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HomeMy WebLinkAbout2016 02 08 Awards and Presentations 100 Other, documents related to Awards and Presentations 100 Date: February 8, 2016 The attached information relates to Awards and Presentations "100" on the February 8, 2016 City Commission Regular Meeting. Annual Investment Inc,,rrnralcd Performance Review 194U • - * As of September 30, 2015 affiz- C PFM The PFM Group Public Financial Management,Inc. PFM Asset Management LLC PFM Advisors Investment Advisors PFM Asset Management LLC Steven Alexander,CTP,CGFO,Managing Director 300 S.Orange Avenue One Keystone Plaza,Suite 300 Richard Pengelly,CFA,Director Suite 1170 North Front&Market Streets Robert Cheddar,CFA,Managing Director Orlando,FL 32801 Harrisburg,PA 1 71 01-2044 D.Scott Stitcher,CFA,Director (407)648-2208 717-232-2723 Michael Stewart,Senior Analyst (407)648-1323 fax 717-233-6073 fax 0 2016 PFM Asset Management LLC Summary of Investments The City's portfolios are well diversified and include Bank Deposits, Money Market Mutual Funds, the Florida Prime, U.S. Treasuries, Federal Agencies, Commercial Paper and Municipal securities. The Portfolios weighted average Yield to Maturity at Cost as of September 30, 2015 was 0.43%, exceeding the Bank of America Merrill Lynch 1 Year U.S. Treasury Note Index Yield of 0.36% by 7 basis points (0.07%). The City made 3 deposits into the General City Account Portfolio during the fiscal year totaling $8.9 million. The City made 1 withdrawal from the Portfolio during the month of March totaling $1 million. The PFM Managed General City Account Portfolio received $271 ,275 in interest earnings for the fiscal year. This was an increase of $35,612 over the previous fiscal year. Over the past year, 1-year and 2-year U.S. Treasury yields rose by 21 and 6 basis points, respectively. On the other hand, 3-year U.S. Treasury yields fell over the past four quarters, finishing the year 14 basis points lower. Second quarter gross domestic product (GDP) grew at a 3.9% annualized pace, a strong rebound from the first quarter's lackluster growth of 0.6%. The surge was bolstered by strong consumer spending and a pickup in business investment and inventories. More recent economic data suggests the U.S. economy is slowing from the strong second quarter pace. ©2016 PFM Asset Management LLC 2 t t u PAUL FW11CIS ! vc L. r S'ince 1979 ALAN REENSPAN 9EN k� JAWT YELLEN .A.wc,w -, 6, 1979 Amp.st 11, 1487 re-6rwary 1, Z[06 F,-6rwary 1, 201k to ivrms`= f1, f987 to Janwory 31, 2006 to kanwar-y 31, 2014 pvt-'sent ©2016 PFM Asset Management LLC 3 The FOMC Raises Rates A range of recent labor market indicators, including ongoing job gains and declining unemployment, shows further improvement Toll MI I I " and confirms that underutilization of labor resources has diminished appreciably since early this year. Inflation has continued to run below the Committee's 2% longer- run objective, partly reflecting declines in energy prices and in prices of non-energy imports . . . Some survey-based measures of longer-term inflation expectations have edged down . . . [the Committee] is reasonably confident that inflation will rise, over the medium term, to its 2% objective. Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 0.25— 0.50% . . . the stance of monetary policy remains accommodative. In light of the current shortfall of inflation from 2%, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate. Source:Federal Reserve. U.S. Treasury Rates Have Risen Short maturity yields rose in the months leading up to the Fed rate hike decision in December and rose only modestly after the announcement; however, low inflation and modest growth expectations have kept long-term yields subdued, resulting in a flatter yield curve. U.S. Treasury Yield Curve Yield Curve History 4.00% 9/30115 12/31/15 3.50% - -- -- - 1-Mo. 0.02 -0.02 0.13 3.00% - - 3-Mo. 0.04 -0.02 0.17 2.50% 6-Mo. 0.12 0.07 0.48 2.00% 1.50% J 1-Yr. 0.22 0.31 0.60 1.00% 2-Yr. 0.67 0.63 1.05 0.50% 3-Yr. 1.07 0.90 1.31 0.00% - -- - --- 5-Yr. 1.65 1.36 1.76 -0.50% 7-Yr. 1.97 1.74 2.09 361 2 3 5 7 10 30 m„y y y y y y y 10-Yr. 2.17 2.04 2.27 December 31,2015 September 30,2015 -December 31,2014 30-Yr. 2.75 2.85 3.02 Source:Bloomberg GDP Growth is Slowing U.S. GDP slowed in the third quarter, growing at a revised 2.0% according to final estimates by the Bureau of Economic Analysis. Third quarter growth was led by gains in consumer spending, state and local government spending, but a drop in private inventory investment was the main contributor for the downward revision in Q3 GDP. U.S. Real GDP 6% , Bloomberg -o 5 a) Survey of "- 3.9% Economists mD 4% C c ¢0 3% N 2.1% 2.0% ' 2% a 0 1 /0 0.6% 0 0 (Di 0 U) c 1% CO L U -2% 0 o -3% a -4% N M a al N , M N M N CO -'t r N M ala a aia a a 00 a a a a a a a a a a a 2011 201 2 2013 2014 2015 2016 Source:Bureau Of Economic Analysis;Bloomberg survey results as of 1213112015. Summary of Balances Market Value Market Value Investments (includes Accrued (includes Accrued Interest) Interest) September General City Account Portfolio $39,320,731.60 $31,260,099.83 Fidelity Institutional Money Market Fund 79,609.29 55,030.25 Government Portfolio Florida Prime 216,210.00 165,825.05 Bank of America Cash for Operation - N/A 1,946,421.43 depository 5/3 Bank Cash for Operations-depository 3,311,527.28 1,524,442.61 Water& Sewer 2000 - Fidelity Institutional 716,946.62 716,874.93 Money Market Fund Government Portfolio Water& Sewer 2000— Florida Prime 6,374.96 4,813.64 Total $43,651,399.75 $35,673,507.74 ©2016 PFM Asset Management LLC 7 General City Account Portfolio as of 09/30/2015 Portfolio Composition S&P Credit Quality AA Federal 2.04% Agency Obligations U.S. 56.89% A-1+(Short- U.S. Treasuries 8.39% 15.26% A-1 (Short- term) Increased AA+ 19.06% Money 70.51 Market Fund/Cash 0.20% Municipal Commercial / Obligations Paper 2.03% 25.62% High Credit Quality 100% 90% Portfolio Maturity Distribution' 0 80% a 70% Ladder Current Portfolio Fa 60% 0 50% 40% 35.2% 37.3% Yield to Maturity at Cost 0.48% o 30% 27.3% 0 20% Effective Duration 0.80 Years d 10% 0.2% 0% 0 . 0.0% Overnight Under 6 Months 6-12 Months 1 -2 Years 2-3 Years 1.Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date,although they may be called prior to maturity. 8 General City Account Portfolio as of 09/30/2014 Portfolio Composition S&P Credit Quality Money U.S. AA Market Treasuries 3.12% Fund/Cash 47 78% 0.18% AA+ A-1+(Short- Municipal 78.33% term) Obligations 5.44% 3.11% !(A-1 (Short- term) Commercial 13.12% Paper 18.52% Federal Agency Diversification Obligations 30.41% High Credit Quality 100% 0 90% Portfolio Maturity Distribution' 0 80% 70% Portfolio 60% 0 50% 46.6% (D 34.7% Yield to Maturity at Cost 0.32% 0) 40% m 30% 18.5% 20% Effective Duration 0.97 Years 0 10/0 0.2% 0.0% 0% --! =- I s , — Overnight Under 6 Months 6-12 Months 1 -2 Years 2-3 Years 1.Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date,although they may be called prior to maturity. 9 All Investments as of 09/30/2015 Florida'City of Winter Springs, Money Market 5/3 Bank-Cash Mutual Funds for Operations 0.69% 732% United States State and/or Treasury Local _ Securities Government Debt_----— 13.99% 1.87% I Commercial Paper Federal 23.53% -- — Instrumentalities 5211% Amortized Cost Allocation Permitted In Security Type (Includes interest) Percentage Notes by Policy Compliance United States Treasury Securities 6,003,279.99 13.99% 100% YES United States Government Agency Securities 0.00% 75% YES Federal Instrumentalities 22,397,084.61 52.21% 80% YES Mortgage-Backed Securities 0.00% 0% YES Certificates of Deposit/Savings Account 0.00% 25% YES Repurchase Agreements 0.00% 50% YES Commercial Paper 10,092,831.58 23.53% 30% YES Corporate Notes-FDIC Insured 0.00% 50% YES Bankers'Acceptances - 0.00% 30% YES State and/or Local Government Debt 800,439.08 1.87% 20% YES Money Market Mutual Funds 295,819.29 0.69% 100% YES Intergovernmental Investment Pool - 0.00% 25% YES Bank of Amenca-Cash for Operations 0.00% 3 100% YES 513 Bank-Cash for Operations 3,311,527.28 7.72% 3 100% YES Odes: 1.japes not Include bond proceeds. 2.End of month trade-dale arnortized cos.&Dort` *ho dirgs.includ,rig a trued merest. 3.k{anaped by the City ©2016 PFM Asset Management LLC All Investments as of 09/30/2015 City of Winter Springs, Florida' Asset Allocation as of September i t Amortized Cost Allocation Permitted In Individual Issuer Breakdown (Includes Interest) Percentage Notes by Policy Compliance Government National Mortgage Association(GNMA) 0.00% 50% YES Federal Farm Credit Bank(FFCB) 2,298,688-43 5.36% 25% YES Federal Home Loan Bank(FHLB) 8,724,035-08 20.34% 25% YES Federal National Mortgage Association(FNMA) 6,705,330.54 15.63% 25% YES Federal Home Loan Mortgage Corporation(FHLMC:i 4,669,030-56 10.88% 25% YES State of Louisiana Municipal Bonds 800,439.08 1.87% 20% YES Bank of Tokyo Mitsubishi. Inc. Commercial Paper 1,499,504-16 3.50% 10% YES BNP Paribas Commercial Paper 1,498,766.67 3.49% 10% YES Canadian Imperial Commercial Paper 1,498,115-00 3-49% 10% YES General Electric Company Commercial Paper 1,599,907-55 3.73% 10% YES JP Morgan Chase&Company Commercial Paper 1,499,433.33 3.50% 10% YES Toyota Motor Corporation Commercial Paper 998,659.45 2.33% 10% YES UBS AG Commercial Paper 1,498,445.42 3.49% 10% YES Fidelity Institutional Money Market Fund-Gov't 79.609.29 0.19% 25% YES Money Market Fund -Florida Prime(SBA) 216.210.00 0.50% 3 25% YES Notes: 1.Does not include bond oroceeds. 2.End of r %h trade-date amortized cost of porftio holdings.including accrued mtenas=- ?.Managed by the City. =.ylu ©2016 PFM Asset Management LLC Disclaimer This material is based on information obtained from sources generally believed to be reliable and available to the public, however PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. All statements as to what will or may happen under certain circumstances are based on assumptions, some but not all of which are noted in the presentation. Assumptions may or may not be proven correct as actual events occur, and results may depend on events outside of your or our control. Changes in assumptions may have a material effect on results. Past performance does not necessarily reflect and is not a guaranty of future results. The information contained in this presentation is not an offer to purchase or sell any securities. ©2016 PFM Asset Management LLC