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CUs seek cash-management strategies

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WASHINGTON (4/25/11)--The Trust for Credit Unions’ Ultra-Short Duration Portfolio is a cash management tool that uses short-term, liquid investments to increase yield and improve balance sheets. The portfolio targets nine-month Treasury bills and seeks current income and low volatility by investing in obligations authorized under the Federal Credit Union Act. “Daily pricing, next-day settlement, and no minimums or maximums are just a few of the benefits that make the Trust for Credit Unions’ funds attractive options for credit unions looking to optimize their investment portfolios without sacrificing liquidity,” said Jon Jeffreys, executive vice president of Callahan Credit Union Financial Services Limited Partnership (CUFSLP), the funds’ administrator. CUFSLP is a partnership of 39 credit unions with Callahan Financial Services, the fund’s distributor, serving as the general partner. The Trust for Credit Unions was created in 1987 by credit union leaders seeking more investment options as liquidity swelled. During its 23 years, the trust has served more than 500 credit union investors with total fund balances peaking at $4.1 billion The trust’s three funds--Money Market Portfolio, Ultra-Short Duration Portfolio, and Short Duration Portfolio--have durations ranging from overnight to two years to meet credit unions’ liquidity needs. Investors can redeem shares as needed with daily pricing. Unlike individual government bonds or other securities purchased directly, selling shares of the trust portfolios requires one trade--professional managers decide what securities to sell to handle any redemption requests, CUFSLP said. The funds are also “no load,” with no front- or back-end sales charges.