One of the most unique benefits of working with a partner like ALM First is that the firm’s investment philosophy is grounded in a sound ALM framework. This means that investment strategies are developed in consideration of your specific balance sheet risk profile. Our holistic, customized approach adds value by helping your institution manage a high-level investment process, focusing more on research, asset allocation, and security selection. This allows our clients to enhance performance, quickly adapt and respond to changes in markets as well as stay in compliance to ever-changing regulation. Each portfolio is managed to a specific mandate or performance objective based on client goals and risk tolerance.
ALM First provides non-discretionary investment advisory services for your fixed-income portfolio. Focusing on our client’s goals, objectives and liquidity needs is paramount to continuing success and enhanced performance. ALM First utilizes a thoughtful investment framework that seeks to increase risk-adjusted returns within stated risk guidelines. Additionally, all investment decisions are regularly reviewed to ensure that actual performance is aligned with expectations.
The main components of the investment advisory service include:
- Portfolio evaluation and strategy
- Investment analytics and performance
- Investment execution
- Bond accounting
- Policy review
- Education on investments, bond math and portfolio management
ALM First utilizes its expertise, models and experience to manage more than fixed income portfolios. The firm also works with clients in other areas of asset management such as:
- Pre-Funded benefits investment accounts
- Charitable Donation Accounts
- Mutual funds
This strategy targets a duration similar to a 9-month Treasury bill. Emphasizing credit quality and liquidity, Enhanced Liquidity portfolios seek to deliver excess returns relative to its T-bill benchmark and the interest rate on excess reserves (IOER) at the Federal Reserve. Portfolios consist primarily of agency mortgage-backed securities (single-family and multifamily), floating-rate securities, repurchase agreements, and bank notes.
This strategy targets a duration of 2.25-2.75%, and portfolios seek to generate excess returns relative to the Bank of America Merrill Lynch 1-5 year Treasury/Agency index. The investment team generates excess returns via duration targeting, sector allocation, and security selection, in that order, and portfolios are built with an emphasis on credit quality and liquidity. Example holdings can include agency mortgage-backed securities (single-family and multifamily), floating-rate securities, repurchase agreements, and bank notes.
Investment Grade Credit
The investment grade credit strategy focuses on investment grade credit in the 1-5 year area of the yield curve. It is designed to deliver a low tracking error return relative to the Merrill Lynch 1-5 year investment grade index. As with many of portfolio strategies, ALM First seeks to add excess returns through sector allocation and security selection.
A credit union may provide benefits to employees and officers that are reasonable in kind and size given the credit union’s size, financial condition and duties of employees. Pre-funding the employee benefit plan obligation allows a credit union to establish an investment portfolio to offset future expenses tied to the plan obligation. A pre-funded benefits account allows access to investments which are otherwise impermissible to fund future benefit expenses, and can offer substantial benefits in terms of flexibility and transparency. ALM First offers a variety of services designed to meet the institution’s goals and comply with regulatory guidelines.
Charitable Donation Accounts (CDA)
Charitable donation accounts are investment accounts that grant credit unions special investment capabilities, while supporting their donations to charities. By utilizing CDAs, credit unions have the opportunity to fund charitable contributions through investment returns rather than operating income. ALM First offers a variety of strategies designed to meet the institution’s goals and within the guidelines and risk tolerance of the institution.
ALM First specializes in fixed income asset management, and provides these services for mutual funds seeking specialized solutions for their unique needs. Based on the mandates of the fund, ALM First strives to provide enhanced risk-adjusted performance and investment management services.
ALM First specializes in managing 703-compliant assets and is currently the asset manager for the Trust For Credit Unions Ultra Short Duration Portfolio (TCUUX) and the Short Duration Portfolio (TCUDX). More information can be found at http://www.trustcu.com/
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