Connecticut's Short-Term Investment Fund returned more than triple what similar money market funds paid over the past five years, said Treasurer Denise Nappier.
During the period that ended June 30, the fund earned an average of 20 basis points, while its benchmark of similar money market funds earned 6 basis points, Nappier said. The performance resulted in an additional $35.5 million in interest earnings, she said.
According to a statement from Nappier, STIF's performance is compared with similar money market funds as measured by the iMoneyNet First Tier Institutions-Only AAA-Rated Money Fund Report Averages Index.
"We are pleased to have consistently exceeded the returns seen by comparable funds, particularly during these periods of extremely low interest rates and uncertainty," said Nappier, serving her fourth term as state treasurer after 10 years as Hartford city treasurer.
STIF serves as a liquid investment pool for the cash balances of the state Treasury, agencies and authorities, municipalities and other Connecticut political subdivisions. As of June 30, the Treasury's cash management division administered 874 active STIF accounts for 67 state agencies and authorities and 260 municipalities and local entities.
The division has managed the pool since its inception in 1972. Portfolio manager is Michael Terry, who joined Nappier's office in September 2012. BNY Mellon is the administrator and custodian for the fund.
S&P, which has rated the pool since 1996, assigns its AAAm rating, its highest of six ratings for principal stability funds. S&P said the pool "has an extremely strong capacity to maintain principal stability and to limit exposure to principal losses due to credit risk."
According to S&P, the fund typically holds a sizeable portion of floating-rate notes that are tied to standard short-term money market indices such as overnight Fed funds, LIBOR, Prime and Treasury bills.
Nappier said the STIF in fiscal 2014 earned 14 basis points, earning investors an additional $5.7 million in interest income, while its benchmark returned 2 basis points.
