How Much Does Your Investment Strategy Influence Portfolio Performance? - General Features - News | Credit Unions

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With credit unions’ net interest margin falling to 2.96%, every basis point matters. Yet the average investment yield has dropped 34 basis points over the past year to 1.32%. In an environment characterized by high liquidity and low rates, effective management of the investment portfolio has become an important part of the credit union business model.

Given the low rate environment, it would be understandable to expect a relatively narrow range of investment yields across credit unions. However, there is actually significant variance among institutions, reflecting different portfolio compositions. In fact, the top quartile of credit unions by average investment return generate an average return of 1.92%, over six times the 31 basis point average return generated by the bottom quartile.

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