WASHINGTON–New data show the average yield on investments rose 13 basis points from the previous quarter, reaching 1.92% at the end of June, the highest level since December 2010 when the investment yield was 1.96%, according to a quarterly investment trends review released by Trust for Credit Unions.
The findings are based on data that includes second quarter 2018 data for all U.S. credit unions.
“Credit unions benefited from the Fed increasing rates three times in 2017 and twice more in 2018, with at least two rate hikes projected (and priced into the market) for the remainder of the year,” said Callahan & Associates, which oversees the Trust for Credit Unions, in a released statement. “Total credit union investment income expanded 3.3% quarterly and 21.4% annually, driving yield on investments higher through the first half of 2018.”
In total, credit unions held $358.3 billion in investments as of June 30, 2018, down by 5.6% from the first quarter, Trust for Credit Unions said. The company added the dip in total investments for the quarter followed past cyclical trends of growth in the first three months of the year, followed by a slight decline in the following three quarters combined with growing liquidity pressure due to sustained loan demand.
Credit unions that want to download a free copy of the Investment Trends Review can do so by going to www.trustcu.com.