HomeMy WebLinkAbout2010 02 22 Informational 102 Investment Report For The First Quarter Fiscal Year 2010 COMMISSION AGENDA
CONSENT
INFORMATIONAL X
ITEM 102 PUBLIC HEARING
REGULAR
February 22, 2010 MGR /DEPT K V
Meeting Authorization
REQUEST: The City Manager providing the Investment Report for the first quarter FY
2010 (ending December 31, 2009) as prepared by PFM Asset Management
LLC.
SYNOPSIS:
Distribution of the investment report for the quarter -ended December 31, 2009.
CONSIDERATIONS:
The City's General City Account portfolio is of high credit quality and maintains adequate
liquidity. The portfolio is invested entirely in federal agencies, U.S. Treasuries, and FDIC
guaranteed corporate securities. The securities are allocated among high quality issuers rated
AAA. PFM's attached report provides additional information regarding the City's investment
position at December 31, 2009.
FISCAL IMPACT:
The $17,500 annual fee charged by PFM is a budgeted expense in the FY 2010 Finance General
Budget. The weighted average yield at December 31, 2009 is 0.67 %.
COMMUNICATIONS:
None.
RECOMMENDATION:
It is recommended that the City Commission receive the attached investment report.
ATTACHMENTS:
Investment Report for quarter -ended December 31, 2009
City of Winter Springs
Investment Pcrf rye In#
Quarter T:ndccd -.)ect.-. ,i'c 31, )0r)
4.1 imuN
E5 CO
L. OR104
Investment Advisors PFM Asset Management LLC
Steven Alexander, CTP, CGFO, Managing Director 300 S. Orange Avenue, Suite 1170 One Keystone Plaza, Suite 300
Mel Hamilton, Senior Managing Consultant Orlando, FL 32801 North Front & Market Streets
David Jang, CTP, Senior Managing Consultant (407) 648 -2208 Harrisburg, PA 17101 -2044
Gregg Manjerovic, CFA, Portfolio Manager (407) 648 -1323 fax 717 - 232 -2723
Rebecca Dole, Consultant 717 - 233 -6073 fax
City of Winter Springs Investment Report - Quarter Ended December 31, 2009
Table of Contents
Tab I.
Section A Market Review
Tab II.
Section B Executive Summary and General City Account Portfolio Performance
Section C Asset Allocation Chart
Tab Ill. December 31, 2009 PFM Month -End Statement
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 recommendation. The information
contained in this report is not an offer to purchase or sell any securities.
Table of Contents Section i
City of Winter Springs Investment Report — Quarter Ended December 31, 2009
Total returns for actively managed, fixed- income portfolios outpaced The steepening of the yield curve was further augmented by the continued
benchmarks in the fourth quarter, adding to exceptional outperformance for downward pressures on short-term rates and the growing upward pressure on
the year. Active management strategies added to outperformance in a period long -term rates. Interest rates for maturities under a year were little changed
of near - record low interest rates, when every extra dollar of earnings meant during the quarter, anchored by the FOMC's commitment to its target rate of
more to investors facing extraordinary economic pressures. zero to 0.25%. Intermediate -term rates are caught in a tug of war between the
Fed Funds target rate and the upward pressure exerted by positive economic
Careful duration management, strategic placement of investments along the releases and investors' growing reluctance to buy newly issued Treasury
yield curve, and active sector management all contributed to returns both in debt. These forces pushed the 10 -year Treasury yield to a 4 -month high of
the quarter and in the year. For both the quarter and the year, PFM generally 3.84% in late December, a 53 basis point increase since September 30. 2-
managed durations defensively to minimize the risk of market value loss year Treasury yields rose only 19 basis points, held in check by the Fed's
if /when rates rise, and to under - weight investments that have significant accommodative policy.
credit or liquidity risk.
The high levels of new and outstanding U.S. Treasury debt and the market's
INTEREST RATES AND RETURNS ability to absorb it present a continuing weight on the market.
Interest rates rose for all but the shortest maturities in the fourth quarter. The table below displays the change in yields over the past quarter.
Longer -term rates rose more than short- and intermediate -term rates, causing Maturity 3m 6m 1 yr 2 yr 3 yr 5 yr 10 yr 30 yr
the yield curve to reach record steep levels for the second time in 2009. A
steep yield curve is typical at this point in the business cycle, when a September 30 , 0.11% 0.17% 0.39% 0.95% 1.42% 2.31% 3.29% 4.03%
2009
recovery has just begun, but has not yet gained a firm foothold. One measure December 31, 0.05% 0.19% 0.44% 1.14% 1.68% 2.67% 3.83% 4.62%
of the yield curve's steepness is the spread (or difference in yield) between 2009
year and 10 -year Treasury yields. This spread hit a historically wide level in Change over o 0 0 0 0 0 0 0
May, which was eclipsed at the end of December when the spread hit a Quarter - 0.06 /0 0.02 /0 0.05 /0 0.19 /0 0.25 /0 0.36 /0 0.53 /0 0.58 /o
record 2.85% as shown in the following chart.
Spread Between 2 - Year and 10 - Year U.S. Treasury Note Yields Duration
December 1, 2008 — December 31, 2009 With more visible evidence that the economy is in a recovery phase, PFM's
3.0%
duration management strategy has taken on a shorter bias over the past
several quarters in anticipation of rising interest rates. Shortening duration
will mitigate the negative impact on market values if /when rates resume their
2.5%
1 climb back to historical averages. This strategy proved itself during the
quarter as benchmark portfolios with shorter durations outperformed those
that were longer. For example, as the chart on the following page shows, the
2.0% 1 -3 year Treasury benchmark outperformed the longer- duration 3 -5 year
benchmark by 11 basis points in the fourth quarter. Benchmark returns defied
the usual rule that "longer is better" for the year as well.
1.5%
1.0%
Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09
Source: Bloomberg
PFM Asset Management LLC Section A - 1
City of Winter Springs Investment Report — Quarter Ended December 31, 2009
Merrill Lynch U.S. Treasury Indices quarters, negatively impacting the sectors performance. To protect portfolios
Prior Quarter and 12 -Month Average Returns as of December 31, 2009 from this possibility, PFM maintained higher than normal allocations to
Treasuries, using careful security selection and active management.
1.00%
0.78% When we did purchase Agencies, we generally increased purchases of
callable Agencies due to their potential to earn greater income as longer -term
0.50% ! rates remain in a narrow trading range. PFM's strategic purchases of
Treasuries, along with our allocation to callable Federal Agencies, produced
0.21% 023i° returns in excess of benchmarks.
0.04% 0.03%
0.00% Investment -grade corporate notes continued their fourth quarter of
�
o.os °i
N outperformance as spreads contracted further. The prolonged contraction of
corporate spreads signals a further reversal of the flight -to- quality the market
-0.50% 028% saw last December. The following chart shows that corporates rated "AAA"
■Quarter 1 Year to "A" have outperformed Treasuries and Agencies in the past quarter and
-0.67% the past 12 months as corporate spreads compressed with investors increased
- 1.00%
appetite for credit risk. The spread of 2 -year "AA" Corporate notes to
3mo 1 -3yr 1 -5yr 3-5yr Treasuries contracted 31 basis points (0.31%) during the quarter.
Source: bferrill Lynch
Duration - Adjusted Returns* of Merrill Lynch 1 -3 Year Indices
Quarterly & Last 12 Months Returns as of December 31, 2009
Sector Allocation
14%
Appropriate sector allocation also contributed to portfolio returns. The ■Quarter 11.64%
dramatic narrowing of spreads between Treasuries and Agencies in the first 12 /°
Last 12 Months
three quarters of the year meant that there was little additional value to be 10%
gained in the fourth quarter from investing heavily in Federal Agency
securities. For example, on a duration - adjusted basis, 1 -3 year Agency 8%
benchmarks returned 1.62% (annualized) more than Treasuries in the first 6%
nine months of the year, but only 37 basis points more in the fourth quarter.
4%
Despite their already narrow level, in December the spread between 2.09% 1.37%
Agencies and Treasuries fell further after the U.S. Treasury announced 2%
0.03i 0.78% 0.12% > ;
amendments to its program intended to boost the housing market. Changes 0% — -
included removing the cap on the Treasury's funding of Freddie Mac and TSY AGY AAA/AA/A Corp.
Fannie Mae and lengthening the timeline for these Agencies to reduce their Source: Merrill Lynch
mortgage portfolios. Although most of the outperformance in the Agency
sector was wrung out when spreads hit their prior low levels in September 'Duration- adjusted return incorporates an adjustment to the market value return (but
not the income return) of each benchmark to account for their varied durations,
2009, this announcement sent spreads even lower. The spread between 2- making it easier for investors to assess the relative risk and return of benchmarks of
year Treasuries and 2 -year Agencies fell to 7 basis points (0.07 %) by the end different length.
of the year. At this very low level, Agency spreads could widen in coming
PFM Asset Management LLC Section A - 2
City of Winter Springs Investment Report — Quarter Ended December 31, 2009
Although corporate notes had higher returns over the past quarter and year, mortgage and consumer debt losses by financial firms, along with
PFM has been hesitant to add investments in this sector because these returns unprecedented borrowing by the federal government, mean credit available
were produced in a still risky economic environment. to businesses and consumers will continue to be constrained in the near term.
This will likely hinder the pace of economic growth and private sector hiring.
THE ECONOMY
On the housing front, sales of new and existing homes increased dramatically
in the fourth quarter, boosted by a federal tax credit for first -time
The economy displayed tentative signs of expansion during the quarter, homebuyers and mortgage rates held low by Federal Reserve purchases of
though growth was at best modest and occurred following more than a year
of sustained contraction. Data released in December showed that GDP Federal Agency debt. It remains to be seen if housing market activity will
expanded 2.2% in the third quarter of 2009. However, recent growth has continue to accelerate following the expiration of this federal support. The
depended, to a large extent, on government stimulus, as well as an increase in deterioration of housing prices slowed as demand for housing picked up in
exports fueled by a weaker dollar. According to Christina Romer, chair of the the fourth quarter. This news has been interpreted by many as a sign that the
President's Council of Economic Advisers, without programs such as "Cash housing market is stabilizing, though some analysts remain concerned that
for Clunkers" and a tax credit extended to first -time homebuyers, "GDP the necessary correction in home values has not been allowed to occur fully.
would have risen little, if at all." Most economists estimate that fourth The Federal Open Market Committee (FOMC) met twice during the quarter,
quarter GDP will show growth near 4 %, with continued reliance on leaving the Federal Funds target rate unchanged. The Committee remained
government stimulus; resulting in a tepid recovery when compared with the focused on strengthening economic growth and fostering a return to higher
pace of growth in the early stage of other recent recoveries. levels of resource utilization. Inflation continued to be a remote concern
The unemployment situation also appeared to improve, modestly, in the during the quarter, as recent readings have been low and significant resource
fourth quarter. In November, the economy actually added jobs for the first slack remains.
time since December 2007. However, in December, 85,000 jobs were cut, The FOMC's post- meeting statements affirmed that the target rate would be
illustrating that the labor market has not yet healed. Jobless claims continued kept at 0% — 0.25% for "an extended period," citing low rates of resource
their downward trend throughout the quarter, with initial claims at their utilization, subdued inflation trends, stable inflation expectations, and
lowest since July 2008, and continuing claims at their lowest since February elevated unemployment. Resource utilization has been steadily increasing at
2009. However, the reduction in jobless claims does not capture the large factories, but is still far below historical averages for an expanding economy.
number of workers who are receiving extended jobless benefits or have The contraction of credit has slowed, but lending remains constrained,
exhausted all assistance. Furthermore, at year -end the unemployment rate hindering the pace of recovery. Although banks hold $1 trillion in excess
still stood at 10% and those unemployed or working part-time for economic reserves, they are not lending.
reasons comprised an astonishing 17% of the labor force. Most sectors
continued to lose jobs, with notable exceptions in government and Over the next several quarters the Fed is likely to take action to shrink its
healthcare. Going forward, labor market improvement will depend balance sheet and remove some of its emergency liquidity and market
increasingly on the pace of job creation in the private sector. The expansion stabilization programs. A major challenge for the Fed will be the timing and
of activity in both the manufacturing and service sectors during the fourth speed at which these programs are unwound. If the Fed unwinds these
quarter was an encouraging sign, but has yet to translate into job creation, as programs and begins raising interest rates too quickly, it could impair the
most improvement appears to have been the result of increased worker recovery and hamper growth: on the other hand, inflation hawks fear that by
productivity. Consumer spending and business investment remained waiting too long to act, the Fed could stoke inflation.
historically weak, despite improving confidence levels, and corporations and
small businesses remained reluctant to hire additional workers. Continued
PFM Asset Management LLC Section A - 3
City of Winter Springs Investment Report — Quarter Ended December 31, 2009
OUTLOOK
The interest rate outlook is quite murky because the strength of the current
economic recovery is still uncertain. In past recoveries, a very steep yield
curve has preceded several quarters of rapid growth, followed by a leveling -
off of economic activity, sharp rises in short-term rates and modest increases
in those intermediate- and long -term rates. Investors face two competing
forces: (I) the steep yield curve that provides incentive to invest out longer,
and (2) the risk that interest rates will rise, hurting returns and values on
longer- duration investments.
However, the weakness of the current recovery may prolong the low interest
rate environment, especially in light of the Fed's strongly stated intention to
remain on hold "for an extended period."
If the low interest rate environment persists, portfolio yields will continue to
deteriorate as securities with high yields, purchased in past years and in
better markets, mature. Investors looking for ways to improve income should
temper expectations for above - market total returns and investment income in
the near future. Not only will investment income be hampered by the low
level of interest rates, but the inevitable rise in interest rates will erode
portfolio market values.
In all events, interest rate movements will likely be modest until the recovery
gains traction and the Fed begins to unwind its emergency support programs.
During this period, short- and intermediate -term interest rates are likely to be
range- bound; however, when the Fed begins to reverse course, rates could
move quickly upward, causing intermediate- and longer -term portfolio
returns to be low, and perhaps negative, because the low level of rates
provides little to no cushion against the market value erosion that results
from rising rates. The steep yield curve does provide some protection for
returns and portfolio values against rising rates. Longer -term investments
provide a greater income cushion (resulting from higher rates) and they may
gain in value as they roll down the yield curve, but strong increases could
more than offset this benefit.
With credit spreads at low levels, we will rely more strongly on active
duration management and yield curve placement in coming quarters to
implement our portfolio strategies.
PFM Asset Management LLC Section A - 4
City of Winter Springs Investment Report - Quarter Ended December 31, 2009
Executive Summary
PORTFOLIO STRATEGY
The City's General City Account portfolio is of high credit quality and maintains adequate liquidity. The portfolio is invested entirely in federal agencies,
U.S. Treasuries, and FDIC guaranteed corporate securities. The securities are allocated among high quality issuers rated AAA.
• At the December FOMC meeting, the Fed acknowledged improving economic conditions, slowing job losses, and increasing household spending. As
a result, the Fed will begin rolling back stimulus measures and will allow the Fed's special liquidity facilities to expire on February 1, 2010. Despite
these positive signs, the Fed still points to high unemployment and resource slack as barriers to a full recovery.
The 3 -month U.S. Treasury Bill remained near historic lows this quarter, even dropping to 0.01% in mid - November. Rates ended the quarter slightly
higher at 0.05 %. At the December 16th meeting, the FOMC reaffirmed that "economic conditions... are likely to warrant exceptionally low levels of the
federal funds rate for an extended period" and left the target rate unchanged at the range of 0 %- 0.25 %. Short term rates, anchored to the low target
range set by the Fed, are likely to remain low for an extended period as well.
> The General City Account Portfolio continues to provide the City with favorable yield relative to the benchmark. At quarter end, with interest rates
hitting all time lows, the portfolio had a Yield to Maturity at Cost of 1.12 %, exceeding the average Yield to Maturity of its benchmark the Merrill Lynch 6
Month U.S. Treasury Bill Index by 96 basis points (96 %).
• PFM will continue to follow the prudent investment strategies that have safely provided the City with favorable yield and maintained adequate liquidity
during this period of significant market and economic turmoil.
• We believe 2010 will continue to provide challenges during a protracted recovery. With interest rates remaining low to begin the year and a possible
increase in rates during the year, we anticipate that returns will be low in the coming quarters. We will closely monitor the markets for opportunities to
safely enhance the portfolio's yield by taking advantage of pricing differences that develop between different sectors, maturities, and issuers.
• The yield curve remains steep and a lot of value can be gained by purchasing longer dated securities. We will continue to work with the City to
monitor cash flow needs. If liquidity needs permit, we will invest in the 9 -12 month range in order to capitalize on the yield advantage offered by the
steepness of the current yield curve.
PFM Asset Management LLC Section B - 1
City of Winter Springs Investment Report - Quarter Ended December 31, 2009
The City's Investment Statistics
Amortized Cost "' Amortized Cost'" Market Value "' Market Value'" Duration (Years)
Account Name December 31, 2009 September 30, 2009 December 31, 2009 September 30, 2009 December 31, 2009
General City Account Portfolio $19,389,453.21 $18,126,789.11 $19,458,495.62 $18,226,633.35 0.95
Fidelity Institutional Money Market Fund Government Portfolio (Fund #257) 8,622,298.92 4,491.209.39 8,622,298.92 4.491.209.39 0.003
Money Market Fund - State Board of Administration Pool A 0.29 1.22 0.29 1.22 0.088
Money Market Fund - State Board of Administration Pool B 970,929.14 1,011.932.21 970,929.14 1,011,932.21 N/A
Bank of America Cash for Operation - depository 2,998,958.33 1,504.712.71 2,998,958.33 1.504,712.71 0.003
Water & Sewer 2000 - Fidelity Institutional Money Market Fund Government Portfolio (Account #364) 716,512.66 716,494.79 716,512.66 716,494.79 0.003
Water & Sewer 2000 - Money Market Fund - State Board of Administration Pool A 0.01 0.03 0.01 0.03 0.088
Water & Sewer 2000 - Money Market Fund - State Board of Administration Pool B 28,178.92 29,368.94 28,178.92 29.368.94 N/A
Water & Sewer Series 1992 Refunding Revenue Reserve - BONY 1,305,069.93 1,305.069.93 1,305,069.93 1.305,069.93 0.003
Total $34,031,401.41 $27,185,578.33 $34,100,443.82 $27,285,422.57
Yield to Maturity Yield to Maturity Yield to Maturity Yield to Maturity
on Cost' on Cost° at Market at Market Duration (Years)
Account Name December 31, 2009 September 30, 2009 December 31, 2009 September 30, 2009 September 30, 2009
General City Account Portfolio 1.12% 1.09% 0.69% 0.48% 0.77
Fidelity Institutional Money Market Fund Government Portfolio (Fund #257) 0.01% 0.01% 0.01% 0.01% 0.003
Money Market Fund - State Board of Administration Pool A 0.21% 0.37% 0.21% 0.37% 0.088
Money Market Fund - State Board of Administration Pool B 0.00% 0.00% 0.00% 0.00% 6.690
Bank of America Cash for Operation - depository 0.30% 0.30% 0.30% 0.30% 0.003
Water & Sewer 2000 - Fidelity Institutional Money Market Fund Government Portfolio (Account #364) 0.01% 0.01% 0.01% 0.01% 0.003
Water & Sewer 2000 - Money Market Fund - State Board of Administration Pool A 0.21% 0.37% 0.21% 0.37% 0.088
Water & Sewer 2000 - Money Market Fund - State Board of Administration Pool B 0.00% 0.00% 0.00% 0.00% 6.690
Water & Sewer Series 1992 Refunding Revenue Reserve - BONY 0.00% 0.00% 0.00% 0.00% 0.003
Weighted Average Yield 0.67% 0.75% 0.42% 0.34%
Benchmarks December 31, 2009 September 30, 2009
6 Month U.S. Treasury Bill Index' 0.16% 0.14%
Notes
1. On a trade -date baste, including accrued interest
2. In order to comply veth GASB accrual accounting reportng requirements. forward settling trades are included in the monthly balances.
3. Excludes any money market fund/cash balances held in custodian account.
4. Past performance is not indicative of future results.
5. Source Bloomberg.
PFM Asset Management LLC
Section B - 2
City of Winter Springs Investment Report - Quarter Ended December 31, 2009
General City Account Portfolio Composition and Credit Quality Characteristics
Security Type' December 31, 2009 % of Portfolio September 30, 2009 % of Portfolio
U.S. Treasuries $3,907,124.07 20.08% $1,305,249.30 7.16%
Federal Agencies 10,986,461.38 56.46% 12,357,483.38 67.80%
Commercial Paper 0.00 0.00% 0.00 0.00%
Certificates of Deposit 0.00 0.00% 0.00 0.00%
Bankers Acceptances 0.00 0.00% 0.00 0.00%
Repurchase Agreements 0.00 0.00% 0.00 0.00%
Municipal Obligations 0.00 0.00% 0.00 0.00%
Corporate Notes /Bonds 0.00 0.00% 0.00 0.00%
Corporate Notes /Bonds - FDIC Insured 4,564,910.17 23.46% 4.563,900.67 25.04%
Mortgage Backed 0.00 0.00% 0.00 0.00%
Money Market Fund /Cash 0.00 0.00% 0.00 0.00%
Totals $19,458,495.62 100.00% $18,226,633.35 100.00%
Portfolio Composition Credit Quality Distribution 3
as of 12/31/09 as of 12/31/09
U.S. _
Treasuries
20% �\ Federal /,,
Agency AAA
`Obligations 80% /
1 57%
\ ,
TSY
Corporate `" 20%
Notes /Bonds -
FDIC Insured
23%
Notes
1. End of quarter trade -date market values of portfolio holdings, including accrued interest.
2. Credit rating of securities held in portfolio, exclusive of money market fund.
3. A rating of "TSY" indicates the security is an obligation of, or explicitly guaranteed by the U. S. Government.
PFM Asset Management LLC Section B - 3
City of Winter Springs Investment Report - Quarter Ended December 31, 2009
General City Account Portfolio Maturity Distribution
Maturity Distribution' December 31, 2009 September 30, 2009
Overnight (Money Market Fund) $0.00 $0.00
Under 6 Months 4,347,484.68 7,337,841.14
6 - 12 Months 4,750,143.95 3,096,266.96
1 - 2 Years 9,064,378.94 7,792,525.25
2 - 3 Years 1,296,488.05 0.00
3 - 4 Years 0.00 0.00
4 - 5 Years 0.00 0.00
5 Years and Over 0.00 0.00
Totals $19,458,495.62 $18,226,633.35
Portfolio Maturity Distribution'
50% 47%
43% DDecember31, 2009
45` ! 400/0
40% i DSeptember30, 2009
.2 35%
o
-t 30%
o 24%
25% 22%
o 20% 17%
0 15%
cu
ca 10% 7%
0
v 5 /o 0% 0% 0% 0% 0% 0% 0% 0% 0%
0%
Overnight Under 6 Months 6 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years 5 Years and Over
Notes'
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.
PFM Asset Management LLC Section B - 4
City of Winter Springs, Florida' Asset Allocation as of December 31, 2009*
#
Security Type December 31, 2009 December 31, 2009 Notes Permitted by Policy Asset Allocation
United States Treasury Securities 3,906,934.66 1222% 100% as of December 31. 2009
United States Government Agency Securities - 0.00% 75%
Federal Instrumentalities 10.961,611.77 34.27% 80% Corporets -FDIC
I nmrcd
Federal Instrumentalities
Certificates of Deposd - 0.00% 25% 34 27 °6 1 -- - �li ll "n
Repurchase Agreements - 0.00% 50%
Commercial Paper - 0.00% 30% .
Corporate Notes - FDIC Insured 4,520,906.78 14.14% 50%
Mortgage - Backed Securities - 0.00% 0% -- - -- -
Bankers' Acceptances - 0.00% 30% United States Tre:ssur'r A1uncc hlarl.cl Mutual Funds
State and/or Local Govemment Debt (GO and Revenue) - 0.00% 20% Securities TI` T :0.00°0
12.22 °., _ I
Money Market Mutual Funds 9.593228.35 30.00% 2 100%
Bank of America Cash for
Intergovernmental Investment Pool - 0.00% 25% Operation
Bank of America Cash for Operation 2,998,958.33 9.38% 2 100% 9.3kf a
Individual Issuer Breakdown December 31, 2009 December 31, 2009 Notes Permitted by Policy Individual Issuer Breakdown December 31, 2009 December 31, 2009 Notes Permitted by Policy
Govemment National Mortgage Association (GNMA) - 0.00% 50% CD - Bank A 0.00% 15%
US Export-Import Bank (Ex-1m) - 0.00% 50% CD - Bank B - 0.00% 15%
Farmers Home Administration (FMHA) - 0.00% 50% Fully collateralized Repo - A - 0.00% 25%
Federal Financing Bank - 0.00% 50% Fully collateralized Repo - B - 0.00% 25%
Federal Housing Administration (FHA) - 0.00% 50% CP A - 0.00% 10%
General Services Administration - 0.00% 50% CP B - 0.00% 10%
New Communities Act Debentures - 0.00% 50% General Electric Corporate Notes - FDIC Insured 1,508,313.12 4.72% 25%
US Public Housing Notes & Bonds - 0.00% 50% JP Morgan Chase Corporate Notes - FDIC insured 1.508,821.32 4.72% 25%
US Dept. of Housing and Urban Development - 0.00% 50% Bank of America Corporate Notes - FDIC insured 1903,772.34 420% 25%
Federal Farm Credit Bank (FFCB) - 0,00% 25% Corporate Notes - FDIC insured D - 0.00% 25%
Federal Home Loan Bank (FHLB) 4,158.565.50 1900% 25% Corporate Notes - FDIC insured E - 0.00% 25%
Federal National Mortgage Association (FNMA) 3,688,920.32 11.53% 25% BA Bank A - 0.00% 10%
Federal Home Loan Mortgage Corporation (FHLMC) 3,114,125.95 9.74% 25% BA Bank B - 0.00% 10%
Student Loan Marketing Association (SLMA) - 0.00% 25% BA Bank C - 0.00% 10%
Municipal Notes /Bonds - 0.00% 20%
Fidelity Institutional Money Market Fund Government Portfolio (Fund #257) 8,622,298.92 26.96% 2 25%
Money Market Fund - State Board of Administration 970929.43 3.04% 2 25%
Notes
1. Does nal include bond proceeds.
2. Managed by the CM.
PFM Asset Management LLC
Section C - 1