Part 4 Subpart 4-8 Investment Policy

Sec. 4-803. Investment Objectives for Intermediate-Term Investment Pool Accounts.

Funds needed for expenditures within one to five years shall be considered intermediate-term and may be placed through direct investments, the use of mutual funds, money managers or a combination. The intermediate investment pool will maintain an average weighted maturity between one year and five years, except for Treasury Inflation Protected Securities (TIPS) managers. The primary investment objectives for the intermediate-term investment pool accounts shall be the preservation of capital and the maximization of income without undue exposure to risk within the parameters specified in this subpart. Direct investments in certificates of deposits, U.S. government obligations, U.S. agency obligations, commercial paper and corporate bonds with maturities less than five years are authorized.

TIPS are a special type of Treasury note or bond that offer protection against inflation, as the coupon payments and underlying principal are automatically increased to compensate for inflation as defined by the consumer price index (CPI). Although the maturities may be longer than 5 years, these investments are included in the intermediate-term pool based on their risk profile.