Title
Receive and Accept the Treasurer's Report of Investments for the Quarter Ending March 31, 2019.
Report
It is recommended that the Board of Supervisors:
Receive and Accept the Treasurer's Report of Investments for the Quarter Ending March 31, 2019.
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 January-March period, the investment portfolio position by investment type, and the investment portfolio by maturity range.
DISCUSSION:
During the January-March quarter, interest rates fluctuated between small gains and small declines throughout most of the period, ultimately ending the quarter with yields down across the curve following a steady decline after the Federal Reserve's March meeting. Yields fell despite a recovery in the equity markets. Longer maturity yields fell more than shorter maturities and in mid-March, the 3-month to 10-year part of the yield curve inverted for a brief period, renewing concerns about a possible recession in the near future. The Federal Reserve held short-term rates unchanged at the current target range of 2.25% to 2.50% at their January and March meetings. They also shifted to a "patient" stance on future rate actions and have implied there will be no additional Federal Reserve rate hikes in 2019. U.S. equities recovered from the sell-off last quarter and had their best quarter in at least a decade during the third quarter.
On March 31, 2019, the Monterey County investment portfolio contained an amortized book value of $1,674,993,180 spread among 158 separate securities and funds. The par value of those funds was $1,683,748,934 with a market value of $1,672,221,350 or 99.8% of amortized book value. The portfolio's net earned income yield for the period was 2.32%. The portfolio produced an estimated quarterly income of $9,...
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