NCUA: IRRationally Risky or Simply IRResponsible With Your NCUSIF Funds...?

Several folks said they would like to see the NCUSIF update presented to the NCUA Board at its last meeting. Here's the link.

As an update on NCUA's investment strategy, you may find it interesting to note page 7 of the report. NCUA now has 45% of the $11+ billion fund [your money, your insurance fund deposit by the way] invested in securities with a term > 5 years.  

[Hasn't Ms. Matz and your examiner been screaming and threatening CUs to "stay short (or die!)" for the last few years????]

Here's a look at the history of the Fund:

        Qtr.               % > 5yrs       Avg. Portfolio Term

12/31/11           11.24%            3.08 yrs.

12/31/12           21.07%            3.34 yrs.

12/31/13           31.82%            3.76 yrs.

03/31/14           33.42%            3.84 yrs.

06/30/14           36.47%            3.96 yrs.

09/30/14           39.00%            4.11 yrs.

12/31/14           41.43%            4.25 yrs.

03/31/15           44.36%            4.42 yrs.

So what's the final analysis of the NCUA capital markets specialists' robust, "we're sharper than Wall St.", and all of y'all too investment strategy?

Well, there is some good news and there is some bad news... 

Ducked that one!

GOOD NEWS:  For the last 5 years, the NCUA capital markets staff has chosen to completely ignore the hysterical, "world is ending" interest rate risk predictions of their Chair.

Longer and lower?
Amazing...!!

BAD NEWS:  In executing their robust, "reaching for yield" portfolio extension, the capital market folks were able to lower the overall portfolio yield from 2.08% to 1.89%!   Hard to beat that!!!