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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 September 30th, funds (excluding cash with fiscal <br />agents) from all sources were producing an average annual earnings rate of 3.82%, up from 3.64% as of <br />June 30, 2024. The market value of the portfolio as of September 30th was $377,426,318, down from <br />$418,846,519 as of June 30, 2024. The investment balance of $377.4 million includes the funds managed <br />by PFMAM, funds held in the San Mateo County Treasurer’s investment pool, and funds with the State <br />Treasurer’s investment pool. All these investments comply with the City’s investment policy. The City has <br />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 PFMAM has a total market value of $272,079,844 <br />as of September 30th, up from $263,150,644 as of June 30, 2024. As of September 30th, the portfolio was <br />earning an annual yield at cost of 3.55% as of September 30th, up from 3.33% as of June 30, 2024, and <br />the yield at market was 3.82% as of September 30th, down from 4.84% as of June 30, 2024. Yield at market <br />is the yield that the portfolio would be earning if the entire portfolio were purchased on September 30th, <br />using current investment costs and yields. <br />The market benchmark, selected in consultation with the City Council Finance/Audit Sub-Committee, is <br />the ICE BofA 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 September 30, 2024. <br />Portfolio/Benchmark <br />Total Return <br />Quarter Ended <br />9/30/24 <br />Total Return Since <br />Inception (12/31/16) <br />Effective <br />Duration <br />(years) <br />Redwood City 3.41%1.87%2.53 <br />ICE BofA 1-5 year U.S. <br /> Treasury Index <br />3.39%1.60%2.53 <br />The third quarter 2024 investment market themes identified by PFMAM were: <br />The U.S. economy is characterized by: <br />• A labor market that reached better balance and supports consumer activity <br />• Inflation that has made meaningful progress towards the Federal Reserve’s (Fed) 2% target, <br />although shelter costs remain a headwind <br />• Resilient economic growth and consumer spending that support the ‘soft landing’ scenario <br />Fed begins the easing cycle <br />• The Fed cut the federal funds target rate by 50 basis points (bps) to 4.75% - 5.00% at its September <br />FOMC meeting <br />• Fed officials note they have gained greater confidence the risks to their dual mandate are <br />“roughly” in balance <br />6.A. - Page 2 of 65 <br />11