Cavanal Hill Money Market Funds Quarterly Commentary

1Q 2024

Market Overview

Over the past 12 months, money market fund assets have soared $778 billion, or 13.8% to a record $6.4 trillion as of the end of March 2024, according to Money Fund Intelligence.1 Of that, retail funds rose by $531.5 billion (29.2%), and institutional funds increased $236.7 billion (6.4%). A Moody’s Investors Service report predicted that, although interest rates will probably fall this year, geopolitical uncertainties will likely propel an additional increase in money fund assets. The major challenge facing the industry this year, however, is correctly judging the extent and timing of interest rate cuts by the Federal Reserve Open Market Committee (FOMC).

Positioning the Fund

Portfolio composition is subject to change

Federal funds futures indicate that the FOMC is expected to lower the federal funds target rate more than once this year. At issue is the extent and timing of those cuts. As a result, we have added some positions further out on the interest rate curve in both our Government Securities Money Market Fund and our U.S. Treasury Fund. In the Government Securities Money Market Fund, we also hold positions in Agency floating rate notes. These earn a spread above the Secured Overnight Funding Rate. In both funds, we have sizable positions in overnight repurchase agreements (repos), which serve to keep yield levels current with the added benefit of daily liquidity.

Why should investors consider investing in this fund?

The staggering increase in money market fund assets in recent years attests to the value investors perceive in the asset class. With daily liquidity and competitive yields, they are an unmatched corporate liquidity tool and offer valued portfolio diversification.

1
(2024). Money Fund Intelligence [Review of Money Fund Intelligence]. Crane Data, 19(1)
Disclosures

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 www.cavanalhillfunds.com. 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 frame 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 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 nor 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.

If you’d like additional information about this or any of the Cavanal Hill Funds, please contact Craig McQueen at 303.355.2799, CraigMcQueen@cavanalhill.com, or cavanalhillfunds.com.

Not FDIC Insured | May Lose Value | No Bank Guarantee

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