Money-Market Securities

Funds generated from investment income and contributions are invested in money-market investments prior to allocating the funds to more long-term investments or benefit payments. Normally, the fund holds between 1% and 4% of its assets in cash or money-market securities. The extreme volatility in financial markets over the past year led to a flight to quality, taking money-market yields to unprecedented lows by mid-year. Despite rallies in equity and credit markets, money-market yields stayed stubbornly low, with the 30-day T-Bill yield averaging less than 1% throughout the second half of the year.

With short-term interest rates at or near all-time lows for most of the year, it was very difficult to earn a meaningful return from money-market instruments. For the year, ATRF’s money-market portfolio returned 1.5%, which exceeded the 1.0% return of the DEX 30 Day T-Bill Index. On the whole, ATRF’s fixed-income portfolios returned 7.2% for the year, which compared favourably to the benchmark return of 6.4%.