INVESTMENT OBJECTIVES
Safety
Liquidity
Yield
AGENDA
Highlights Benchmarks Portfolio & Fed Funds Rate Treasury Yield Curves Economic Conditions Strategy Sub-portfolios Composition by Sub-portfolio Return by Sub-portfolio Portfolio Composition Flight to Quality Since ‘07
HIGHLIGHTS
FY 2014 FY 2013
Earnings $9,429,390 $8,589,967
Effective Rate of Return
0.68% 0.62%
Average Daily Balance
$1,395,059,858 $1,390,495,017
BENCHMARKS
Benchmark FY 2014 Variance FY 2013 Variance
Portfolio 0.68% 0.62%
3-Month Treasury 0.04% 0.64% 0.06% 0.56%
6-Month Treasury 0.07% 0.61% 0.10% 0.52%
ML 0-1 Treasury Index 0.11% 0.57% 0.13% 0.49%
1-Year Treasury 0.11% 0.57% 0.14% 0.48%
2-Year Treasury 0.40% 0.28% 0.29% 0.33%
Effective Federal Funds 0.09% 0.59% 0.13% 0.49%
Committee Benchmark 0.30% 0.38% 0.21% 0.41%
ECONOMIC CONDITIONS
Improving labor market Moderate GDP growth Modest inflation Strong U.S. dollar Plunging oil prices US QE tapering complete QE in Japan and Europe Geopolitical risk
STRATEGY
Approximately 90% of portfolio in Treasuries and money market mutual funds
Match maturities to cash flow
Maximize yield: Longer-term investments Roll down the yield curve Agencies and CDs
SUB-PORTFOLIOS
Current Operating Maximum maturity of 13 months All authorized investment types
Intermediate Operating 3-year monthly ladder - Treasuries
Noncurrent Operating 5-year monthly ladder - Treasuries
Debt Service Reserve Bond covenants Maturities less than one year Treasuries and money markets
COMPOSITION BY SUB-PORTFOLIO
The Noncurrent and Intermediate sub-portfolios represented 48% of
investments…but generated 91% of returns.
RETURN BY SUB-PORTFOLIO
FISCAL YEAR 2014
Sub-portfolioAverage Book
Value EarningsRate of Return
Current Operating $ 644,339,220 $ 722,181 0.11%
Intermediate Operating 195,418,421 1,210,914 0.62%
Noncurrent Operating 478,528,689 7,397,179 1.55%
Debt Service Reserve 76,773,528 99,159 0.13%
Total $1,395,059,858 $9,429,433 0.68%
Roll down the yield curve trades added $1.8 million in capital gains to earnings and 13 basis points to the rate of return.
FY 2014 ANNUAL INVESTMENT REPORT
The 2015 effective rate of return?
Interest Earned $9.4 million
Effective Rate of Return 0.68%
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