This report examines the performance of the public funds currently invested by the Will County Treasurer’s Office. This narrative covers investment activity and performance in May 2013.

Total Investment Portfolio

The county’s total holdings at the end of May had a market value of $199.6-million. The Treasurer’s Office has invested $124.1-million (62.2%) across a variety of fixed income security types (excluding cash). The total portfolio (including cash) has a Yield-to-Maturity of 86.7 basis points (0.867%) with an average maturity of 2,219 days (6.1 years).

The office continues to draw on its investments to meet cash flow needs, a typical behavior when there is no property tax revenue. This explains why our average maturity is high. As we will discuss later, our office began distributing property taxes in May, and this will bring average maturity down to our target of 18 to 24 months.

Corporate Class C Fund

The Corporate Class C Fund is the principal operating account for the county. The Treasurer’s Office uses this fund to pay employees, vendors, and other operating liabilities.

As of May 31, 2013, the market value of the Corporate Class C Fund was $75.9-million. Yield in the Corporate Class C Fund, including cash and money markets, was 50.4 basis points.

The Treasurer’s Office began distributing real estate property taxes on May 18, 2013. Over the next six months, our office expects to invest $70-million of the county’s total levy. We will structure the investment into 14 equal portions that will mature between December 2013 and June 2014, months where the county receives no property tax distributions.

Our goal for this $70-million investment ladder is to achieve yield that is 50 basis points higher than the Six Month US Treasury Bill. As of this report, we have invested $17-million (24.3%) of the total $70-million, returning 62.8 basis points yield.

Instrument Institution Amount Yield
State of Illinois JPM $ 2,000,000 0.8000 %
Morgan Stanley UBS $ 2,000,000 0.7450
Morgan Stanley FITB $ 2,500,000 0.6700
Morgan Stanley JPM $ 1,500,000 0.6600
Bank of America JPM $ 2,500,000 0.6600
CME Group UBS $ 2,000,000 0.5260
CitiGroup JPM $ 1,000,000 0.5167
Centerpoint Energy UBS $ 1,000,000 0.5100
CitiGroup JPM $ 1,000,000 0.4800
Goldman Sachs FITB $ 500,000 0.4100
$ 17,000,000 0.6282

Treasurer’s Class C Fund

The Treasurer’s Class C Fund is the county’s capital improvements fund. The Treasurer’s Office holds proceeds from the county and township motor fuel tax, automation funds, and other revenue.

As of this report, the market value of the Treasurer’s Class C Fund was $122.7-million. Yield in the Treasurer’s Class C Fund, including cash and money markets, was 1.109%.

Benchmark Performance

When evaluating the performance of any investment, it is important to compare it against an appropriate benchmark. In the financial field, there are dozens of indices that analysts use to gauge the performance of an investment. These include the S&P 500 and the Dow Jones Industrial Average.

The Will County Treasurer’s Investment Policy sets two benchmarks against which we compare the performance of our investments.

  1. The 90-Day Average of the 1-Year Jumbo Deposit National Rate as quoted by the FDIC
  2. The 90-Day Average of the 3-Year Treasury Note as quoted by the U.S. Treasury Department

We use these two benchmarks because they closely relate to the average time we hold an investment. In January 2013, the average maturity of our portfolio was 3.6 years, with the bulk of our portfolio scheduled to mature within 18 months.

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