1 INVESTMENT REPORT
For the Quarter Ending March 31, 2023
City of Hercules, California
CITY OF HERCULES
FINANCE DEPARTMENT
111 CIVIC DRIVE
HERCULES, CALIFORNIA 94547-1771
PHONE: 510-799-8200
May 9, 2023
Honorable Mayor and City Council:
I verified that this investment portfolio, as of March 31, 2023, conforms with all state laws and City’s investment policy. The City’s expenditures requirements for the next months are covered by anticipated revenues from City operations and liquidity from cash on deposit.
As of March 31, 2023, the City has sufficient funds to meet its expenditure requirements for the next six months.
Sincerely,
Edwin Gato
Finance Director/City Treasurer
City of Hercules, California
Investment Portfolio Summary Report
For the Quarter Ended March 31, 2023
Book % of Average Market
Value Total Yield Value
Cash on Hand $2,005 $2,005
Cash on Deposit 7,604,688 7,604,688
Total Cash on Hand 7,606,693 9.68% 0.89% 7,606,693 Local Agency Investment Fund (LAIF) 55,873,084 71.11% 2.83% 55,119,374 Irrevocable Trust (Pension) 2,107,346 2.68% 3.84% 2,107,346 Irrevocable Trust (OPEB) 2,625,363 3.34% 3.84% 2,625,364 Investments with Bond Trustees 10,359,126 13.18% 3.46% 10,359,126 Total Portfolio $78,571,612 100.00% 2.74% $77,817,903
Amount over (under) Market Value vs. Book Value ($753,709) % of Portfolio -0.96%
Investments by TypeCash on HandLAIFIrrevocable Trust(Pension)Irrevocable Trust(OPEB)Investments withTrustees City of Hercules
Detail for Investment Portfolio Summary Report
For the Quarter Ended March 31, 2023
(DAYS)
BOOK PURCHASE MATURITY LIFE TO REMAINING PAR MARKET
DESCRIPTION VALUE RATE YIELD DATE DATE MATURITY LIFE VALUE VALUE
CASH ON HAND
PETTY CASH 2,005.00 0.00% 0.00% 2,005.00 $2,005.00
CASH IN BANK
MECHANICS BANK - GENERAL CHECKING 5,256,538.85 0.00% 0.00% 5,256,538.85 5,256,538.85 MECHANICS BANK - HERCULES RDA 2,321,564.95 0.00% 0.00% 2,321,564.95 2,321,564.95 MECHANICS BANK - PD ASSET SEIZURE 6,166.10 0.00% 0.00% 6,166.10 6,166.10 CalTRUST 20,418.03 3.57% 3.57% 1/1/2023 3/31/2023 89 - 20,418.03 20,418.03 TOTAL AND AVERAGES 7,604,687.93 0.89% 0.89% 89 - 7,604,687.93 7,604,687.93
LOCAL AGENCY INVESTMENT FUND (LAIF)
LAIF 55,873,083.96 2.83% 2.83% 1/1/2023 3/31/2023 89 - 55,873,083.96 55,119,374.44
IRREVOCABLE TRUST (PENSION/OPEB)
US BANK MUTUAL (PARS-OPEB) 2,625,363.70 3.84% 3.84% 1/1/2023 3/31/2023 89 - 2,625,363.70 2,625,363.70 US BANK MUTUAL (PARS-PENSION) 2,107,345.82 3.84% 3.84% 1/1/2023 3/31/2023 89 - 2,107,345.82 2,107,345.82 TOTAL AND AVERAGES 4,732,709.52 3.84% 3.84% 89 - 4,732,709.52 4,732,709.52
INVESTMENTS WITH BOND TRUSTEES
GE CAPITAL CORPORATION 4,511.99 3.03% 3.03% 1/1/2023 3/31/2023 89 - 4,511.99 4,511.99
WEBSTER BANK (STERLING NATIONAL BANK
ESCROW) 117,616.70 0.24% 0.24% 1/1/2023 3/31/2023 89 - 117,616.70 117,616.70 THE BANK OF NEW YORK (BNY) JM 05 1 RESERVE
FUND 55,797.47 0.00% 0.00% 1/1/2023 3/31/2023 89 - 55,797.47 55,797.47
THE BANK OF NEW YORK (BNY) MELLON TRUST
HERCULES PFA WW INTEREST ACCT 21 A 2,887.50 0.00% 0.00% 1/1/2023 3/31/2023 89 - 2,887.50 2,887.50
THE BANK OF NEW YORK (BNY) MELLON TRUST
HERCULES PFA WW ACQUISITION FD 21 A 8,325,000.00 0.00% 0.00% 1/1/2023 3/31/2023 89 - 8,325,000.00 8,325,000.00
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 REVENUE FUND) 514,313.08 4.35% 4.35% 1/1/2023 3/31/2023 89 - 514,313.08 514,313.08
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 DEBT SERV PRIN ACCT)197,243.98 4.39% 4.39% 1/1/2023 3/31/2023 89 - 197,243.98 197,243.98
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 DEBT SERV INT ACCT) 183,473.65 4.39% 4.39% 1/1/2023 3/31/2023 89 - 183,473.65 183,473.65
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 RESERVE FD) 920,215.00 4.39% 4.39% 1/1/2023 3/31/2023 89 - 920,215.00 920,215.00
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES 2020 INT FD) 4,567.80 0.00% 0.00% 1/1/2023 3/31/2023 89 - 4,567.80 4,567.80
THE BANK OF NEW YORK (BNY) MELLON TRUST (SA
HERCULES 2022 A B DEBT SERVICE) - 0.00% 0.00% 1/1/2023 3/31/2023 89 - - - THE BANK OF NEW YORK (BNY) MELLON TRUST (sa
HERCULES 2022 A B INTEREST ACCT) 33,498.59 0.00% 0.00% 1/1/2023 3/31/2023 89 - 33,498.59 33,498.59 TOTAL AND AVERAGES 10,359,125.76 3.46% 3.46% 89 - 10,359,125.76 10,359,125.76 TOTAL INVESTMENT REPORT 78,571,612.17 2.74% 2.74% 89 - $78,571,612.17 $77,817,902.65 City of Hercules, California
Investment Portfolio Summary Report
For the Quarter Ended March 31, 2023
% of
Cash Description Book Value Total
Bond Trustee $10,359,126 13%
Irrevocable Trust 4,732,710 6%
Restricted 35,484,656 45%
General Fund 26,461,447 34%
Internal Service Funds 1,533,673 2%
Total, Book Value $78,571,612 100%
Restricted:
Wastewater 20,011,978
Successor Housing 4,910,310
ARPA 2,792,889
Development Impact Fees 1,958,602
Landscape & Lighting 863,479
Gas Tax & Measure J "Street" 578,988
General Plan Update 915,473
Solid Waste 881,139
Capital Projects 486,550
Agency Fund 511,811
Successor Agency 976,084
BART (Park & Ride) 319,383
Asset Seizure 228,646
Other 49,324
35,484,656
Bond Trustee 13%Irrevocable Trust 6%Restricted 45%General Fund 34%Internal Service Funds 2%Cash by Fund March 2.831
February 2.624
January 2.425
0.00007493902135155
0.986510329
LAIF Earnings Ratio(2):
LAIF Fair Value Factor(1):
PMIA Daily(1): 2.87
2.74LAIF Apportionment Rate(2):
PMIA Quarter to Date(1): 2.63
275PMIA Average Life(1):
Treasuries
64.15%
Agencies
21.72%
Certificates of
Deposit/Bank Notes
6.48%
Time
Deposits
2.74%
Commercial
Paper
4.47%
Corporate
Bonds
0.24%
Loans
0.20%
Notes: The apportionment rate includes interest earned on the CalPERS Supplemental Pension Payment pursuant to Government Code 20825 (c)(1) and interest earned on the Wildfire Fund loan pursuant to Public Utility Code 3288 (a).
Source:
(1) State of California, Office of the Treasurer
(2) State of Calfiornia, Office of the Controller
PMIA Average Monthly
Effective Yields(1)
PMIA/LAIF Performance Report
as of 03/31/23
Daily rates are now available here. View PMIA Daily Rates Quarterly Performance
Quarter Ended 03/31/23
Chart does not include $3,085,000.00 in mortgages, which equates to 0.002%. Percentages may not total 100% due to rounding.
Pooled Money Investment Account
Monthly Portfolio Composition (1)
03/31/23
$191.2 billion
City of Hercules
As of March 31, 2023
Presented By
Andrew Brown, CFA
City of Hercules ▎17
Performance Inception: 6/1/2010
The OPEB plan was invested in account 6746019207, PARS Balanced HighMark Plus, from June 1, 2010 to December 31, 2017. The Plan was then subsequently invested in account 6746050104, PARS Moderately Conservative HighMark Plus, from January 1, 2018 and onwards. Returns are gross of account level investment advisory fees and net of any fees, including fees to manage mutual fund or exchange traded fund holdings. Returns for periods over one year are annualized. The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank guarantee, and may lose value.
Quarter
to Date
(3 Months) 1 Year 3 Years 5 Years 10 Years
Inception
to Date
06/01/2010
Cash Equivalents 1.05 2.54 .87 1.28 .78 .61
Lipper Money Market Funds Index 1.07 2.59 .89 1.26 .74 .57 Total Fixed Income 2.97 -4.34 -.87 .96 1.42 2.38
Bloomberg US Aggregate Bd Index 2.96 -4.78 -2.77 .91 1.36 2.19 Total Equities 6.36 -8.66 16.94 7.44 9.25 10.33
Large Cap Funds 7.88 -9.29 18.29 10.05 11.60 12.15
S&P 500 Composite Index 7.50 -7.73 18.60 11.19 12.24 13.11 Mid Cap Funds 4.13 -8.65 19.18 7.94 8.90 10.55
Russell Midcap Index 4.06 -8.78 19.20 8.05 10.05 11.58
Small Cap Funds 3.39 -8.70 20.59 6.81 10.21 11.86
Russell 2000 Index 2.74 -11.61 17.51 4.71 8.04 9.59
International Equities 6.80 -4.11 12.47 2.46 4.22 5.20
MSCI EAFE Index 8.47 -1.38 12.99 3.52 5.00 6.22
MSCI EM Free Index 3.96 -10.70 7.83 -.91 2.00 2.96
REIT Funds 1.66 -19.81 9.38 5.59
Wilshire REIT Index 3.32 -21.33 11.03 5.66 5.89 8.44
Total Managed Portfolio 3.84 -5.19 4.43 3.17 5.18 6.48
Selected Period Performance
Hercules OPEB
Period Ending: 3/31/2023
City of Hercules ▎19
Asset Allocation – OPEB Plan
As of March 31, 2023
Current Asset Allocation Investment Vehicle
Equity Range: 20%-40% 29.16%
Large Cap Core COFYX Columbia Contrarian Core Inst3 2.79% VGIAX Vanguard Growth & Income Adm 5.47%
Large Cap Value DODGX Dodge & Cox Stock Fund 2.57%
IVE iShares S&P 500 Value ETF 1.16%
Large Cap Growth HNACX Harbor Capital Appreciation Retirement 1.64% IVW iShares S&P 500 Growth ETF 1.60%
Mid Cap Core IWR iShares Russell Mid-Cap ETF 2.56%
Small Cap Value UBVFX Undiscovered Managers Behavioral Val R6 2.10% Small Cap Growth FGROX Emerald Growth Institute 2.07%
International Core DFALX DFA Large Cap International I 2.32% International Value DODFX Dodge & Cox International Stock Fund 0.83% International Growth MGRDX MFS® International Growth R6 0.83% Emerging Markets HHHFX Hartford Schroders Emerging Mkts Eq F 2.31% Real Estate VNQ Vanguard Real Estate ETF 0.91%
Fixed Income Range: 50%-80% 65.94%
Short-Term VFSUX Vanguard Short-Term Investment-Grade Adm 13.31% Intermediate-Term DBLFX DoubleLine Core Fixed Income I 17.23% DODIX Dodge & Cox Income 17.09%
PTRQX Prudential Total Return Bond Q 17.28%
High Yield PHIYX PIMCO High Yield Instl 1.03%
Cash Range: 0%-20% 4.89%
FGZXX First American Government Oblig Z 4.89%
TOTAL 100.00%
City of Hercules ▎20
Performance Inception: 12/01/2017 Initial contribution was made on November 2017.
Returns are gross of account level investment advisory fees and net of any fees, including fees to manage mutual fund or exchange traded fund holdings. Returns for periods over one year are annualized. The information presented has been obtained from sources believed to be accurate and reliable. Past performance is not indicative of future returns. Securities are not FDIC insured, have no bank guarantee, and may lose value.
Quarter
to Date
(3 Months) 1 Year 3 Years 5 Years
Inception
to Date
(64 Months)
Cash Equivalents 1.05 2.54 .87 1.28 1.27
Lipper Money Market Funds Index 1.07 2.59 .89 1.26 1.25 Total Fixed Income 2.97 -4.34 -.87 .96 .77
Bloomberg US Aggregate Bd Index 2.96 -4.78 -2.77 .91 .66 Total Equities 6.36 -8.66 16.94 7.44 7.15
Large Cap Funds 7.88 -9.29 18.29 10.05 9.59
S&P 500 Composite Index 7.50 -7.73 18.60 11.19 10.52
Mid Cap Funds 4.13 -8.65 19.18 7.94 7.51
Russell Midcap Index 4.06 -8.78 19.20 8.05 7.63
Small Cap Funds 3.39 -8.70 20.59 6.81 6.72
Russell 2000 Index 2.74 -11.61 17.51 4.71 4.31
International Equities 6.80 -4.11 12.47 2.46 2.76
MSCI EAFE Index 8.47 -1.38 12.99 3.52 3.31
MSCI EM Free Index 3.96 -10.70 7.83 -.91 .07
REIT Funds 1.66 -19.81 9.38 5.59 3.50
Wilshire REIT Index 3.32 -21.33 11.03 5.66 3.75
Total Managed Portfolio 3.84 -5.19 4.43 3.17 2.93
Selected Period Performance
PARS/PRSP MODERATELY CONSERVATIVE HM
Account ****050104
Period Ending: 3/31/2023
City of Hercules ▎21
Asset Allocation – Pension
As of March 31, 2023
Current Asset Allocation Investment Vehicle
Equity Range: 20%-40% 29.16%
Large Cap Core COFYX Columbia Contrarian Core Inst3 2.79% VGIAX Vanguard Growth & Income Adm 5.47%
Large Cap Value DODGX Dodge & Cox Stock Fund 2.57%
IVE iShares S&P 500 Value ETF 1.16%
Large Cap Growth HNACX Harbor Capital Appreciation Retirement 1.64% IVW iShares S&P 500 Growth ETF 1.60%
Mid Cap Core IWR iShares Russell Mid-Cap ETF 2.56%
Small Cap Value UBVFX Undiscovered Managers Behavioral Val R6 2.10% Small Cap Growth FGROX Emerald Growth Institute 2.07%
International Core DFALX DFA Large Cap International I 2.32% International Value DODFX Dodge & Cox International Stock Fund 0.83% International Growth MGRDX MFS® International Growth R6 0.83% Emerging Markets HHHFX Hartford Schroders Emerging Mkts Eq F 2.31% Real Estate VNQ Vanguard Real Estate ETF 0.91%
Fixed Income Range: 50%-80% 65.94%
Short-Term VFSUX Vanguard Short-Term Investment-Grade Adm 13.31% Intermediate-Term DBLFX DoubleLine Core Fixed Income I 17.23% DODIX Dodge & Cox Income 17.09%
PTRQX Prudential Total Return Bond Q 17.28%
High Yield PHIYX PIMCO High Yield Instl 1.03%
Cash Range: 0%-20% 4.89%
FGZXX First American Government Oblig Z 4.89%
TOTAL 100.00%
City of Hercules ▎22
1-Month 3-Month Year-to- 1-Year 3-Year 5-Year 10-Year
Fund Name Return Return Date Return Return Return Return Columbia Contrarian Core Inst3 4.58 8.73 8.73 -8.62 18.20 10.94 11.97 Dodge & Cox Stock I -1.60 1.50 1.50 -6.78 23.34 9.43 11.37 Harbor Capital Appreciation Retirement 8.41 18.32 18.32 -14.66 14.36 10.80 13.99 iShares S&P 500 Value ETF 1.30 5.13 5.13 -0.34 18.91 9.29 9.98 Vanguard Growth & Income Adm 2.58 6.47 6.47 -8.16 19.11 10.89 12.18 iShares S&P 500 Growth ETF 5.83 9.58 9.58 -15.47 16.63 11.70 13.42 S&P 500 TR USD 3.67 7.50 7.50 -7.73 18.60 11.19 12.24
iShares Russell Mid-Cap ETF -1.55 4.03 4.03 -8.90 19.01 7.90 9.88 Russell Mid Cap TR USD -1.53 4.06 4.06 -8.78 19.20 8.05 10.05 Undiscovered Managers Behavioral Val R6 -5.32 0.53 0.53 -3.97 32.79 8.40 10.28 Emerald Growth Institutional -2.90 4.12 4.12 -11.72 14.43 5.69 10.08 Russell 2000 TR USD -4.78 2.74 2.74 -11.61 17.51 4.71 8.04 Dodge & Cox International Stock I 0.88 6.15 6.15 -0.46 17.30 2.91 5.06 DFA Large Cap International I 2.53 7.93 7.93 -1.26 14.85 3.91 5.18 MFS International Growth R6 5.19 9.22 9.22 1.03 13.16 6.73 6.87 MSCI EAFE NR USD 2.48 8.47 8.47 -1.38 12.99 3.52 5.00
Hartford Schroders Emerging Mkts Eq F 2.96 5.16 5.16 -10.26 7.86 -0.55 2.64 MSCI EM NR USD 3.03 3.96 3.96 -10.70 7.83 -0.91 2.00
Source: SEI Investments, Morningstar Investments
INTERNATIONAL EQUITY FUNDS
Returns less than one year are not annualized. Past performance is no indication of future results. The information presented has been obtained from sources believed to be accurate and reliable. Securities are not FDIC insured, have no bank guarantee and may lose value.
CITY OF HERCULES
For Period Ending March 31, 2023
LARGE CAP EQUITY FUNDS
MID CAP EQUITY FUNDS
SMALL CAP EQUITY FUNDS
City of Hercules ▎23
1-Month 3-Month Year-to- 1-Year 3-Year 5-Year 10-Year
Fund Name Return Return Date Return Return Return Return Vanguard Real Estate ETF -2.10 1.77 1.77 -20.12 9.80 5.80 5.78 DoubleLine Core Fixed Income I 2.02 3.56 3.56 -5.03 -0.56 0.68 1.70 Dodge & Cox Income I 1.79 3.13 3.13 -3.03 0.13 1.93 2.35 Vanguard Short-Term Investment-Grade Adm 1.54 1.88 1.88 -0.19 0.75 1.59 1.59 PGIM Total Return Bond R6 1.90 3.17 3.17 -6.05 -1.14 0.99 2.07 Bloomberg US Agg Bond TR USD 2.54 2.96 2.96 -4.78 -2.77 0.91 1.36 PIMCO High Yield Instl 1.83 3.98 3.98 -2.66 4.55 2.94 3.73 Source: SEI Investments, Morningstar Investments
REAL ESTATE FUNDS
BOND FUNDS
Returns less than one year are not annualized. Past performance is no indication of future results. The information presented has been obtained from sources believed to be accurate and reliable. Securities are not FDIC insured, have no bank guarantee and may lose value.
CITY OF HERCULES
For Period Ending March 31, 2023
City of Hercules ▎24