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| Created in 2007, the Money Market Pool is FL SAFE's short-term cash management vehicle, designed to maintain safety and liquidity while preserving the capital of Florida governmental entities. One of the biggest benefits of the Money Market Pool is the ability to combine the purchasing power of many public entities, in order to attract higher interest rates for Participants. |
| How it Works |
| FL SAFE provides a vehicle that pools funds for investment in U.S. government obligations, agencies, commercial paper and other high quality short term instruments, creating an efficient way for Participants to manage their short-term investment needs. |
| Maintaining a Stable Net Asset Value |
| The primary goal of FL SAFE is to maintain $1.00 per share Net Asset Value (NAV). No investment pool or money market fund can "guarantee" a NAV of $1.00 per share. Investing in any type of security introduces elements of risk. Among those risks are interest rate risk, liquidity risk and credit risk. In a local government investment pool like FL SAFE, the task of the investment advisor is to mitigate those risks so that participants and taxpayer dollars are protected. |
| $1.00 per Share NAV Goal |
| Portfolio securities are valued using the amortized cost method of valuation. This method involves valuing each investment at cost on the date of purchase and assuming a constant amortization to maturity of any discount or premium. Amortized cost valuation provides certainty in valuation, but may result in valuations that are higher or lower than the market price of a particular portfolio security. As a result, the Fund has implemented Pricing Procedures for Stable Value LGIPs which require the portfolio to be priced at least weekly using a third-party pricing service. If the difference between the aggregate market value and the aggregate amortized cost of the portfolio securities exceeds 0.10%, key personnel at the investment advisor will be notified. If such difference exceeds 0.25%, the Fund’s Board will be notified and will consider what action, if any, should be initiated. If the market value remains between $0.9950 and $1.0050, transactions can be executed at $1.00 per share. |
| The APPROACH TO MAINTAINING A AAAm CREDIT RATING |
| FL SAFE invests in high-quality short-term debt instruments and follows S&P’s credit rating requirements for credit quality, maturity, liquidity, diversification and internal controls. The Fund’s advisor has implemented risk management policies and procedures for purchasing and monitoring the Fund’s investments. Through these risk management techniques including those required by S&P for a AAAm rated Net Stable Value Fund, FL SAFE seeks to maintain a NAV of $0.9975 or higher as required to achieve a AAAm rating. According to S&P’s rating criteria, the AAAm rating signifies excellent safety of invested principal and a superior capacity to maintain a $1.00 per share Net Asset Value. |
| For a complete analysis of S&P rating methodology and the strategies employed to maintain a $1.00 NAV, view the S&P Fund Ratings Criteria document. |
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