Executive Summary

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 June 2014.

Total Investment Portfolio

The county’s total holdings at the end of June had a market value of $238.5-million. The Treasurer’s Office has invested $186.8-million (78.3%) across a variety of fixed income security types (excluding cash). The total portfolio (including cash) has a Yield-to-Maturity of 1.27% with an average maturity of 1,656 days (4.5 years).

The investment portfolio continues to benefit from strengthening performance of Corporate Bonds. At the end of June, Corporate Bonds had a market value of $52.3-million, a net gain after investment of $1.6-million since May. The percentage of Corporate Bonds rose to 22% of holdings versus 18% in May. We will continue to invest in this asset class throughout the levy collection until we approach our policy of holding no more than a third of the portfolio’s assets in corporate bonds.

The second shift in the portfolio came as we reduced our holding in Money Market cash by 4 points. With an improvement in fixed income classes across the board, we believe it is a prudent decision to put more available cash to higher yield products such as municipal bonds.

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 June 30, 2014, the market value of the Corporate Class C Fund was $114.7-million. Yield in the Corporate Class C Fund, was 63.3 basis points—the result of a sizeable shift of funds from cash into Federal Home Loan Bank bonds. Our cash position remains high as we continue to place real estate tax revenue into fixed income securities.

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 June 30, 2014, the market value of the Treasurer’s Class C Fund was $105.7-million. Yield in the Treasurer’s Class C Fund, including cash and money markets, was 2.06%. Performance was stable during the period as the Treasurer’s office took no distribution or made no investment in the fund.

Benchmark Performance

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 length of time we hold an investment.

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