The Oregon Local Government Intermediate Fund ("OLGIF" or "Fund") is a commingled investment pool for local governments offered by Oregon State Treasury ("OST") due to Legislation HB2140 and pursuant to ORS Chapter 294. OLGIF provides qualified local government participants with a vehicle to invest assets over an intermediate time horizon (three to five years).
OLGIF is actively managed to maintain a diversified portfolio of investment grade bond investments. Based on historical market performance, it is anticipated that the returns generated over extended periods will be greater in OLGIF than in shorter maturity vehicles such as the Oregon Short Term Fund (“OSTF”). The investment objective of OLGIF is to achieve a total return (i.e., principal and income) greater than the Barclays 1-5 Year U.S. Government/Credit Index (“Benchmark”). Eligible investments and investment exposures are subject to approval by the Oregon Investment Council (“OIC”) and are detailed in OLGIF’s guidelines. OLGIF may have exposures, subject to diversification requirements, to several types of investment grade public debt market instruments denominated in U.S. dollars.
OLGIF is not appropriate for assets needed to cover short-term needs (less than one year). OLGIF is not structured to provide 100% net asset value (“NAV”) at all times on participant investments, as participants may experience losses on OLGIF investments due to changes in market conditions. Assets invested in OLGIF should be able to withstand greater price volatility to achieve the level of returns typically associated with longer-term investments.
Local Governments meeting requirements established by OST will be considered eligible to invest and participate in OLGIF. OLGIF is a voluntary investment vehicle for Oregon local governments.
A local government may qualify to invest in OLGIF by completing the requirements listed below. Confirmation of completion of each requirement should be provided to OST investment staff at OLGIF@ost.state.or.us.
a. OLGIF listed as an eligible investment in the participant’s investment policy.
b. Investment policy reviewed by the Oregon Short Term Fund Board.
c. Investment policy approved by the participant’s governing body.
i. The OSTF Board has established an expedited investment policy review process for local governments adding OLGIF as an eligible investment. The OSTF Board expedited review process is detailed in the section entitled “OSTF Board Review”.
d. Statement of understanding recorded in the participant governing body’s minutes, as follows, with no deviations:
The governing body of ______________________ acknowledges the following:
e. Existing Account with the Oregon Short Term Fund.
- Members of this body and investment staff have read and understand the “Oregon Local Government Intermediate Fund Information Pamphlet” provided by Oregon State Treasury;
- Investments in OLGIF are subject to loss; and
- Investments into OLGIF and divestments from OLGIF may be subject to restriction by Oregon State Treasury.
f. Following documents completed:
i OLGIF Application
ii OLGIF ACH Credit Authorization
iii OLGIF Authorized Signature Letter
Local Governments qualifying to participate in OLGIF must have an OSTF Board reviewed investment policy with OLGIF included as an eligible investment. For investment policies where the addition of OLGIF as an eligible investment is the only revision, the OSTF Board has established an expedited review process. To qualify for the expedited process, investment policies must adhere to the following requirements with no exception.
- Participant has pre-existing OSTF Board-reviewed investment policy prior to the addition of OLGIF as an eligible investment.
- OLGIF listed as an eligible investment in the participant's investment policy.
- OST approved Statement of Understanding (as detailed in the Qualification Process) approved by governing body.
- OST approved Statement of Understanding (as detailed in the Qualification Process) signed by authorized investment officer.
- Maximum portfolio exposure - 20% as measured by market value.
Any changes to a participants investment policy in addition to OLGIF will require a standard review by the OSTF Board.
OSTF Board Investment Policy Guidance for OLGIF Participants
- Appropriateness: OLGIF is likely not appropriate for entities that do not have budgeted reserves.
- Maximum portfolio exposure: 20% or less measured in market value.
- Maturity bucketing: Average maturity and duration of OLGIF's investments are recommended for classifying OLGIF's term to maturity and interest rate risk. The average maturity and duration of the benchmark have both ranged between 2.5 and 3.0 years over the past 10 years. However, the Benchmark has maturities out of 5 years and OLGIF may invest in maturities up to 10.25 years. It is expected that OLGIF's average maturity and duration will closely follow the benchmark's average maturity and duration. Inclusion in the 3.0 year to 5.0 year maturity bucket is reasonable. Investors should check with their financial reporting staff and auditors to determine the proper classification.
- Credit risk allocation: The average rating of OLGIF investments is a reasonable proxy for characterizing OLGIF's rating. OLGIF's benchmark has consistently maintained a Aa2 average rating. However, OLGIF may invest in debt with investment grade ratings down to BBB-. It is expected that the fund's average rating will closely follow the benchmark's average rating. Investors should check with their financial reporting staff and auditors to determine the proper classification.
Annual Financial Statements
Fund Performance and Market Commentary
Any information provided herein has been prepared from sources believed to be reliable but is not guaranteed, and is for informational purposes only. The information provided herein should not be regarded as an offer to sell or as a solicitation of an offer to buy the products mentioned. No representation is made that any returns will be achieved. Past performance is not indicative of future results. Opinions expressed herein are subject to change without notice. The securities and funds mentioned in this document may not be eligible or suitable for all types of investors.