1 INVESTMENT REPORT
For the Quarter Ending June 30, 2023
City of Hercules, California
CITY OF HERCULES FINANCE DEPARTMENT
111 CIVIC DRIVE
HERCULES, CALIFORNIA 94547-1771
PHONE: 510-799-8200
October 10, 2023
Honorable Mayor and City Council:
I verified that this investment portfolio, as of June 30, 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 June 30, 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 June 30, 2023
Book % of Average Market
Value Total Yield Value
Cash on Hand $2,005 $2,005
Cash on Deposit 10,048,711 10,048,711
Total Cash on Hand 10,050,716 11.93% 0.89% 10,050,716 Local Agency Investment Fund (LAIF) 58,747,802 69.76% 3.17% 57,856,509 Irrevocable Trust (Pension) 2,141,823 2.54% 1.77% 2,141,823 Irrevocable Trust (OPEB) 2,668,315 3.17% 1.77% 2,668,316 Investments with Bond Trustees 10,607,349 12.60% 3.87% 10,607,349 Total Portfolio $84,216,005 100.00% 2.48% $83,324,713
Amount over (under) Market Value vs. Book Value ($891,292) % of Portfolio -1.06%
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 June 30, 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 4,344,493.07 0.00% 0.00% 4,344,493.07 4,344,493.07 MECHANICS BANK - HERCULES RDA 5,658,196.95 0.00% 0.00% 5,658,196.95 5,658,196.95 MECHANICS BANK - PD ASSET SEIZURE 25,386.98 0.00% 0.00% 25,386.98 25,386.98 CalTRUST 20,633.81 3.57% 3.57% 3/31/2023 6/30/2023 91 - 20,633.81 20,633.81 TOTAL AND AVERAGES 10,048,710.81 0.89% 0.89% 91 - 10,048,710.81 10,048,710.81
LOCAL AGENCY INVESTMENT FUND (LAIF)
LAIF 58,747,801.78 3.17% 3.17% 3/31/2023 6/30/2023 91 - 58,747,801.78 57,856,509.45
IRREVOCABLE TRUST (PENSION/OPEB)
US BANK MUTUAL (PARS-OPEB) 2,668,315.98 1.77% 1.77% 3/31/2023 6/30/2023 91 - 2,668,315.98 2,668,315.98 US BANK MUTUAL (PARS-PENSION) 2,141,823.09 1.77% 1.77% 3/31/2023 6/30/2023 91 - 2,141,823.09 2,141,823.09 TOTAL AND AVERAGES 4,810,139.07 1.77% 1.77% 91 - 4,810,139.07 4,810,139.07
INVESTMENTS WITH BOND TRUSTEES
GE CAPITAL CORPORATION 4,421.94 3.03% 3.03% 3/31/2023 6/30/2023 91 - 4,421.94 4,421.94
WEBSTER BANK (STERLING NATIONAL BANK
ESCROW) 117,303.35 0.24% 0.24% 3/31/2023 6/30/2023 91 - 117,303.35 117,303.35 THE BANK OF NEW YORK (BNY) JM 05 1 RESERVE
FUND 55,797.47 0.00% 0.00% 3/31/2023 6/30/2023 91 - 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% 3/31/2023 6/30/2023 91 - 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% 3/31/2023 6/30/2023 91 - 8,325,000.00 8,325,000.00
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 REVENUE FUND) 546,868.29 4.99% 4.99% 3/31/2023 6/30/2023 91 - 546,868.29 546,868.29
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 DEBT SERV PRIN ACCT)259,482.77 4.99% 4.99% 3/31/2023 6/30/2023 91 - 259,482.77 259,482.77
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 DEBT SERV INT ACCT) 337,306.45 4.99% 4.99% 3/31/2023 6/30/2023 91 - 337,306.45 337,306.45
THE BANK OF NEW YORK (BNY) MELLON TRUST
(HERCULES PFA 09 RESERVE FD) 920,215.00 4.99% 4.99% 3/31/2023 6/30/2023 91 - 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% 3/31/2023 6/30/2023 91 - 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% 3/31/2023 6/30/2023 91 - - - THE BANK OF NEW YORK (BNY) MELLON TRUST (sa
HERCULES 2022 A B INTEREST ACCT) 33,498.59 0.00% 0.00% 3/31/2023 6/30/2023 91 - 33,498.59 33,498.59 TOTAL AND AVERAGES 10,607,349.16 3.87% 3.87% 91 - 10,607,349.16 10,607,349.16 TOTAL INVESTMENT REPORT 84,216,005.82 2.48% 2.48% 91 - $84,216,005.82 $83,324,713.49 City of Hercules, California
Investment Portfolio Summary Report
For the Quarter Ended June 30, 2023
% of
Cash Description Book Value Total
Bond Trustee $10,607,349 13%
Irrevocable Trust 4,810,139 6%
Restricted 36,524,741 43%
General Fund 30,161,052 36%
Internal Service Funds 2,112,725 3%
Total, Book Value $84,216,006 100%
Restricted:
Wastewater 19,123,492
Successor Housing 5,277,389
Development Impact Fees 2,006,442
Landscape & Lighting 1,516,958
Gas Tax, RMRA & Measure J "Street" 1,128,526
General Plan Update 929,750
Solid Waste 819,492
Capital Projects 693,170
Agency Fund 650,179
Successor Agency 3,788,375
BART (Park & Ride) 341,878
Asset Seizure 249,090
36,524,741
Bond Trustee 13%Irrevocable Trust 6%Restricted 43%General Fund 36%Internal Service Funds 2%Cash by Fund *June 3.167
May 2.993
April 2.870
March 2.831
PMIA Average Life(1): 260
LAIF Fair Value Factor(1): 0.984828499
PMIA Daily(1): 3.26
PMIA Quarter to Date(1): 3.01
LAIF Apportionment Rate(2): 3.15
LAIF Earnings Ratio(2): 0.00008636172883763
LAIF Administrative Cost(1)*: 0.06
Treasuries
59.91%
Agencies
24.30%
Certificates of
Deposit/Bank Notes
7.59%
Time
Deposits
3.10%
Commercial
Paper
4.61%
Corporate
Bonds
0.26%
Loans
0.23%
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). *The percentage of administrative cost equals the total administrative cost divided by the quarterly interest earnings. The law provides that administrative costs are not to exceed 5% of quarterly EARNINGS of the fund. However, if the 13-week Daily Treasury Bill Rate on the last day of the fiscal year is below 1%, then administrative costs shall not exceed 8% of quarterly EARNINGS of the fund for the subsequent fiscal year. ** Revised
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 06/30/2023
Daily rates are now available here. View PMIA Daily Rates Quarterly Performance
Quarter Ended 06/30/23
Chart does not include $2,496,000.00 in mortgages, which equates to 0.002%. Percentages may not total 100% due to rounding.
Pooled Money Investment Account
Monthly Portfolio Composition (1)
06/30/23
$168.1 billion
City of Hercules
As of June 30, 2023
Presented By
Andrew Brown, CFA
PARS: City of Hercules
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.
1 Quarter
to Date
(3 Months)
Year
to Date
(6 Months) 1 Year 3 Years 5 Years 10 Years
Inception
to Date
06/01/2010
Cash Equivalents 1.21 2.27 3.63 1.26 1.44 .90 .69
Lipper Money Market Funds Index 1.21 2.30 3.70 1.27 1.43 .86 .66 Total Fixed Income -.12 2.85 .58 -2.58 1.01 1.65 2.32
Bloomberg US Aggregate Bd Index (USD) -.84 2.09 -.94 -3.96 .77 1.52 2.08 Total Equities 6.46 13.24 15.70 11.76 8.33 9.76 10.65
Large Cap Funds 9.34 17.96 19.65 13.89 11.26 12.26 12.67 S&P 500 Composite Index 8.74 16.89 19.59 14.60 12.31 12.86 13.56 Mid Cap Funds 4.77 9.10 15.02 12.55 8.36 9.27 10.73
Russell Midcap Index 4.76 9.01 14.92 12.50 8.46 10.32 11.75 Small Cap Funds 4.30 7.83 13.13 12.41 6.15 10.23 11.99
Russell 2000 Index (USD) 5.21 8.09 12.31 10.82 4.21 8.26 9.83 International Equities 2.35 9.31 12.02 7.28 3.97 4.98 5.28 MSCI EAFE Index (Net) 2.95 11.67 18.77 8.93 4.39 5.41 6.34 MSCI EM Free Index (Net USD) .90 4.89 1.75 2.32 .93 2.95 2.97 REIT Funds 1.89 3.58 -3.47 5.94 4.16
Wilshire REIT Index 3.31 6.73 -.31 8.55 4.40 6.39 8.55
Total Managed Portfolio 1.77 5.68 4.92 1.87 3.45 5.35 6.49 Period Ending 6/30/2023
Selected Period Performance
HERCULES OPEB
Asset Allocation – OPEB Plan
As of June 30, 2023
PARS: City of Hercules
2 Current Asset Allocation Investment Vehicle
Equity Range: 20%-40% 28.70%
Large Cap Core COFYX Columbia Contrarian Core Cl Z 2.73% VGIAX Vanguard Growth & Income Adm 5.40%
Large Cap Value IVE iShares S&P 500 Value ETF 1.16%
DODGX Dodge & Cox Stock Fund 2.54%
Large Cap Growth HNACX Harbor Capital Appreciation Retirement 1.59% IVW iShares S&P 500 Growth ETF 1.61%
Mid Cap Core IWR iShares Russell Mid-Cap ETF 2.57%
Small Cap Value UBVFX Undiscovered Mgrs Behavioral Value R6 2.04% Small Cap Growth FGROX Emerald Growth Fund Inst 2.04%
International Core DFALX DFA Large Cap International I 2.24% International Value DODFX Dodge & Cox International Stock Fund 0.81% International Growth MGRDX MFS® International Growth R6 0.80% Emerging Markets HHHFX Hartford Schroders Emerging Mkts Eq 2.22% Real Estate VNQ Vanguard Real Estate ETF 0.94%
Fixed Income Range: 50%-80% 66.61%
Short-Term VFSUX Vanguard Short-Term Investment-Grade Adm 6.38% Intermediate-Term DODIX Dodge & Cox Income Fund 17.45%
DBLFX DoubleLine Core Income Fund 17.36%
PTRQX Prudential Total Return Bond Q 17.44%
GOVT iShares US Treasury ETF 3.99%
Mortgage Backed MBB iShares MBB ETF 3.99%
Cash Range: 0%-20% 4.69%
FGZXX First American Government Oblig Z 4.69%
TOTAL 100.00%
PARS: City of Hercules
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. 3 Quarter
to Date
(3 Months)
Year
to Date
(6 Months) 1 Year 3 Years 5 Years
Inception
to Date
12/01/2017
Cash Equivalents 1.21 2.27 3.63 1.26 1.44 1.43
Lipper Money Market Funds Index 1.21 2.30 3.70 1.27 1.43 1.41 Total Fixed Income -.12 2.85 .58 -2.58 1.01 .71
Bloomberg US Aggregate Bd Index (USD) -.84 2.09 -.94 -3.96 .77 .47 Total Equities 6.46 13.24 15.70 11.76 8.33 8.03
Large Cap Funds 9.34 17.96 19.65 13.89 11.26 10.90
S&P 500 Composite Index 8.74 16.89 19.59 14.60 12.31 11.69 Mid Cap Funds 4.77 9.10 15.02 12.55 8.36 8.06
Russell Midcap Index 4.76 9.01 14.92 12.50 8.46 8.17
Small Cap Funds 4.30 7.83 13.13 12.41 6.15 7.21
Russell 2000 Index (USD) 5.21 8.09 12.31 10.82 4.21 5.07 International Equities 2.35 9.31 12.02 7.28 3.97 3.06
MSCI EAFE Index (Net) 2.95 11.67 18.77 8.93 4.39 3.70
MSCI EM Free Index (Net USD) .90 4.89 1.75 2.32 .93 .23 REIT Funds 1.89 3.58 -3.47 5.94 4.16 3.69
Wilshire REIT Index 3.31 6.73 -.31 8.55 4.40 4.18
Total Managed Portfolio 1.77 5.68 4.92 1.87 3.45 3.12
Account *****50104
Period Ending 6/30/2023
Selected Period Performance
PARS/PRSP MODERATELY CONSERVATIVE HM
Asset Allocation – Pension
As of June 30, 2023
PARS: City of Hercules
4 Current Asset Allocation Investment Vehicle
Equity Range: 20%-40% 28.70%
Large Cap Core COFYX Columbia Contrarian Core Cl Z 2.73% VGIAX Vanguard Growth & Income Adm 5.40%
Large Cap Value IVE iShares S&P 500 Value ETF 1.16%
DODGX Dodge & Cox Stock Fund 2.54%
Large Cap Growth HNACX Harbor Capital Appreciation Retirement 1.59% IVW iShares S&P 500 Growth ETF 1.61%
Mid Cap Core IWR iShares Russell Mid-Cap ETF 2.57%
Small Cap Value UBVFX Undiscovered Mgrs Behavioral Value R6 2.04% Small Cap Growth FGROX Emerald Growth Fund Inst 2.04%
International Core DFALX DFA Large Cap International I 2.24% International Value DODFX Dodge & Cox International Stock Fund 0.81% International Growth MGRDX MFS® International Growth R6 0.80% Emerging Markets HHHFX Hartford Schroders Emerging Mkts Eq 2.22% Real Estate VNQ Vanguard Real Estate ETF 0.94%
Fixed Income Range: 50%-80% 66.61%
Short-Term VFSUX Vanguard Short-Term Investment-Grade Adm 6.38% Intermediate-Term DODIX Dodge & Cox Income Fund 17.45%
DBLFX DoubleLine Core Income Fund 17.36%
PTRQX Prudential Total Return Bond Q 17.44%
GOVT iShares US Treasury ETF 3.99%
Mortgage Backed MBB iShares MBB ETF 3.99%
Cash Range: 0%-20% 4.69%
FGZXX First American Government Oblig Z 4.69%
TOTAL 100.00%
PARS: City of Hercules
5 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 6.58 11.06 20.75 21.21 15.02 12.88 12.78 Vanguard Growth & Income Adm 7.16 8.50 15.52 18.31 14.72 11.92 12.74 Dodge & Cox Stock I 6.91 5.58 7.15 12.37 18.18 10.02 11.41 iShares S&P 500 Value ETF 6.86 6.60 12.06 19.78 16.58 10.39 10.33 Harbor Capital Appreciation Retirement 6.84 15.74 36.94 32.51 8.83 12.69 15.40 iShares S&P 500 Growth ETF 6.36 10.54 21.13 18.04 11.60 12.81 14.28 S&P 500 TR USD 6.61 8.74 16.89 19.59 14.60 12.31 12.86
iShares Russell Mid-Cap ETF 8.33 4.73 8.94 14.79 12.32 8.31 10.15 Russell Mid Cap TR USD 8.34 4.76 9.01 14.92 12.50 8.46 10.32 Undiscovered Managers Behavioral Val R6 7.38 -0.17 0.36 7.78 24.50 6.90 9.90 Emerald Growth Institutional 8.17 8.78 13.26 20.32 7.22 5.66 10.41 Russell 2000 TR USD 8.13 5.21 8.09 12.31 10.82 4.21 8.26 Dodge & Cox International Stock I 7.02 4.31 10.72 14.70 12.78 4.88 5.33 DFA Large Cap International I 4.81 3.00 11.18 17.21 9.99 4.82 5.64 MFS International Growth R6 3.74 2.97 12.47 18.55 8.43 6.86 7.56 MSCI EAFE NR USD 4.55 2.95 11.67 18.77 8.93 4.39 5.41
Hartford Schroders Emerging Mkts Eq F 5.13 1.90 7.15 4.00 2.31 1.59 3.70 MSCI EM NR USD 3.80 0.90 4.89 1.75 2.32 0.93 2.95
Source: SEI Investments, Morningstar Investments
CITY OF HERCULES
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.
INTERNATIONAL EQUITY FUNDS
For Period Ending June 30, 2023
LARGE CAP EQUITY FUNDS
MID CAP EQUITY FUNDS
SMALL CAP EQUITY FUNDS
PARS: City of Hercules
6 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 5.56 1.64 3.44 -3.95 5.86 4.36 6.12 DoubleLine Core Fixed Income I -0.26 -0.59 2.95 -0.09 -2.48 0.59 1.88 PGIM Total Return Bond R6 0.14 0.00 3.17 0.71 -3.28 1.10 2.42 Dodge & Cox Income I 0.32 0.08 3.21 1.83 -1.76 2.02 2.55 Vanguard Short-Term Investment-Grade Adm -0.32 -0.12 1.76 1.58 -0.87 1.52 1.68 iShares MBS ETF -0.43 -0.69 1.92 -1.58 -3.76 -0.01 1.00 iShares US Treasury Bond ETF -0.73 -1.34 1.92 -2.08 -4.85 0.35 0.87 Bloomberg US Agg Bond TR USD -0.36 -0.84 2.09 -0.94 -3.96 0.77 1.52 Source: SEI Investments, Morningstar Investments
CITY OF HERCULES
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.
BOND FUNDS
For Period Ending June 30, 2023
REAL ESTATE FUNDS