From the most recently posted financials as of February 2024, the Investment Committee appears to have learned nothing from the past two years of Fed Reserve short-term rate increases.
The Committee bought a $650 million Treasury bond yielding 4.26% with a final maturity of 6 years and three months on February 15.
The investment extended the NCUSIF’s duration, increased the portfolio’s interest rate (IRR) risk, and reduced short-term liquidity. The term portfolio (75% of the $22.5 billion total) is underwater by $1.3 billion and yields just 1.44%. the Fund’s overnight position in contrast earned an average yield of 5.41% in February.
