CUNA
  • Advocacy
    • Priorities we’re fighting for
    • Actions you can take
  • News
  • Learn
  • Compliance
  • Shop
  • Topics
    • Community Service
    • Compliance
    • Credit Union Hero
    • Credit Union Rock Star
    • Credit Union System
    • Directors
    • Human Resources
    • Leadership
    • Lending
    • Marketing
    • Operations
    • Policy & Issues
    • Sales & Service
    • Technology
  • Credit Union Magazine
    • Buyers' Guide
    • COVID-19
    • Digital Edition
    • Credit Union Hero
    • Credit Union Rock Star
    • Subscribe
    • Advertise
    • Contact
  • COVID-19
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Contact
Learn More about Member Value

News

Member Benefits
Learn more
Learn more about the benefits of membership.
Home » 6 traits of top-notch investment portfolio management
Management

6 traits of top-notch investment portfolio management

Net-interest margins remain near 15-year lows.

August 17, 2017
Bill Merrick
No Comments
Ryan Hayhurst at CUNA Economics & Investments Conference 2017

Can credit unions manage their liquidity and interest rate risk and still improve their earnings?

“Yes, but there are some trade-offs,” says Ryan Hayhurst, managing director of The Baker Group.

He addressed the CUNA Economics & Investments Conference Tuesday in Las Vegas.

Net-interest margins remain near 15-year lows, Hayhurst says. He advises using investments to boost the bottom line.

Consider these six characteristics of high-performing investment portfolio management:

  1. Use the investment portfolio to fight margin erosion. “The bond portfolio is the only place we can increase margin without hurting the membership,” Hayhurst says.
  2. Define, measure, and manage. Define your portfolio objectives and risk tolerance, measure your risk exposure, and manage your risk. “Actively manage the portfolio in the context of your balance sheet,” he says.
  3. Develop a written investment strategy. “Build a portfolio,” Hayhurst says, “don’t be sold one. Be proactive, not reactive, with a disciplined investment strategy.”
  4. Diversify the portfolio across sectors and within sectors. Each sector has its pros and cons. Diversification protects against a range of interest-rate scenarios, he says.
  5. Minimize cash and certificates of deposits (CDs) in favor of bonds. “High-performance portfolios tend to own less cash and CDs, and more mortgage-backed securities and CMOs [collateralized mortgage obligations],” he says.
  6. Build a portfolio of stable, predictable cash flow. “Steady, consistent cash flow is the best natural hedge against rising rates,” Hayhurst says.

In short: “Stay diversified, focus on mortgages, and find the best relative value.”


Click here for more CUNA Economics & Investments Conference coverage from CUNA News, and get updates on Twitter via @CUNANews and @cumagazine, 

KEYWORDS EIC17 investments portfolio

Post a comment to this article

Report Abusive Comment

Credit Union Magazine - Spring 2021

Spring 2021

Credit Union Magazine’s Spring 2021 edition features CUNA's 2021 advocacy agenda, strategic planning guidance, and labor market insights.
Digital Edition •  Subscribe

Trending

  • ‘More listening and less attacking’

  • Movement must focus on financial well-being for all

  • Why DEI matters to credit unions

Tweets by CUNA_News

Polls

Who should be the 2021 Credit Union Hero of the Year?

View Results
More

Champion of America’s Credit Unions

Credit Union National Association is the only national association that advocates on behalf of all of America’s credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • About
  • Careers
  • Contact Us
  • Recommended Websites
  • Privacy Policy

Resources for

  • CUNA Board Members
  • Credit Union Advocates
  • Leagues
  • Press
  • Vendors