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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 />ANALYSIS <br />The attached investment report indicates that as of June 30th, funds (excluding cash with fiscal agents) <br />from all sources were producing an average annual earnings rate of 3.64%, up from 3.49% as of March 31, <br />2024. The market value of the portfolio as of June 30th was $418,846,519, up from $388,202,487 as of <br />March 31, 2024. The investment balance of $418.8 million includes the funds managed by PFMAM, funds <br />held in the San Mateo County Treasurer’s investment pool, and funds with the State Treasurer’s <br />investment pool. All these investments comply with the City’s investment policy. The City has sufficient <br />liquid resources available to meet expenditure requirements for the next six months. <br />The portion of the City’s portfolio that is managed by PFMAM has a total market value of $263,150,644 <br />as of June 30, 2024, up from $256,501,703 as of March 31, 2024. As of June 30th, the portfolio was earning <br />an annual yield at cost of 3.33%, up from 3.23% as of March 31st, and the yield at market was 4.84%, up <br />from 4.72% as of March 31st. Yield at market is the yield that the portfolio would be earning if the entire <br />portfolio were purchased on June 30th, using current investment costs and yields. <br />The market benchmark, selected in consultation with the City Council Finance/Audit Sub-Committee, is <br />the ICEBofA 1-5 year U.S. Treasury Index. Below is a table summarizing the City’s portfolio performance <br />compared to the benchmark, for the period ending June 30, 2024. <br />Portfolio/Benchmark <br />Total Return <br />Quarter Ended <br />6/30/24 <br />(net of fees) <br />Total Return Since <br />Inception (12/31/16) <br />(net of fees) <br />Effective <br />Duration <br />(years) <br />Redwood City 0.87%1.42%2.48 <br />ICEBofA 1-5 year U.S. <br /> Treasury Index <br />0.82%1.20%2.52 <br />The second quarter 2024 investment market themes identified by PFMAM were: <br />The U.S. economy is characterized by: <br />Moderating economic growth following two quarters of exceptional strength <br />Recent inflation progressing on a path towards the Federal Reserve (Fed)’s 2% target <br />Labor markets continuing to show strength while unemployment has ticked up modestly <br />Resilient consumer spending supported by wage growth that is outpacing inflation <br />Federal Reserve pushes out rate cuts <br />Fed revises expectations from 3 rate cuts in 2024 to 1 by year end following a lack of progress in <br />the fight against inflation <br />Market continues to expect 1 or 2 rate cuts in 2024 <br />Fed officials note that the risks to its “dual mandate” of stable inflation and maximum <br />employment are becoming more balanced <br />6.B. - Page 2 of 65 <br />16