The Wasatch-Hoisington U.S. Treasury Fund demonstrated strong performance in the third quarter of 2025, achieving a 2.34% return, which notably outpaced the Bloomberg US Aggregate Bond Index's 2.03% gain. This performance highlights a significant trend in the bond market, particularly concerning U.S. Treasury investments. Amidst this financial backdrop, a critical observation emerges regarding global industrial activity: plant capacity utilization has experienced a further decline this year across major economies, including the United States, the European Union, and China, challenging prevailing economic narratives. Concurrently, the burgeoning expansion of artificial intelligence (AI) related industries is profoundly impacting productivity within digital sectors. This technological shift is reallocating demand away from conventional, capital-intensive manufacturing processes, favoring more agile and digitally-driven production methods. This confluence of bond market outperformance, declining industrial capacity utilization, and AI-driven productivity gains points to an evolving economic landscape that warrants close attention from investors and policymakers alike.
The Wasatch-Hoisington U.S. Treasury Fund's performance in the third quarter of 2025 serves as a compelling case study in a rapidly changing global economy. While many investors might have anticipated a different outcome based on conventional wisdom, the fund's 2.34% return exceeded expectations, especially when compared to the Bloomberg US Aggregate Bond Index. This success can be attributed to a nuanced understanding of underlying economic shifts, particularly the unexpected decline in plant capacity utilization across the world's leading economies. This decline, observed in the U.S., the European Union, and China, suggests a broader trend of industrial restructuring and a potential reevaluation of traditional growth indicators.
A significant factor contributing to this shifting economic paradigm is the rapid advancement and expansion of artificial intelligence. AI-related industries are not merely growing; they are fundamentally transforming productivity, especially within digital sectors. This transformation is characterized by a strategic redirection of demand from older, capital-intensive production models to newer, more efficient digital methods. As AI technologies become more integrated into various industries, they offer enhanced efficiency and innovation, prompting a move away from large-scale physical infrastructure towards more adaptable, technology-driven solutions.
This reorientation has profound implications for investment strategies. The outperformance of the Treasury Fund, coupled with the insights into declining plant capacity and the rise of AI, underscores the importance of adaptive investment approaches. Investors are increasingly looking towards assets that are resilient to traditional industrial cycles and can capitalize on the opportunities presented by technological disruption. The data suggests a future where economic value creation is less dependent on physical manufacturing output and more on intellectual capital and digital innovation.
The observed trends provide a fresh perspective on economic indicators, challenging the conventional reliance on metrics like industrial capacity utilization alone. Instead, the focus is shifting towards understanding how technological advancements, particularly in AI, are reshaping global productivity and economic structures. This requires a deeper analysis of how different sectors are adapting to digital transformation and how these changes translate into financial performance and broader economic stability. The success of funds like Wasatch-Hoisington's Treasury Fund in this environment points to a new era of investment, where agility and foresight in anticipating technological shifts are paramount.
In summary, the third quarter of 2025 showcased a notable triumph for the Wasatch-Hoisington U.S. Treasury Fund, achieving a robust 2.34% return that surpassed the broader bond market index. This period also highlighted an ongoing decrease in global industrial capacity utilization, particularly across key economic regions, indicating a departure from traditional manufacturing-led growth. Furthermore, the accelerating influence of artificial intelligence is fundamentally altering economic productivity, channeling investment and demand toward digital innovation rather than conventional industrial expansion. These developments collectively signal a transformative era where financial markets and global industries are increasingly shaped by technological progress and evolving economic dynamics, urging a re-evaluation of established investment principles.