What is it All About? "Providing a Competitive Yield with Safety and Liquidity"
Investment Objectives
The State of Kansas Municipal Investment Pool (MIP) offers participants the safety of principal, liquidity, and a competitive market rate on short-term investments. All monies deposited in the MIP are promptly invested as part of the Pooled Money Investment Portfolio (Portfolio) in securities authorized by State statutes. Safekeeping and audit controls for all investments made for the Portfolio comply with State statutes and are monitored by the Pooled Money Investment Board (PMIB).
Who Can Invest?
The governing body of any Kansas county, city, township, school district, or any other governmental entity as defined in K.S.A. 12-1675 can invest funds it holds. Funds must first be offered to all eligible banks, savings and loans, and federally charted savings banks which have home offices or branches in the investing community.
Why Invest in the MIP?
Participating in the MIP is an easy way to invest excess and idle funds more effectively. Local government or agency officials maintain discretion over their investment including the amount and the maturity.
Expertise
The PMIB employs professional investment personnel who constantly monitor the major investment markets. By investing in the MIP, public entities can take advantage of this expertise at no additional expense to local taxpayers.
Back to Top
Stability
Every dollar invested today is managed to be worth a dollar (plus interest) tomorrow. The PMIB follows a strict investment philosophy of matching cash flows, thereby ensuring that each participant will have access to their funds at maturity.
High Current Rates
The pooling of monies from many local governmental units enables PMIB investment professionals to take advantage of higher yields (lower prices) offered on larger denominated securities not otherwise available to many public entities. Larger denominated securities are exempt from certain investment service charges normally assessed by banks and brokers on smaller purchases. Reduced costs and current market rates result in a better yield on MIP funds. Yields on the Fixed-Rate Investments are "locked in" for the duration of their term, while the yield on Overnight Investments will fluctuate daily with current market conditions. MIP participants are able to access the daily rates paid at https://host.treasurer.state.ks.us/kmip_rates.php.
Liquidity
Funds placed in the Overnight Investment option are available daily (withdrawals of $1 million or more require one prior business day's notice, by 3:00PM), while deposits in the Fixed-Rate Investment options are available at maturity. We realize that there may be times when unforeseen cash flow needs arise. Should this occur, the Director of Investments can authorize an early withdrawal subject to the availability of funds. In the event an early withdrawal is permitted, a penalty will be assessed.Back to Top
Security
All investments made for the Portfolio must comply with Kansas Statutes and the Investment Policy of the Pooled Money Investment Board. The Portfolio primarily consists of government securities (including U.S. Treasuries and Federal Agencies), certificates of deposit in Kansas banks, and top-rated commercial paper and corporate bonds. All of these investments present very limited risk to the investor. The maximum final maturity of any security purchased for the portfolio is four (4) years.
Investment transactions are conducted with only experienced, professional broker/dealers, qualified depositories or directly with issuers of the securities. All securities purchased are delivered to the custody of the Kansas State Treasurer, assuring a perfected interest in the securities. For safety and convenience, the Treasurer may use a custodial bank to take delivery of some securities. The MIP owns no securities itself, but rather all securities are part of the Pooled Money Investment Portfolio.
The Director of Investments manages the Pooled Money Investment Portfolio and all activities are reviewed monthly by the Pooled Money Investment Board. Additionally, the PMIB is subject to an audit every two years by the State's independent auditor.
Diversification
By combining the funds of many investors, the MIP can diversify among many authorized investments, thereby avoiding excessive concentration in securities of any one issuer. In accordance with PMIB Investment Policy, the combination of commercial paper and corporate bonds shall never exceed 60% of the total Pooled Money Investment Portfolio, and no more than 5% of that portfolio shall be invested in the commercial paper and corporate bonds of any single business entity.