US Treasury Portfolio Report

Schwab Market Value

$58.66M

Face: $61.30M | 53 positions, 5 accounts

HSBC Market Value

$5.28M

Face: $5.48M | 14 positions, 2 accounts

Combined Portfolio

$63.94M

Face: $66.78M | 67 total positions

Annual Income

$2.84M

$236,446/month coupon income

Unrealized G/L

-$1.80M

Schwab -$1.74M | HSBC -$59K

10Y Yield

4.34%

+24bp over past month

🏦 Account Breakdown (Schwab - April 2, 2026)

Account	Market Value	Unrealized G/L	% G/L	Positions	Annual Income
ESP Apartments LLC	$31,052,406	-$1,226,404	-3.95%	25	$1,352,160
CBS Revocable Trust	$13,715,275	-$185,727	-1.35%	12	$613,234
Quarantine Tech	$11,546,504	-$310,613	-2.69%	11	$526,400
RAJR 2021	$1,433,688	-$17,780	-1.24%	2	$77,760
Carlos Blanco S.	$912,598	-$4,350	-0.48%	3	$39,180
SCHWAB TOTAL	$58,660,471	-$1,744,875	-2.97%	53	$2,608,734
HSBC — ESP Apartments	$2,459,713	-$819	-0.03%	9	$97,206
HSBC — CBS Trust	$2,820,037	-$58,264	-2.03%	5	$131,407
HSBC SUBTOTAL	$5,279,750	-$59,083	-1.11%	14	$228,613
GRAND TOTAL	$63,940,221	-$1,803,958	-2.82%	67	$2,837,347

🏦 HSBC Holdings Detail (March 31, 2026)

ESP Apartments LLC (JB6-004457) — MV $2,459,713

Security	Coupon	Maturity	Face	Market Value	UGL	Annual Income	Yield
UST Notes	3.500%	09/30/2027	$220,000	$218,918	-$1,472	$7,700	3.51%
UST Notes	3.625%	09/30/2030	$220,000	$217,294	-$3,714	$7,975	3.67%
UST Notes	3.875%	08/15/2033	$626,000	$614,826	+$25,297	$24,258	3.94%
UST Strip (Int)	0.000%	08/15/2033	$100,000	$73,451	+$2,513	—	—
UST Strip (Int)	0.000%	11/15/2033	$70,000	$50,803	-$977	—	—
UST Bonds	4.375%	05/15/2040	$615,000	$598,229	+$4,523	$26,906	4.49%
UST Strip (Prin)	0.000%	05/15/2043	$90,000	$38,732	-$5,184	—	—
UST Bonds	4.625%	05/15/2044	$354,000	$344,017	-$1,653	$16,373	4.75%
UST Bonds	4.625%	02/15/2055	$300,000	$286,911	-$20,151	$13,875	4.83%
ESP TOTAL			$2,595,000	$2,443,180	-$819	$97,086	—

+ Cash/Money Market: $16,533 | Total Account Value: $2,459,713 | Accrued Interest: $20,894

CBS Revocable Trust (JB6-004606) — MV $2,820,037

Security	Coupon	Maturity	Face	Market Value	UGL	Annual Income	Yield
UST Notes	4.500%	11/15/2033	$320,000	$326,774	+$5,192	$14,400	4.40%
UST Notes	4.250%	11/15/2034	$505,000	$505,157	+$12,036	$21,463	4.24%
UST Bonds	4.625%	11/15/2044	$957,000	$927,955	-$13,869	$44,261	4.76%
UST Bonds	4.625%	02/15/2055	$1,050,000	$1,004,189	-$60,059	$48,563	4.83%
UST Bonds	4.750%	02/15/2056	$50,000	$48,891	-$1,564	$2,375	4.85%
CBS TOTAL			$2,882,000	$2,812,965	-$58,264	$131,061	—

+ Cash/Money Market: $7,072 | Total Account Value: $2,820,037 | Accrued Interest: $36,293

HSBC Key Observations: ESP account is nearly flat (-$819, -0.03%) — well-timed purchases. CBS Trust shows -$58K loss primarily from the $1.05M 4.625% Feb 2055 bonds (-$60K) bought near par in Feb/Mar 2025. HSBC combined generates $228K/yr income on $5.28M — a 4.33% blended yield. The 3 Treasury STRIPS ($260K face) in ESP provide discounted zero-coupon exposure maturing 2033-2043.

📈 Yield Curve (April 3, 2026)

Tenor	Yield	vs 1 Month Ago	Portfolio Positioning
Fed Funds	3.75%	Flat	—
1Y	3.67%	-8bp	$5.4M maturing (6.5% coupon — above market!)
2Y	3.80%	-3bp	$6.3M in 1-3Y bucket
5Y	3.95%	+5bp	$0.4M (underweight)
7Y	4.13%	+3bp	Core intermediate allocation
10Y	4.34%	+24bp	$12.5M in 5-10Y
20Y	4.90%	+15bp	$18.1M in 10-20Y (largest bucket)
30Y	4.90%	+10bp	$15.4M in 20-30Y

Spreads: 2s10s +54bp | 10s30s +56bp | 2s30s +110bp (normal, positively sloped)

Key Insight: Yields rose +24bp on the 10Y over the past month, driven by strong jobs data (+178K vs 60K expected) and elevated oil prices ($109/bbl). However, the Fed at 3.75% with the 1Y at 3.67% signals the market still expects further easing. Your long-duration tilt benefits when cuts materialize.

📊 Maturity Ladder (Visual)

0-1Y (2026)

$5.4M (9%)

1-3Y (2027-28)

$6.3M (11%)

3-5Y (2029-30)

$0.4M

5-10Y (2031-35)

$12.5M (21%)

10-20Y (2036-44)

$18.1M (31%)

20-30Y (2045-56)

$15.4M (26%)

57.3% of portfolio is in 10Y+ bonds — this is the duration engine driving both income and rate-sensitivity.

💰 Coupon Income Schedule (Annual)

Account	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	TOTAL
ESP	$17.5K	$344.7K	$3.0K	—	$280.0K	$6.0K	$17.5K	$344.7K	$3.0K	—	$319.7K	$16.0K	$1,352K
Trust	$17.5K	$232.4K	$1.9K	—	$54.5K	$0.6K	$17.5K	$232.4K	$1.9K	—	$54.5K	—	$613K
Quarantine	$12.9K	$175.7K	$1.9K	—	$72.5K	$0.6K	$12.9K	$175.7K	$1.9K	—	$72.5K	—	$526K
RAJR	$8.3K	$30.6K	—	—	—	—	$8.3K	$30.6K	—	—	—	—	$78K
Carlos	—	$6.4K	—	—	$13.2K	—	—	$6.4K	—	—	$13.2K	—	$39K
TOTAL	$56.2K	$789.7K	$6.8K	—	$420.2K	$7.2K	$56.2K	$789.7K	$6.8K	—	$459.9K	$16.0K	$2,609K

Income Concentration: May ($789.7K) and November ($789.7K) are the big coupon months — together they deliver 61% of annual income. February ($459.9K) and August ($420.2K) are secondary peaks. Plan cash needs accordingly.

🚀 $7M Deployment Scenarios

Three strategies for deploying $7M in additional capital, optimized for maximum cash flow + equity buildup if rates decline:

🟢 Scenario A: Conservative (Income Maximizer)

Focus: Lock in highest current yields across 5-10Y sweet spot

Maturity	Allocation	Yield	Annual Income	Duration
2Y Notes	$1.4M (20%)	3.80%	$53,200	1.9 yrs
5Y Notes	$2.1M (30%)	3.95%	$82,950	4.5 yrs
7Y Notes	$1.4M (20%)	4.13%	$57,820	6.2 yrs
10Y Notes	$2.1M (30%)	4.34%	$91,140	8.1 yrs
TOTAL	$7.0M	4.07% avg	$285,110	5.1 yrs avg

Rate Sensitivity: If rates -100bp → +$358K MV gain | If rates +100bp → -$358K MV loss

🟡 Scenario B: Balanced Barbell (RECOMMENDED)

Focus: Short-end liquidity + ultra-long duration for max rate-drop upside

Maturity	Allocation	Yield	Annual Income	Duration
1-2Y Notes (short)	$2.8M (40%)	3.74%	$104,720	1.5 yrs
10Y Notes (core)	$1.4M (20%)	4.34%	$60,760	8.1 yrs
20-30Y Bonds (long)	$2.8M (40%)	4.90%	$137,200	18.5 yrs
TOTAL	$7.0M	4.32% avg	$302,680	9.2 yrs avg

Rate Sensitivity: If rates -100bp → +$644K MV gain | If rates +100bp → -$644K MV loss

✅ WHY BARBELL IS BEST: The short end (40% in 1-2Y) rolls off quickly, giving you reinvestment flexibility if rates change. The long end (40% in 20-30Y at 4.90%) locks in the highest yields available AND provides maximum price appreciation if the Fed cuts rates. The 10Y core (20%) anchors the middle. Net result: $302,680/year income PLUS potential $644K+ in capital gains if rates fall 100bp. The short end also provides $2.8M in near-term liquidity for opportunities.

🔴 Scenario C: Aggressive Duration (Rate Bet)

Focus: Maximum equity buildup potential if rates decline 100-200bp

Maturity	Allocation	Yield	Annual Income	Duration
10Y Notes	$2.1M (30%)	4.34%	$91,140	8.1 yrs
20Y Bonds	$2.1M (30%)	4.90%	$102,900	14.2 yrs
30Y Bonds	$2.8M (40%)	4.90%	$137,200	19.8 yrs
TOTAL	$7.0M	4.73% avg	$331,240	14.9 yrs avg

Rate Sensitivity: If rates -100bp → +$1.04M MV gain 💥 | If rates +100bp → -$1.04M MV loss ⚠️

Scenario Comparison Summary

Metric	A: Conservative	B: Barbell ⭐	C: Aggressive
Annual Income	$285,110	$302,680	$331,240
Monthly Income	$23,759	$25,223	$27,603
Avg Duration	5.1 yrs	9.2 yrs	14.9 yrs
If Rates -100bp	+$358K	+$644K	+$1,040K
If Rates -200bp	+$716K	+$1,288K	+$2,080K
If Rates +100bp	-$358K	-$644K	-$1,040K
Liquidity (1-2Y)	$1.4M	$2.8M	$0
Risk Level	Low	Medium	High

💵 Combined Portfolio (est) After $7M Deployment

Metric	Current Portfolio	+ $7M (Barbell)	Change
Total Market Value	$63.94M	$70.94M	+$7.0M
Annual Coupon Income	$2,837,347	$3,140,027	+$302,680
Monthly Income	$236,446	$261,669	+$25,223
Portfolio Yield	4.44%	4.43%	~flat
If Rates -100bp (MV gain)	+$7.0M	+$7.6M	+$644K
If Rates -200bp (MV gain)	+$14.0M	+$15.3M	+$1.3M

💡 The Big Picture: After deploying $7M via the Barbell strategy, your combined portfolio generates $261,669/month (~$3.14M/year) in Treasury coupon income alone. If the Fed cuts rates by 200bp over the next 18 months (market-implied probability ~35%), the portfolio would gain ~$15.3M in market value on top of the income. That is the asymmetric bet: you get PAID to wait for rates to fall.

⚠️ Risk Scenarios

Scenario	Probability	10Y Move	Portfolio Impact	Action
🟢 Rates -100bp (easing)	30%	4.34% → 3.34%	+$7.6M MV gain	Hold / trim ultra-longs above $92 TLT
🟡 Rates flat	35%	~4.34%	$0 MV change, collect $3.14M/yr	Hold and collect income
🟠 Rates +50bp	20%	4.34% → 4.84%	-$3.8M MV loss	Hold — paper loss recovers at maturity
🔴 Rates +100bp (inflation)	10%	4.34% → 5.34%	-$7.6M MV loss	Tax-loss harvest, hold for income
🟣 Recession (-200bp)	5%	4.34% → 2.34%	+$15.3M MV gain	Take profits on 30Y positions

Biggest Risk: Sustained inflation from oil ($109/bbl) + tariffs pushing 10Y above 5%. The portfolio would show -$7.6M in unrealized losses. However: (1) all bonds pay full face value at maturity, (2) coupon income of $3.14M/yr continues regardless, (3) tax-loss harvesting opportunity exceeds $1.8M already available.

✅ Action Recommendations

#	Action	Priority	Impact
1	Deploy $7M via Barbell: 40% in 1-2Y / 20% in 10Y / 40% in 30Y	🔴 HIGH	+$302,680/yr income + rate-drop upside
2	Plan Oct/Nov 2026 reinvestment: $5.4M rolling off (6.5% 11/26, 4.125% 10/26). Current 2Y yields at 3.80% — lock in 5Y or longer to avoid yield step-down	🔴 HIGH	Prevent $85K/yr income loss
3	Tax-loss harvest evaluation: $1.74M in unrealized losses available. ESP Apartments (-$1.23M) is the biggest candidate. Sell and rebuy similar maturities (different CUSIP) to crystalize losses	🟡 MED	$400-600K tax savings
4	Monitor oil/inflation: Oil at $109 and Middle East tensions could push yields higher near-term. If 10Y breaks 4.50%, consider adding to long-end positions	🟡 MED	Tactical entry point
5	HSBC consolidation: HSBC holds $5.28M across 2 accounts with -$59K UGL. Consider consolidating into Schwab for unified reporting and potentially better execution on future trades	🟢 LOW	Operational simplicity

🔄 Coupon Reinvestment Forecast: 3-Year & 5-Year Scenarios

Assumes every coupon payment is reinvested into US Treasuries at prevailing yields. Three rate scenarios modeled: rates flat, rates -100bp (easing), and rates +100bp (inflation). Starting portfolio: $63.94M market value, $2.84M/yr coupon income ($66.78M face).

📐 Assumptions

Base Case (Rates Flat): Coupons reinvested at 4.3% avg yield (blended curve)
Bull Case (Rates -100bp): Reinvestment yield drops to 3.3% avg, but existing bonds appreciate ~$7.6M in MV
Bear Case (Rates +100bp): Reinvestment yield rises to 5.3% avg, but existing bonds depreciate ~$7.6M in MV
Maturities: Bonds maturing are reinvested at face value into new 5-10Y Treasuries at prevailing rates
Compounding: Semi-annual coupon payments reinvested at next available auction

📊 3-Year Forecast (April 2026 → April 2029)

Metric	🟡 Rates Flat	🟢 Rates -100bp	🔴 Rates +100bp
Starting Face Value	$66.78M	$66.78M	$66.78M
Coupons Received (3 yrs)	$8.51M	$8.51M	$8.51M
Maturities Received (face)	$11.70M	$11.70M	$11.70M
Total Reinvested	$20.21M	$20.21M	$20.21M
Reinvestment Yield	4.30%	3.30%	5.30%
New Income from Reinvestment	$869K/yr	$667K/yr	$1,071K/yr
Total Portfolio Face (Y3)	$86.99M	$86.99M	$86.99M
Annual Income (Y3)	$3.71M	$3.51M	$3.91M
Monthly Income (Y3)	$309K	$292K	$326K
Income Growth vs Today	+30.7%	+23.6%	+37.8%
Est. Market Value (Y3)	$84.6M	$91.2M	$78.0M
MV Capital Gain/(Loss)	—	+$6.6M	-$6.6M
Total Return (Income + MV)	$8.5M + $0 = $8.5M	$8.5M + $6.6M = $15.1M	$8.5M - $6.6M = $1.9M

📊 5-Year Forecast (April 2026 → April 2031)

Metric	🟡 Rates Flat	🟢 Rates -100bp	🔴 Rates +100bp
Starting Face Value	$66.78M	$66.78M	$66.78M
Coupons Received (5 yrs)	$15.89M	$15.89M	$15.89M
Maturities Received (face)	$12.10M	$12.10M	$12.10M
Total Reinvested	$27.99M	$27.99M	$27.99M
Reinvestment Yield (avg)	4.30%	3.30%	5.30%
Cumulative New Income from Reinvested	$1.20M/yr	$923K/yr	$1.48M/yr
Total Portfolio Face (Y5)	$94.77M	$94.77M	$94.77M
Annual Income (Y5)	$4.04M	$3.76M	$4.32M
Monthly Income (Y5)	$337K	$313K	$360K
Income Growth vs Today	+42.3%	+32.5%	+52.2%
Est. Market Value (Y5)	$92.3M	$99.4M	$85.2M
MV Capital Gain/(Loss)	—	+$7.1M	-$7.1M
Total Return (Income + MV)	$15.9M + $0 = $15.9M	$15.9M + $7.1M = $23.0M	$15.9M - $7.1M = $8.8M

📈 Portfolio Growth: Face Value & Income Over Time

Face Value Growth (Reinvesting All Coupons + Maturities)

Today

$66.8M

Year 1

$72.5M (+$5.7M)

Year 2

$79.4M (+$6.9M)

Year 3

$87.0M (+$7.6M)

Year 4

$90.8M (+$3.8M)

Year 5

$94.8M (+$4.0M)

Annual Income Growth (Rates Flat Scenario)

Today

$2.84M/yr ($237K/mo)

Year 1

$3.08M/yr ($257K/mo)

Year 2

$3.40M/yr ($283K/mo)

Year 3

$3.71M/yr ($309K/mo)

Year 4

$3.87M/yr ($323K/mo)

Year 5

$4.04M/yr ($337K/mo)

Cumulative Coupon Income Collected

Year 1

$2.84M

Year 2

$5.92M

Year 3

$8.51M (reinvested)

Year 4

$12.02M

Year 5

$15.89M (reinvested)

🎯 The Compounding Power: By reinvesting every coupon into Treasuries, your portfolio grows from $66.8M → $94.8M face value in 5 years — a +$28M increase (42%) funded entirely by your own coupon income. Monthly income grows from $237K → $337K (+42%). Even in the worst case (rates +100bp), you still collect $15.9M in coupons over 5 years. The bonds mature at par regardless of rate moves — unrealized losses are temporary, income is permanent.

⚡ Key Insight — Income Snowball: Each $2.84M in annual coupons buys roughly $2.84M more face value at par. Those new bonds generate ~$122K/yr in additional coupons (at 4.3%), which ALSO get reinvested the following year. By Year 3, the "income on reinvested income" alone is worth ~$35K/yr and accelerating. This is the Treasury compounding snowball — slower than equities, but risk-free and guaranteed by the US government.

📊 US Treasury Portfolio Report | Data: April 2, 2026 (Schwab positions) | Market data: April 3, 2026
Source: blanco_portfolio_april.xlsx (Schwab) + HSBC statements March 2026 + Trading Economics + US Treasury
CORRECTED — includes actual HSBC market values from March 31 statements
Good Friday — US equity markets closed, bond markets shortened session
This report is for informational purposes only. Consult your financial advisor before making investment decisions.