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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 2014.
Total Investment Portfolio
The county’s total holdings at the end of May had a market value of $218.6-million. The Treasurer’s Office has invested $161.3-million (73.7%) across a variety of fixed income security types (excluding cash). The total portfolio (including cash) has a Yield-to-Maturity of 1.31% with an average maturity of 1,773 days (4.8 years).
The sharp improvement in the portfolio yield is the result of two events during the month.
The first event was strengthening performance in Corporate Bonds. At the end of May, Corporate Bonds in our portfolio had a market value of $38.1-million, a $2.3-million gain during the period. The percentage of Corporate Bonds in our portfolio rose to 18% of holdings versus 16.6% of holdings in April. Some of the grown came from investment of the county’s portion of the real estate levy. However, the bulk of the growth was market return in the Treasurer’s Class C Fund.
The second event was our negotiation for higher rates for cash on deposit with local banks. Local banks accept large cash deposits because they have strong demand for loans. In order to attract large deposits to fund lending, banks are willing to pay a higher return. We believe improving lending is an indicator of strengthening consumer and commercial economic activity in Will County.
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 28, 2014, the market value of the Corporate Class C Fund was $98.8-million. Yield in the Corporate Class C Fund, was 55.3 basis points—the result of a 41% concentration in money market cash holdings. This is a large cash position for us, but normal at the beginning of real estate tax collection.
Over the next seven months, our office will collect and distribute approximately $1.72-billion on behalf of nearly 360 individual taxing districts in Will County. The County itself is a taxing district. We invest $70-million to provide our office with the cash necessary to cover payroll and accounts payable between December and May each year. We began the process with two investments worth $13.1-million.
|Commercial Paper||Bank of America||$ 1,500,000||0.4600 %|
|Commercial Paper||CitiGroup||$ 1,000,000||0.4100|
|Commercial Paper||CitiGroup||$ 1,000,000||0.4470|
|Commercial Paper||Goldman Sachs||$ 1,000,000||0.3700|
|Commercial Paper||Goldman Sachs||$ 1,000,000||0.4170|
|Commercial Paper||Morgan Stanley||$ 2,500,000||0.5090|
|Corporate Bond||Comcast||$ 1,000,000||0.4370|
|Municipal Bond||Crete School District||$ 50,000||0.4200|
|Municipal Bond||Troy School District||$ 260,000||0.9490|
|Municipal Bond||Northern Illinois Power||$ 800,000||0.4500|
|Municipal Bond||State of Illinois||$ 2,000,000||0.7000|
|Municipal Bond||Rosemont School Dist||$ 500,000||0.8500|
|Total||$ 13,110,000||0.5126 %|
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 May 28, 2014, the market value of the Treasurer’s Class C Fund was $105.6-million. Yield in the Treasurer’s Class C Fund, including cash and money markets, was 2.09%. As we discussed earlier, the portfolio benefitted from significant improvement in the Corporate Bond Market during May. The concentration of Corporate Bonds in the Treasurer’s Class C Fund jumped to 11% of all holdings in May. Corporate Bonds represented 9.9% of holdings in April.
The Treasurer’s Office also negotiated new, higher rates with local community banking partners. We see this as an indication that commercial lending in local Will County banks was strong in the first quarter of the year, a positive economic indicator.
The Will County Treasurer’s Investment Policy sets two benchmarks against which we compare the performance of our investments.
- The 90-Day Average of the 1-Year Jumbo Deposit National Rate as quoted by the FDIC
- 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.