The Trust for Credit Unions (TCU), the oldest and largest mutual fund family created for and by credit unions, recently announced that its Board of Trustees approved a change to the name and investment policies of the Ultra-Short Duration Portfolio effective January 1, 2019.
The Ultra-Short Duration Portfolio is intended for secondary liquidity and seeks to achieve a high degree of current income, consistent with low volatility of principal, by investing in obligations permissible under the Federal Credit Union Act.
Formerly called the Ultra-Short Duration Government Portfolio, the fund no longer requires that 80% of its assets be invested in government securities. The Portfolio may also invest in non-U.S. government related securities, including bank notes and repurchase agreements secured by non-U.S. government related collateral. These changes will allow for greater flexibility for the fund’s investment advisor, ALM First Financial Advisors.
“We believe these changes could potentially benefit TCU’s credit union investors as the Ultra-Short Duration Portfolio is expected to have less interest rate risk and asset value fluctuation than funds investing primarily in longer-term mortgage-backed securities paying a fixed rate of interest,” says Jason Haley, Managing Director for the Investment Management Group at ALM First Financial Advisors.
In connection with the investment policy change, the Ultra-Short Duration Portfolio’s target duration has also changed and is now approximately that of the ICE BofAML US 3-Month Treasury Bill Index with a maximum duration of a One-Year U.S. Treasury Security.
TCU helps credit unions succeed by providing a professionally managed family of mutual funds --- exclusive to credit unions --- as well as the information and analysis they need to support investment decisions. Created by leading credit unions and with oversight by a board of trustees, TCU’s mutual fund options keep credit unions invested, are professionally managed, and are based on the cooperative values of credit unions.
More information about the TCU portfolios may be found on our website, www.trustcu.com.