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A Division of U.S. Bancorp Asset Management, Inc.
For Institutional Investor or Investment Professional Use Only – This material is not for inspection by, distribution to, or quotation to the general public City of Hayward
Portfolio Update to the Council Budget and Finance Committee March 18, 2026
Monique Spyke, Managing Director
Attachment I
I. Economic &
Market Update
Conflict In Iran Pushes Oil Higher
3Source: Bloomberg Finance L.P., as of 3/6/2026. Oil Shock is $15 for U.S. and $20 for Europe, reflecting gas exposure. $87.61
$50
$60
$70
$80
$90
Mar-25 Jun-25 Sep-25 Dec-25 Mar-26
Price of Oil
WTI crude oil futures, $/barrel
0.3%
0.0%
0.5%
-0.3%
0.5%
-0.3%
-0.4%
-0.3%
-0.2%
-0.1%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
Inflation GDP
Economic Impact of Oil At $80 a
Barrel
US Euro Area UK
-48
42 67
108
13 -20
64 -70
76 -140
41 -17
126
-92
-200
-150
-100
-50
0 50
100
150
200
Jan-25
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Jul-25
Aug-25
Sep-25
Oct-25
Nov-25
Dec-25
Jan-26
Feb-26
Thousands
Monthly Change In
Nonfarm Payrolls
Fed’s Dual Mandate
4Sources: Bureau of Labor Statistics and Bloomberg Finance L.P. as of February 2026. 2025 Monthly Avg. 15k
2.4%
2.5%
0%
1%
2%
3%
4%
5%
Feb-24
May-24
Aug-24
Nov-24
Feb-25
May-25
Aug-25
Nov-25
Feb-26
Consumer Price Index (CPI)
Year-Over-Year Changes
CPI (YoY) Core CPI (YoY)
Fed Target: 2%
3.4%
0.8%
3.6%
3.3%
1.9%
-0.6%
3.8%
4.4%
1.4%
-6%
-4%
-2%
0%
2%
4%
6%
8%
2023Q4 2024Q1 2024Q2 2024Q3 2024Q4 2025Q1 2025Q2 2025Q3 2025Q4 U.S. Real GDP Contributors and Detractors
Personal Consumption Fixed Investment Private Inventories Net Exports Gov't Expenditures U.S. Real GDP Contributors and Detractors
5Source: Bloomberg Finance L.P., Bureau of Economic Analysis, as of February 2026.
U.S. Treasury Yields
6Source: Bloomberg, as of March 6, 2026.
3.69%
3.56%
3.59%
3.72%
4.15%
4.77%
3.0%
3.5%
4.0%
4.5%
5.0%
3M 2yr 3yr 5yr 7yr 10yr 20yr 30yr
U.S. Treasury Yield Curve
12/31/2024 12/31/2025 3/6/2026
5.74%
5.37% 5.33%
6.31%
0%
2%
4%
6%
8%
U.S. Treasury
Agency
ABS
Corp A-AAA
Corp BBB
1-Year Return
1.12% 1.08% 1.14% 1.19%
0%
2%
4%
6%
8%
U.S. Treasury
Agency
ABS
Corp A-AAA
Corp BBB
Fourth Quarter 2025 Returns
Fixed-Income Index Total Returns
7 1-5 Year Indices
Source: ICE BofA Indices. ABS indices are 0-5 year, based on weighted average life. As of December 31, 2025.
City of Hayward
Portfolio
As of December 31, 2025
During the reporting period for the quarter ended December 31, 2025, the account(s) managed by PFM Asset Management ("PFMAM") were in compliance with the applicable investment policy and guidelines as furnished to PFMAM.
Acknowledged : PFM Asset Management, a division of U.S. Bancorp Asset Management, Inc.
Certificate of Compliance
9Note: Pre- and post-trade compliance for the account(s) managed by PFM Asset Management is provided via Bloomberg Financial LP Asset and Investment Management ("AIM").
Consolidated Summary
As of December 31, 2025
10Market values include accrued interest and cash. Yield calculations exclude funds in the CAMP Pool. Securities rated BBB+ or NR by S&P are rated A1 or better by Moody’s.
Portfolio Summary
Total
Market Value
Yield at
Cost
Yield at
Market
Average
Maturity
Long-Term Portfolio $243,183,598 4.16% 3.73% 2.94 years Short-Term Portfolio $52,348,990 4.15% 3.95% 0.38 years Total $295,532,588 4.16% 3.76% 2.49 years
U.S. Treasury
55%
Agency CMBS
13%
Municipal
2%
Corporate
17%
Asset-Backed
7%
CAMP Pool
6%
Sector Allocation
AAAm
6%
AAA
5%
AA
74%
A
11% BBB+
1%
NR
3%
Credit Quality
S&P Ratings
6%
16%
16%
19%
25%
18%
$0
$20
$40
$60
$80
Overnight 0-1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years Millions
Maturity Distribution
Short-Term Portfolio Long-Term Portfolio
NET ACTIVITY
In millions
- $18.4
- $2.7
+$4.2
+$8.2
+1.3
SELL / MATURITY
Transaction Summary (1/1/2025 – 12/31/2025)
11Trading activity 1/1/2025 – 12/31/2025
BUY
-$100 -$50 $0 $50 $100
Corporate
Asset-Backed
Agency CMBS
Municipal
U.S. Treasury
Millions
Portfolio Performance
12 Performance inception date of Long-Term Portfolio is September 30, 2012. Performance inception date of Short-Term Portfolio is September 30, 2022.
Interest earned calculated as the ending accrued interest less beginning accrued interest, plus net interest activity.
Returns for periods one year or less are presented on a periodic basis. Returns for periods greater than one year are presented on an annualized basis.
The portfolio’s benchmark is currently the ICE BofA 1-5 Year U.S. Treasury Index. Prior to 12/31/21 it was the ICE BofA 1-3 Year U.S. Treasury Index. Source: Bloomberg Financial LP.
Realized earnings include interest earned and realized gains/losses on sales.
Long-Term Portfolio – Total Return Performance
As of December 31, 2025
Market Value Basis Earnings Past Quarter 1 Year 5 Years 10 Years Interest Earned $2,227,935 $8,397,331 $20,677,482 $30,871,709 Change in Market Value $520,303 $5,544,951 $463,222 $3,309,438 Total Dollar Return $2,748,238 $13,942,282 $21,140,704 $34,181,147 Total Return
Portfolio 1.14% 6.08% 1.80% 1.96%
Benchmark 1.12% 5.74% 1.45% 1.68%
Difference +0.03% +0.34% +0.35% +0.28%
Portfolio Realized Earnings
As of December 31, 2025
Past Quarter 1 Year 5 Years 10 Years
Short-Term Portfolio $494,983 $1,835,088 na na
Long-Term Portfolio $2,085,987 $7,709,966 $17,671,029 $28,629,431 Total $2,580,970 $9,545,054 $17,671,029 $28,629,431
ECONOMY AND INTEREST RATES
► The administration has indicated it plans to
reinstitute tariffs substantially similar to
those struck down by the Supreme Court.
► Inflation remains above the Fed’s target and
labor market data is mixed.
► After delivering two 25 basis point rate cuts
in the fourth quarter, lowering the federal
funds target range to 3.50% to 3.75%, the
Fed is now taking a “wait-and-see”
approach.
► The eruption of conflict in Iran has spiked
volatility in bond and equity markets as
investors eye the expansion of conflict and
disruptions to the oil supply chain.
PORTFOLIO STRATEGY
► Remain in communication with the City
regarding cash needs and portfolio updates.
► Continue to lock in duration, as appropriate,
in the Long-Term portfolio.
► Maintain broad diversification by sector,
industry, and issuer.
► Carefully manage risk and maintain high
credit quality.
Looking Forward
13 Disclaimer
Disclaimer
The views expressed within this material constitute the perspective and judgment of U.S. Bancorp Asset Management, Inc. at the time of distribution and are subject to change. Any forecast, projection, or prediction of the market, the economy, economic trends, and equity or fixed-income markets are based upon current opinion as of the date of issue and are also subject to change. Opinions and data presented are not necessarily indicative of future events or expected performance. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. No representation is made as to its accuracy or completeness.
PFM Asset Management serves clients in the public sector and is a division of U.S. Bancorp Asset Management, Inc., which is the legal entity providing investment advisory services. U.S. Bancorp Asset Management, Inc. is a registered investment adviser, a direct subsidiary of U.S. Bank N.A. and an indirect subsidiary of U.S. Bancorp. U.S. Bank N.A. is not responsible for and does not guarantee the products, services, or performance of U.S. Bancorp Asset Management, Inc.
NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE 14