Money Market Fund Commentary (Government Securities Money Market Fund & U.S. Treasury Fund)

3Q 2022

Market Overview

Money market funds yields reflected a much-appreciated series of interest rate hikes courtesy of the Federal Open Market Committee (FOMC). The federal funds target range was raised 75 basis points (0.75%) in July and again in September, following increases in March, May, and June. The benchmark short-term interest rate ended the third quarter at 3.0% and 3.25%.

Positioning the Money Market Funds

Portfolio composition is subject to change.

We believe the Federal Reserve will continue to raise rates to counter persistent inflation. Although this cycle’s highest interest rate level - the terminal rate - can only be guessed at now, markets believe rates will continue to rise rapidly this year and into next year. That mandates a relatively short-weighted average maturity for both our money market funds, and much of our assets are invested in overnight repurchase agreements, which quickly reflect higher rates while providing daily liquidity. We also have positions in Secured Overnight Financing Rate floating-rate notes in our Government Securities Money Market Fund.

This summer, we began investing in overnight repurchase agreements issued by the Federal Reserve Bank of New York. This provides a substantial yield boost in our Government Securities Money Market Fund.

Why should investors consider investing in this Fund?

The purpose of money market funds is to offer investors stability, where the priorities are capital preservation and income. With the FOMC rapidly raising rates, returns have once again become attractive.


An investor should consider a fund’s investment objectives, risks and charges and expenses carefully before investing or sending money This and other important information about an investment company can be found in the fund’s prospectus. To obtain a Cavanal Hill Funds prospectus or summary prospectus, please call 800-762-7085 or visit us at Please read it carefully before investing.

Cavanal Hill Investment Management, Inc. is an SEC registered investment adviser and a wholly-owned subsidiary of BOK Financial Corporation, a financial holding company (“BOKF”). BOKF, NA serves as the custodian for the Cavanal Hill Funds. Cavanal Hill Investment Management, Inc. provides investment advice, administration and other services for the Funds and receives a fee for providing such services as fully described in the prospectus. The Funds are distributed by Cavanal Hill Distributors, Inc. a registered Broker/Dealer, member FINRA and wholly-owned subsidiary of BOKF.

You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

Commentary provided is for the indicated period and is designed to provide a fame of reference. It does not constitute investment advice. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. The opinions expressed herein reflect the judgment of the authors at this date and are subject to change without notice and are not a complete analysis of any sector, industry or security. This document contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the Cavanal Hill Funds, the securities and credit markets and the economy in general. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “plans,” “projects,” variations of such words and similar expressions are intended to identify such forward-looking statements. Management judgments relating to and discussion of the value and potential future value or performance of any security, group of securities, type of security or market segment involve judgments as to expected events are are inherently forward-looking statements. Management judgments relating to and discussion of the value and potential future value or performance of any security, group of securities, type of security, group of securities, type of security or market segment involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expressed, implied, or forecasted in such forward-looking statements. The potential realization of these forward-looking statements is subject to a number of limitations and risks, which are described in the Fund’s prospectuses, and investors or potential investors, are cautioned to review the Funds’ prospectuses and the description of such risks. Neither the Funds not the Funds’ investment adviser, Cavanal Hill, undertake any obligation to update, amend, or clarify forward-looking statement, whether as a result of new information, future events or otherwise.

Not FDIC Insured | No Guarantee | May Lose Value
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