Title
Receive and Accept the Treasurer's Report of Investments for the Quarter Ending September 30, 2016.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Receive and Accept the Treasurer's Report of Investments for the Quarter Ending
September 30, 2016.
SUMMARY:
Government Code Section 53646 (b) (1) states the Treasurer may submit a quarterly report of investments. The attached exhibits provide a narrative portfolio review of economic and market conditions that support the investment activity during the July - September period, the investment portfolio position by investment type, a listing of historical Monterey County Treasury Pool yields versus benchmarks, and the investment portfolio by maturity range.
DISCUSSION:
During the July - September quarter, U.S. Treasury rates rose on the shorter end of the yield curve as market expectations for a rate hike this year inched up based on speeches by Fed officials and the Federal Open Market Committee (FOMC). Longer-maturity U.S. Treasury yields have fallen substantially this year over concerns about global growth and global demand given the negative yields abroad.
On September 30, 2016, the Monterey County investment portfolio contained an amortized book value of $1,118,029,849.61 spread among 82 separate securities and funds. The par value of those funds was $1,116,939,220.11, with a market value of $1,120,520,653.12 or 100.22% of amortized book value. The portfolio's net earned income yield for the period was 1.54%. The portfolio produced an estimated quarterly income of $ $4,530,360.12 which will be distributed proportionally to all agencies participating in the investment pool. The investment portfolio had a weighted average maturity of 491 days. The County Treasury outperformed all of the portfolio benchmarks due to a consistent investment strategy that uses short term debt to provide liquidity, while also taking advantage of higher rates in the 1 to 3 year investment range.
The...
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