2019-08-20 CC Agenda Packet - ITEM #12 - PRESENTATION - Investment PortfolioCity of EI Segundo
Investment Portfolio Report
June, 2019
Presented By:
City Treasurer's Office
August 20, 2019
Security TVDe
Reserve Portfolio
Government
Municipal Bonds
Corp. Bonds
U P RA's
CD's
Union Bank Trust
Liquidity Portfolio
CAMP - J PAP
LAIF Immediate
LAIF Sr. Housing
LAIF - LAWA
LAIF Subtotal
Total Invested
Trust Acct. Cash
Chase Bank - Cash
Total Portfolio
June Portfolio Summary
Cost
20,125, 943.84
2,870,211.50
12 , 514, 593.62
2,970,703.00
21, 469, 400.20
59, 950, 852.16
23, 598, 039.55
5,170,412.32
1,133,460.90
61, 374.07
6,365,247.29
89,914,139-00
5,828.97
6,371,453.70
96, 291, 421.67
Market value
WAM % `field
Market
% of Total
20,188,804.34
2.75
2.14%
20.91%
2,918,932.50
3.79
2.64%
3.02%
12,607,912.73
1.88
2.43%
13.06%
2,989,675.00
0.99
2.21%
3.10%
21,504,159.60
2.42
2.34%
22.27%
60,209,484.17
2.42
2.30%
62.360101
23,598,039.55
5,170, 412.32
1,133, 460.90
61,374.07
6, 365, 247.29
90,172, 771.01
5,828.97
6,371,453.70
96, 550, 053.68
iRsie
1.00
1.00
1.00
1.00
1.61
1.00
1.00
2.48%
2.43%
2.43%
2.43%
2.43%
2.35%
0.00°l0
0.45010
2.35%
24.44%
5.36%
1.17%
0.06%
6.59010
1
93.39%
0.01010
6.60%
100.00%
Month
April
May
J une
Avg/Total *
Interest Income
I nvested Cost
8912531775
99, 869, 228
8959195968
99, 911, 324
Interest Received eived % Yield
1241736.79 1.68%
147, 848. '14 1.95%
1715101.47 2.28%
443, 686.49 1.97%
* Note: the monthly fluctuation is because interest on most bonds is paid semi-annually, with LAIF paid quarterly, and some investments paid monthly.
n
Com liace
p
Partial List of Allowable Investment Instruments for Local Agencies
Ma)dmum Ma)dmum Minimum Quality City of EI In
Investment Type Maturity Specified to of Requirements Segundo Compliance
Portfolio Investments YIN
Local Agency 5 years 10% None 3.02% Y
Bonds
U. S Treasury o
Obligations 5 years None None 0.0010 Y
US Agency o
Obligations
5 years None None 20.91% Y
Negotiable
Certificates of 5 years 30% None 22.27% Y
Deposit
Medium Term
Notes 5 years 15% "A" Rating 13.06% Y
Collateralized
5 years None None 0.00%Y
Bank deposits
Local Agency
Iniestment Fund NIA None None 6.59% Y
(LAIF)
SUPRA Nationals 5 years 10% "A A A" Rating 3.10% Y
Commercial 5 years 10% "A -1/A" Rating 0.00% Y
Paper
Joint Powers NIA 30% Multiple 24.44% Y
Authority Pool
Additional Compliance
Investment Type: Medium Term Notes, Su ranationals, CD's & Commercial Paper - As of: June 30, 2019
IADB-INTER-AMERICAN DEV
TOTAL
Mabmum
Minimum
S&P
City of EI
In
-
Investment Type
Issuer
% of
Quality
Rating
Segundo
Compliance
MARKET VALUE
BANK
TOTAL
Portfolio
Requirements
Investments
YIN
Supranational Obl.
Medium Term Notes
TOTAL
15%
"A" Rating
13.06%
Y
12,607,913
Medium Term Notes
AMAZON.COM
3%
"A" Ratinq
AA-
0.52%
Y
504,470
Medium Term Notes
AMERICAN HONDA FINANCE
3%
"A" Rating
A
1.03%
Y
998,025
Medium Term Notes
APPLE INC
3%
"A" Rating
AA+
0.52%
Y
504,950
Medium Term Notes
BANK OF AMERICA
3%
"A" Rating
A-
0.52%
Y
499,915
Medium Term Notes
BANK OF NEW YORK MELLON
3%
"A" Ratinq
A
0.52%
Y
502,750
Medium Term Notes
BARCLAYS BANK PLC
3%
"A" Ratinq
A
0.52%
Y
498,505
Medium Term Notes
CATERPILLAR FINANCIAL SVCS
3%
"A" Rating
A
0.52%
Y
504,335
Medium Term Notes
CISCO SYSTEMS
3%
"A" Rating
AA-
1.04%
Y
1,002,570
Medium Term Notes
DANAHER CORP.
3%
"A" Rating
A
0.52%
Y
500,995
Medium Term Notes
HSBC USA, INC.
3%
"A" Rating
A
0.51%
Y
490,275
Medium Term Notes
IBM CORPORATION
3%
"A" Ratinq
A
0.45%
Y
430,515
Medium Term Notes
JOHNS HOPKINS HEALTH SYS
3%
"A" Rating
AA-
0.15%
Y
146,373
Medium Term Notes
MICROSOFTCORP
3%
"A" Ratinq
AAA
0.52%
Y
499,405
Medium Term Notes
NEW YORK LIFE GLOBAL
3%
"A" Rating
AA+
0.52%
Y
500,940
Medium Term Notes
ORACLE CORPORATION
3%
"A" Rating
A+
1.03%
Y
998,160
Medium Term Notes
PACCAR FINANCIAL CORP
3%
"A" Rating
A+
0.53%
Y
508,360
Medium Term Notes
TOYOTA
3%
"A" Rating
AA-
0.53%
Y
510,110
Medium Term Notes
TOYOTA MOTOR CREDIT CORP
3%
"A" Ratinq
AA-
0.52%
Y
498,955
Medium Term Notes
WAL-MART STORES INC
3%
"A" Ratinq
AA
0.52%
Y
505,610
Medium Term Notes
WALT DISNEY CO
3%
"A" Ratinq
A
0.52%
Y
498,090
Medium Term Notes
WELLS FARGO & COMPANY
3%
"A" Rating
A+/A-
1.56%
Y
1,504,605
Supranational Obl.
TOTAL
10%
"AAA" Rating
3.10%
Y
2,989,675
Supranational Obl.
IADB-INTER-AMERICAN DEV
TOTAL
10%
"A -11A" Rating
0.00%
Y
-
Commercial Paper
3%
"AAA" Rating
AAA
2.58%
Y
Y
-
BANK
TOTAL
30%
22.27%
2,488, 270
Supranational Obl.
IBRD -INTERNATIONAL BANK
TOTAL
30%
24.44%
Y
23,598,040
JPAP
3%
"AAA" Rating
AAA
0.52%
Y
Y
23,598,040
FOR RECON & DEV
501,405
Municipal Bonds
TOTAL
10%
"A" Rating
3.02%
Y
2,918,933
Municipal Bonds
GOODRICH MICH
3%
"A" Ratinq
AA
0.32%
Y
306,246
Municipal Bonds
LA QUINTA CA REDEV
3%
"A" Rating
AA-
1.06%
Y
1,021,740
Municipal Bonds
LAS VEGAS NEV
3%
"A" Ratinq
AA
0.58%
Y
564,457
Municipal Bonds
OREGON ST DEPT ADMIN
3%
"A" Ratinq
AAA
0.53%
Y
514,175
Municipal Bonds TULSA CNTY' OKLA INDP 3% "A" Rating AA 0.53% Y 512,315
Commercial Paper
TOTAL
10%
"A -11A" Rating
0.00%
Y
-
Commercial Paper
3%
"A -11A" Rating
A-1+
0.00%
Y
-
CD'S
TOTAL
30%
22.27%
Y
21,504,160
Joint Powers Auth.
Pool
TOTAL
30%
24.44%
Y
23,598,040
JPAP
CAMP
30%
24.44%
Y
23,598,040
City of EI Segundo - Treasury Department
Continuing Education Tracking - As of June 30,2019
Reauirement YTD Hours Excess/(Deficit) Notes
Treasurer 5.00 25.60 20.50 OIOA 3119+CMTA 4119
Deputy City Treasurer 11 5.00 29.60 24.60 OIOA 3119+CMTA 4119
Deputy City Treasurer I 5.00 12.00 7.00 CM -FA 1119 + others
Portfolio Asset Allocation
SUPRA's, 2,989,61
Municipal Bonds,
2,918,933
Gov't Obligations,
20,188,804
INVESTMENTS BY SECURITY TYPE)
Cash Immediate,
CD's, $21,504,160
mior Housing,
,133,461
74
CAMP - JPAP,
$23,598,040
$25,000,000.00
$ 20,000,000.00
$15,000,000.00
$10,000,000.00
$ 5,000,000.00
$0.00
SecuritiesbyMaturity
Investments by Maturity Date ■ Par Value
RIO
'J" J S� S
S
Al 4ak Oay Oay yeas
x o �'o
4
5 3 ea�� -ko hA!P
US Treasury Yield Curve
US Treasury Bands Yield Curve as of 6/28/19 (+8/12)
3.00
2.80
2.60
2.40
�
2.43
p
2.44
2.40 2.27
2.20
� 2.21 � 2.23
2.18
2.12
7.09
2.00
L.Vy
f
1.9Z
d
c
2.00
1.80
1.94 1.75
1.71
-A
1.76
1.75
1.60
l
1.55
1.49
1.40
S
1.20
1.00
IMO
3 Mo
6 Mo 1 Yr 2 Yr
3 Yr 5 Yr
--0-3/29/2019 --W-6/28/2019 8/12/2019
3.00
2.50
2.00
1.50
1.00
0.50
MCI
Daily Treasury Yield Curare Rates
r
I m o 3mo 6 m o 1 yr 2 yr 3 yr 5 yr
12/31/2016 12/29/2017 -12/31/2018
3/29/2019 - 6/28/2019 — 8/12/2019
3/29/2019
2.43
2.40
2.44
6/28/2019
2.18
2.12
2.09
8/12/2019
2.09
2.00
1.94
1 yr
0.25
0.65
Daily Treasury Yield Curve Rates
Date
12/31/2014
12/31/2015
12/31/2016
12/29/2017
12/31/2018
1 mo
0.03
0.14
0.44
1.28
2.44
3 mo
0.04
0.16
0.51
1.39
2.45
6 mo
0.12
0.49
0.62
1.53
2.56
3/29/2019
2.43
2.40
2.44
6/28/2019
2.18
2.12
2.09
8/12/2019
2.09
2.00
1.94
1 yr
0.25
0.65
0.85
1.76
2.63
2.40
1.92
1.75
2 yr
0.67
1.06
1.20
1.89
2.48
2.27
1.75
1.58
3 yr
1.1
1.31
1.47
1.98
2.46
2.21
1.71
1.51
5 yr
1.65
1.76
1.93
2.20
2.51
2.23
1.76
1.49
New Investment YieIdsys. Treasury Yield Curve
3.50
3.00
2.69
2.65 '
2.50 �_2.55 !S9*
2.45'.44 i
2.40
2.27
2.21
2.04 • 1.95
1,92 • 1,85
1`7'5 1.71
1,54
1.00
0,00
9 am
Y 2 3 4 5
Duration —5-6/2812019 —C-3/2412019 0 YTM @ Cost
# 2.80
2.60
2.60
2..73.;
0 2.45 z.3Z
`�
11.11
2.05 2.0s2.00
2.05 2.23
1.95-q
1,74
1.76
Y 2 3 4 5
Duration —5-6/2812019 —C-3/2412019 0 YTM @ Cost
25,000,000
19 ��1 9IM
90M
I
Cash Flow Analysis
Rolling 12 Month Cash Flow Analysis
-$-Total Receipts
-WTotal Disbursements
Jul -18 Aug -18 Sep -18 Oct -18 Nov -18 Dec -18 Jan -19 Feb -19 Mar -19 Apr -19 May -19 Jun -19
10,000,000
8,000, 000
6,000,000
4,000, 000
2,000,000
FS
(2,000,000)
(4,000, 000)
(6,000,00Q)
(8,000,000)
(10,000,000)
(12,000,000)
Net Change in Cash
Rolling 12 Month Net Change in Cash
-4-FY-2017/2018
f Fr -2018/2019
Current Activity
• From April 1— June 30 — Purchased 23 CD's for $5,590,000, 4 Municipal
Bonds for $2,300,000, 6 Agency Bonds for $6,500,000, 4 Corporate Bonds
for $2,000,000 and one SUPRA for $1,000,000. We had 3 Agency Bonds
for $2,500,000 mature, 2 Corporate Bonds for $1,000,000 mature, and 5
CD's for $1,225,000 mature.
• Since June 30th, we purchased 13 CD's for $3,171,000, 1 Municipal Bond
for $1,000,000 and 3 Agency Bonds for $3,000,000. We had 2 Corporate
Bonds for $1,000,000 and 2 CD's for $490,000 mature during this time.
We also had 3 Agency bonds for $2,188,000, 1 Corporate Bond for
$500,000 and 1 CD for $245,000 called during this time.
• Net Change in rate on invested vs. matured Securities for FY2019 is +
0.414%. (Purchases yield of 2.199% vs. Matured yield of 1.785%).
• Net Change in investments for FY2019 is $10,903,000.
• We are actively managing bank balances, LAIF, CAMP and short term
investments to maximize interest income.
2.15
2.1
2.05
2
1.95
0
L
0 1.9
1.85
1.
1.75
1.7
Economic Indicators
Average GDP Projections
2019 2020 2021 Longer run
June projection —0— March projection
4.
3.
3.
3.
3.
Unemployment
01118 03/18 05/18 07118 09118 11118 01119 03119 05119 07119
1 onih
3.5
3.0
2.5
2.0
9�
1.5
1.0
0.5
MI
Inflation Rates by Month *2015 2019
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average Fed Funds Rate Projections
3.00
2.50
2.00
9 1.50
1.00
0.50
FIN
Current Rate 2019 2020 2021 Longer run
June projection 4-- March projection
Are we in a recession yet? Here are 12 ways to know
Doug Whiteman, MSN 8116119
Item
Indicator
Indicator Activitv
Recent measure
Recession Likely
1 Consumers start to lose confidence
Consumer Confidence Index
15% drop Y over Y
July, 18 year high
N
2 Interest Rates get weird
Yield Curve
Inverted Yield Curve
Inverted in parts
Y
3 Unemployment shoots higher
Unemployment rate
3110th of 1% increase over 12 month low
1110th increase June -July
N
4 Factories become quieter
Institute for Supply Mgt. index
Below 45
51.2.
N
5 Temps find fewer opportunities
Temp Staffing
4% fewer jobs than last year
Strongest this year
N
6 Workers stop calling it quits
JOLTS -Job Openings and Labor Turnover Survey
Higher is better
Highest since Great Recession, but has leveled off
N
7 Sales of new cars shift into a lower gear
Unit Sales
sales peak just before a downturn
lately sales have been slowing
Y
8 Stocks go on a losing streak
Stock Indexes
Drop of 20% or more over time
Volatile
?IN
9 Credit card debt and late payments rise
credit card delinquency rates
Rise in delinquencies
Highest in 7 years at 5.2% 90 days past due
Y
10 Homebuilding cools off
Building permits
Inconclusive
Depends on many factors
N
11 Inflation heats up
12 The timing just seems right for a recession
Inflation Rate
Time since last recession
Quick rise in rate
E)pand/Contract cycle
Lower than desired
10 years +
N
Y?
http://www. ms n. comlen-us/money/markets/are-we-in-a-recession-yet-here-are-12-ways-to-know/ss-AAFTcYp?li=B BnbfcN&ocid=iehp