Title
Receive and Accept the Treasurer's Report of Investments for the quarter ending December 31, 2013.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Receive and accept the Treasurer's Report of Investments for the quarter ending December 31, 2013.
SUMMARY:
Government Code Section 53646 (b) (1) states the Treasurer may submit a quarterly report of investments. The attached Exhibit A provides a narrative portfolio review of economic and market conditions that support the investment activity during the October - December period. Exhibit B describes the investment portfolio position by investment type as of December 31, 2013. Exhibit C is a listing of historical Monterey County Treasury Pool yields versus benchmarks. Exhibit D describes the investment portfolio by maturity range, and Exhibit E is an overview of the short term funds that the Treasurer invests in overnight, liquid assets.
DISCUSSION:
During the October to December quarter, Treasury yields continued to rise. Yield increases were more significant in the 5+ year range, while the rate increases in shorter term issues remained quite modest. The majority of the increase in yields was caused by positive economic data that generally signaled continued improvement in the U.S. economy. The preliminary U.S. GDP report in November on the June - September quarter showed a greater than expected 2.8% increase in GDP, but much of it was attributed to an increase in inventory, rather than increases in sales. In the period under review, yield spreads between Treasury, Agency and Corporate issues remained narrow. Although rates could continue to move higher, the rate for short-term investments remains near zero, which will continue the trend of very low returns in overnight funds and shorter term securities.
On December 31, 2013 the Monterey County investment portfolio contained an amortized cost basis of $1,049,985,939 spread among 80 separate securities and funds. The p...
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