At COLOTRUST, we are committed to providing services that fit the varying needs of Colorado local governments through many different market conditions and investment cycles. As a result of the economic downturn in response to the COVID-19 pandemic in 2020, the COLOTRUST Board of Trustees recognized the need for a longer-duration portfolio designed to generate a higher yield by investing further out the yield curve. With the assistance of investment advisor and administrator Public Trust Advisors, we are pleased to introduce the EDGE product designed to complement our existing liquidity programs.

What is COLOTRUST EDGE?

COLOTRUST EDGE is an enhanced cash portfolio with a next-day redemption structure and a variable NAV of approximately $10.00 per share. Below are a few key features about the EDGE portfolio:

EDGE is a variable NAV fund

A stable NAV portfolio generally requires a weighted average maturity (WAM) of 60 days or less and a weighted average life (WAL) of 120 days or less. Because EDGE incorporates longer-dated securities with the goal of generating a higher rate of return, it is recognized as a variable NAV portfolio. With EDGE, the COLOTRUST investment team adheres to the same credit metrics utilized in PRIME and PLUS+ yet does not claim to be a stable or constant NAV portfolio; COLOTRUST has always provided Colorado local governments a transparent view into the inner workings of their portfolios. In short, EDGE is a variable NAV portfolio that seeks to generate a higher yield by investing farther out the yield curve.

EDGE transactions settle one business day after the transaction date is selected in the COLOTRUST online portal

For example, if you enter an EDGE redemption request on a Tuesday before 11:00 a.m. MT cut-off time, the funds will be available the following business day.

Eligible investments for EDGE are the same as PLUS+ but maturities differ

While all COLOTRUST portfolios only invest in securities that are permissible under the Colorado Revised Statute for local governments, the extended maturity range of EDGE securities distinguishes it from PLUS+. Both the PLUS+ and EDGE Investment Policies utilize the same asset classes while EDGE permits longer-dated securities.

How Can I Use EDGE?

EDGE is best suited for your local government’s non-operating reserve funds. EDGE is designed for investors with slightly longer investment horizons and the ability to tolerate a higher risk profile. It might be helpful to review past years’ investment balances to evaluate better which funds may be considered for longer-term investing; whatever represents the “low watermark,” or the funds that have never been withdrawn or redeemed, is what could be invested in EDGE. While PLUS+ and PRIME likely form the foundation for your immediate liquidity needs, EDGE seeks to optimize funds that do not need to currently be withdrawn or redeemed.

Should you be interested in learning more about COLOTRUST EDGE, please contact the COLOTRUST Relationship Team. If you’re ready to get started with EDGE today, please fill out the form below!

Investment involves risk including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. All comments and discussions presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. The information presented should not be used in making any investment decisions. This material is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. Investment involves risk including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. COLOTRUST is not a bank. An investment in COLOTRUST is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although COLOTRUST PLUS+ and COLOTRUST PRIME seek to preserve the value of your investment at $1.00 per share, they cannot guarantee they will do so. For risks associated with investing in prime-style, government-style, and enhanced cash-style local government investment pools, please click here. Past performance is no guarantee of future results. Any financial and/or investment decision may incur losses.