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Investment strategies: Reviewing 2018, anticipating 2019

By: Bob Post, Chief Investment Officer

Bob Post As we begin 2019, we look forward to this new year with anticipation while reflecting a little on the past.

In December of 2017, the median dot plot forecast from the Federal Open Market Committee (FOMC) called for three rate hikes in 2018. We received four rate hikes instead. The yield curve has flattened from last December, and the spread between the 10-year and 2-year declined from 52 basis points in December 2017 to 20 basis points as of December 2018. The equity market volatility at the end of November and throughout December of 2018, coupled with tariff concerns and a tightening FOMC, has overshadowed positive economic data and caused a rally in intermediate- to- longer-term Treasuries.

If you’d like to dig into the economic data in more detail, I hope you’ll view our most recent quarterly economic update webinar if you haven’t already. For tips on what investment strategies to consider in a flat yield-curve environment, check out this article included in this month’s newsletter. I’m proud to mention the following highlights from 2018 as I reflect on how we helped our members this year.

Providing liquidity when needed

  • Tightening liquidity throughout much of 2018 caused many credit unions to seek more funding; lending has increased overall, driving loan-to-share ratios to a record high of 86% in the fourth quarter.
  • To meet this need, Corporate One boosted our lending efforts this year and assisted our members in raising liquidity through our robust non-member deposit programs. In 2018, we helped credit unions raise $254 million in non-member deposits.
  • Approximately $234 million of this amount was through the SimpliCD program, and $20 million was through our partnership with PMA, offering credit unions the opportunity to bring in non-member deposits from public entities.

Enhancing the SimpliCD online platform

  • Speaking of SimpliCD, several enhancements were made this year to this online trading platform, which already offers easy, convenient access to trading and investment research, streamlines the trading process, and customizes data based on your credit union’s investment portfolio.
  • New dashboard enhancements included automatic customization for your credit union; a snapshot of your purchases, maturities, and current portfolio size; and a best rate/same term feature, which simplifies rollovers.
  • For more details about the enhancements and how to access SimpliCD online, take a look at this recent article.

Offering the New Investment and Funding Dashboard

As part of our overall strategic vision to offer credit unions a streamlined and modern user experience for enhanced cash management, we rolled out our new Investment and Funding Dashboard in early October. Among other features, the dashboard enables members to:

  • Easily access their account data, including available lines of credit, from one location
  • View and download pie charts of overall balances and investment and funding balances for inclusion in monthly and/or board reports
  • Readily retrieve historic month-end account balances

The “Investment & Funding Dashboard” is available to all Corporate One members with Member$MART authority to access Member$MART online, Account Inquiry and e-Reports. For questions, reach out anytime to our Member Experience team at 866/MyCorp1.

On behalf of our Investment and Funding team, I would like to thank you for giving us the opportunity to serve your credit union through our liquidity, safekeeping and investment offerings. It continues to be a pleasure to do so as we support the credit union movement. Wishing everyone much success in 2019!