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Page 2 of 4 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />also includes restrictions on investments to exclude investment in companies in fossil fuel extraction, <br />refining, and distribution industries or subindustries, as classified by a global standard taxonomy such as <br />the Global Industry Classification Standard or Bloomberg Industry Classification System. There were also <br />minor clean-up items included in the annual update to the policy. There are no current or planned fossil <br />fuel holdings in the City’s investment portfolio. With the recent Russian invasion of Ukraine, it should <br />also be noted that Redwood City holds no investments that are Russian owned or located in Russia. <br />The attached report represents all areas in which City invests funds, excluding trust funds and bond <br />proceeds held with a trustee. <br />ANALYSIS <br />The attached investment report indicates that as of December 31, 2021, funds (excluding cash with fiscal <br />agents) from all sources were producing an annual earnings rate of 1.06%, down from 1.26% as of <br />September 30, 2021. The market value of the portfolio as of December 31 was $319,055,894, up from <br />$285,850,072 as of September 30, 2021. The increase of $33.2 million, or 11.6%, is primarily due to the <br />receipt of property tax revenues from the County in December. The investment balance of $319.1 million <br />includes the funds held in the San Mateo County Treasurer’s investment pool and with the State <br />Treasurer’s investment pool. All of these investments comply with the City’s investment policy. The City <br />has sufficient liquid resources available to meet expenditure requirements for the next six months. <br />The portion of the City’s portfolio that is managed by PFM has a total market value of $160,341,831, down <br />from $161,483,148 as of September 30, 2021. As of December 31, the portfolio was earning an annual <br />yield at cost of 1.32%, down from 1.38% as of September 30, and the yield at market was 0.96%, up from <br />0.61% as of September 30. <br />The market benchmark, selected with consultation from the City Council Finance/Audit Subcommittee, is <br />the Bank of America Merrill Lynch (BofA ML) 1-5 year U.S. Treasury Index. Below is a table summarizing <br />the City’s portfolio performance compared to the benchmark, for the period ending December 31, 2021. <br />Portfolio/Benchmark <br />Total Return <br />Quarter Ended <br />12/31/21 <br />(net of fees) <br />Total Return <br />Since Inception <br />(12/31/16) <br />(net of fees) <br />Effective <br />Duration <br />(years) <br />Redwood City -0.73%2.06%2.49 <br />BofA ML 1-5 year U.S. <br />Treasury Index <br />-0.68%1.88%2.58 <br />The fourth quarter 2021 investment market themes were: <br />COVID-19 caseloads reach record highs as the Omicron variant emerges as the dominant strain <br />The U.S. economy is characterized by: <br />o Rapidly increasing inflation <br />6.A. - Page 2 of 47 <br />6