Title
Receive and Accept the Treasurer's Report of Investments for the Quarter Ending
September 30, 2017.
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, 2017.
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, treasury yields continued to slowly move upward in response to the Fed's efforts to normalize policy by raising the interest rates. However, current inflation and growth expectations are keeping longer term yields relatively low. Despite the impact of the Hurricanes in the 1st quarter, inflation pressures continue to decline from levels at the beginning of the year and the labor market remains strong. The unemployment rate went down to 4.2%, hitting the lowest level in more than 16 years and the average hourly earnings, an important gauge of wage growth, grew 2.9% over the past 12 years providing a positive outlook for a future rate hike.
On September 30, 2017, the Monterey County investment portfolio contained an amortized book value of $1,291,399,877.18 spread among 116 separate securities and funds. The par value of those funds was $1,291,516,016.16, with a market value of $1,289,937,988.14 or 99.9% of amortized book value. The portfolio's net earned income yield for the period was 1.25%. The portfolio produced an estimated quarterly income of $ 4,012,209.73 that will be distributed proportionally to all agencies participating in the investment pool. The investment portfolio had a weighte...
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