income in U.S. dollars. It does not reflect any management fees or brokerage expenses associated with a portfolio’s returns. Returns for an actual portfolio may differ from those of an index due to (among other things) differences in timing and the amount invested and fees and expenses. Investors may not make direct investments into any index.

Please see our glossary for a definition of terms.

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