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Investment portfolio

The Farm Credit System Insurance Corporation (FCSIC) manages an investment portfolio to support its mission to protect investors in Farm Credit System debt obligations. FCSIC’s primary investment objective is to ensure adequate liquidity to meet its mission and secondarily to optimize the rate of return on the investment portfolio. FCSIC’s Board of Directors has established an investment policy  to ensure these objectives are met.

FCSIC is required by law to invest in obligations of the United States or obligations guaranteed as to the principal and interest by the United States. FCSIC’s investment policy limits investments to market-based Treasury securities and provides limits to meet investment objectives. For example, at least 40 percent of the investment portfolio must be in Treasury securities that mature within 2 years. We also limit investment in Treasury securities with maturities of between 5—10 years to no more than 20 percent of the portfolio, and we do not invest in Treasury securities with maturities beyond 10 years.

The Insurance Fund has grown considerably over the last 10 years, as shown in the graph below.

This chart shows the investment balance from 2014, when it was $3.51 billion, to 2023, when it was $6.79 billion. The chart shows a steady increase throughout the period, with the most significant increases coming in the recent periods. In 2021, the investment balance was $5.48 billion. In 2022, it was $5.99 billion. And in 2023, it shot up to $6.79 billion.

FCSIC Investments:

In 2022, FCSIC implemented a five-year bond ladder strategy, which has increased the weighted-average maturity of the portfolio. Under the current strategy, FCSIC plans to keep about 42% of the portfolio in the 0- to 2-year range and about 58% of the portfolio in the 3- to 5-year range. The below chart shows the Investment Portfolio’s maturity schedule as of July 1, 2024. 

This chart shows the investment maturities by year for the next 5 years. In 2024 and 2025, 21% of the Investment Fund will mature, amounting to about $1.5 billion each year. In 2026 to 2028, each year about 19% of the investment portfolio will mature. Each year during those periods we expect nearly $1.4 billion of investments to mature.

As of December 31, 2023, the weighted-average maturity of the portfolio was 2.47 years, up from 2.05 years at the end of 2022.

This chart shows the weighted average maturity duration of the investment balances during the last 5 years. In 2019, the average maturity duration for investments was 1.62 years. In 2020, it dropped to 1.10 years. In 2021 it went up to 1.35 years. In 2022 it continued increasing upward, to 2.05 years in 2022. The average maturity duration in 2023 was 2.47 years.

Investment Portfolio Results:

FCSIC’s investment performance is described in more detail in our Annual Report.

The chart below shows the average yield of our investment portfolio over the last five years. Since interest rates remain elevated, we expect the average yield to continue to rise throughout 2024. 

This chart shows the weighted average yield of the investment balances during the last 5 years. In 2019, the investment yield was 1.94%. In 2020, the average yield dropped to 1.26%. In continued decreasing in 2021 to 0.91%. In 2022, as rates started to rise so did our investment yield which rose to 1.22%. At the end of 2023 the investment portfolio yield was 2.45%.

FCSIC’s current investment information is publicly available on the Treasury Direct website at under account number 352X4136.