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The Trust for Credit Union’s (TCU) assets under management have surpassed $5 billion, setting an all-time record for the pool of institutional mutual funds for credit unions.

The Trust for Credit Unions (TCU) based in Washington, D.C., reported Tuesday that its two bond funds, the Ultra-Short Duration and Short Duration Portfolios, had total combined assets of $5 billion as of April 12, after attracting nearly $1 billion in new investments in a single month. It was nearing $3 billion in late November 2020.

TCU’s previous record was $4.1 billion, reached in March 2003.

CUNA has estimated that credit unions held $1.66 trillion in savings in February, 19.6% more than they held a year earlier. The gain of the previous 12 months ending February 2020 was 9.1%.

Surplus funds (cash plus investments) rose 48% to $653 billion as of Feb. 28, an increase of $210.5 billion over the previous 12 months.

As credit unions continue to seek competitive investment options to help them manage excess liquidity, TCU has attracted a record number of new credit union investors while continuing to assist their long-time institutional investor base.

TCU was founded in 1987 by credit unions to provide an option for diversifying their holdings of overnight and short-term funds from banks and the direct market. The funds were designed to be professionally managed and based on the cooperative values of credit unions.

The TCU Ultra-Short Duration Portfolio, which targets a three-month duration, had a 30-day yield of 0.23% as of April 12, while the TCU Short Duration Portfolio, which targets a two-year duration, had a 30-day yield of 0.48%. The yields reflect the 30-day effective yield, net of fees/expenses. Both funds offer next-day liquidity, feature no minimum or maximum investment amounts, and have no tiers.

The funds’ distributor is Callahan Financial Services, Inc., a subsidiary of Callahan & Associates, the Washington, D.C., credit union company.

“TCU has supported the industry’s investment needs for more than three decades, building a strong history of performance,” Jay Johnson, TCU president and Callahan & Associates’ chief collaboration officer, said. “We’re pleased to welcome new credit union investors as more cooperatives seek competitive options to put their excess liquidity to work.”

Created by leading credit unions with oversight by a board of trustees, TCU’s mutual fund options are professionally managed and based on the cooperative values of credit unions. ALM First Financial Advisors serves as the funds’ investment advisor, providing ongoing economic updates and educational resources for both current and potential investors.

Jason Haley, chief investment officer for ALM First, said the firm has managed short-duration fixed income portfolios for institutional investors for more than 25 years.

“We’re proud to share our knowledge and market insights regularly for the benefit of TCU investors and the entire industry,” Haley said.

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