1 CITY OF SANTA CLARA
SUMMARY OF INVESTMENT PORTFOLIO
All securities held by the City of Santa Clara as of November 30, 2022 were in compliance with the City's Investment Policy Statement.
All securities held are rated in a rating category of “A” or the equivalent or higher by at least one nationally recognized statistical rating agency. There is adequate cash flow and maturity of investments to meet the City’s needs for the next six months.
The following table provides the breakdown of the total portfolio among the City, the Sports and Open Space Authority (SOSA), and the Housing Authority (HA) as of November 30, 2022.
On Nov
ember 30, 2022 the cost value and market value of the City's unrestricted pooled investment portfolio were $870,259,185 and $829,400,259 respectively.
Market Update and Investment Strategy
Inflationary pressures eased in October as the Consumer Price Index (CPI) rose a lower than expected 7.7%, down from 8.2% the prior month. Markets now expect the Federal Reserve Board to increase short-term interest rates only 0.50% in mid-December after four consecutive 0.75% hikes. The lower than expected CPI reading also caused longer-term bond yields to unexpectedly decline in anticipation of smaller interest rate increases in the future. The 2-year and 10-year U.S. Treasury yields finished the month at 4.31% and 3.61%, down 0.17% and 0.44% for November, respectively.
Real gross domestic product (GDP) rose at a 2.9% annualized rate in the third quarter of 2022, as the US economy rebounded following two quarterly contractions due in part to resilient consumers and businesses. This exceeded the expected 2.8% increase and the prior quarter’s 0.6% decline.
The Consumer Confidence Index (CCI) fell from 102.2 to 100.2 in November, as signs of softening in consumer demand brought to light the vulnerability of the current economic expansion.
The City's investment strategy for November 2022 was to invest funds not required to meet current obligations, in securities listed in the prevailing Investment Policy Statement. This strategy ensures safety of the City’s funds, provides liquidity to meet the City’s cash needs, and earns a reasonable portfolio return.
On July 14, 2020, City Council approved entering into a contract with PFM Asset Management LLC (“PFMAM”) for the management of the City’s investment portfolio. The City has leveraged PFMAM’s extensive investment management experience and dedicated
COST VALUE PERCENTAGE
City $866,040,889 99.51%
SOSA 2,729 0.00%
HA 4,215,567 0.49%
Unrestricted $870,259,185 100.00%
Restricted Bond Proceeds 2,172,426
Total Invest
ments $872,431,611
SAMPLE
2 credit and risk management personnel to further diversify the portfolio and enhance returns. PFMAM began actively managing the City’s securities portfolio on September 1, 2020.
As of November 30, 2022, 42.10% of the City’s portfolio consists of U.S. Treasury Notes, 21.07% consists of Federal Agencies,
19.66% consists of investment grade Corporate Notes, 8.05% cons ists of Local Agency Investment Fund (LAIF), 2.88% consists of California Asset Management Program (CAMP), 2.11% consists of AAA-rated Supranational Obligations, 2.09% consists of Negotiable Certificates of Deposit, 1.32% consists of AAA-rat ed Asset-Back Securities, and 0.48% consists of investment grade Municipal Bonds. In addition, City bond proceeds are invested in separate funds and are not included in the calculation of the City’s portfolio yield.
U.S. Treasury Notes
42.10%
Federal Agency Notes
21.06%
Corporate Notes
19.66%
Municipal Bonds
0.48%
Supranational Obligations
2.11%
Asset‐Backed Securities
1.32%
Negotiable Certificates of
Deposit…
Money Market Fund
0.00%
Local Agency Investment
Fund (LAIF)
8.05%
California Asset
Management Program
(CAMP)
2.88% Mutual Fund ‐ Traffic
Mitigation Bond Proceeds
0.24%
SAMPLE
3 The City’s securities portfolio is
benchmarked against the ICE BAML 1-5 US Treasury Index.
1.63%
1.59%
1.69%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
Securities Portfolio Yield at Cost vs Index 24-Month Average of Yield at Market November 2022
Securities Portfolio (yield at cost)
City's Benchmark Index (24-month rolling average market yield) BofA 1-5 AAA-A Corp & Gov't Index (24-month rolling average market yield) SAMPLE
4 The following table summarizes the investment yields other information of the City’s investment portfolio components, along with comparable-maturity market indices. Also shown are the monthly interest income and aggregate year-to-date income.
Current Month
11/30/2022
Investment Yield
Liquidity Portfolio1 2.53%
LAIF average monthly yield 2.01%
Securities Portfolio2 (at cost) 1.63%
ICE BAML 1-5 US Treasury Index (24-month rolling average market yield) 1.59% ICE BAML 1-5 AAA-A US Corporate & Government Index (24-month rolling average market yield)
1.69%
City Portfolio (Liquidity + Securities) 1.71%
Investment Total Return
Securities Portfolio 0.98%
ICE BAML 1-5 US Treasury Index 1.08%
ICE BAML 1-5 AAA-A US Corporate & Government Index 1.22% Average Maturity of Investments (in years)
Liquidity Portfolio 0.08
Securities Portfolio 2.19
City Portfolio (Liquidity + Securities) 1.95
ICE BAML 1-5 US Treasury Index 2.59
ICE BAML 1-5 AAA-A US Corporate & Government Index 2.63 Interest Income Current Month $ 944,225.06 Interest Income Fiscal Year To Date $ 5,047,599.25
1. Consists of CAMP, LAIF, Dreyfus Tra ffic Mitigation Fund, & Principal Sweep Account
2. Core long te
rm portfolio managed by PFM Asset Management.
SAMPLE
5 SAMPLE
MATURITY
INVESTMENT MATURITY DISTRIBUTION
AS OF NOVEMBER 30, 2022
UNRESTRICTED POOLED PORTFOL IO
NUMBER OF
(IN MONTHS ) COST VALUE INVESTMENTS DISTRIBUTION
DEMAND $ 95,370,43 1 (a) 3 ' 10.96%
0 TO 6 23,334,362 3 2.68%
7 TO 12 134,114,963 23 15.41%
13 TO 18 109,492,806 23 12.58%
19 TO 24 93,190,50 1 14 10.71%
25 TO 30 116,236,516 20 13.36%
31 TO 36 89,805,546 18 10.32%
37 TO 42 87,635,823 19 10.07%
43 TO 48 33,660,152 6 3.87%
49 TO 54 56,411,714 13 6.48%
55 TO 60 31,006,371
I •
5 3.56%
TOTAL $ 870,259,185 147 100.00%
Average Maturit.11 of Unrestricted Pool: 1.95 Years
(a) $20 milli on is earmal1<ed for the City's Electric Utility power-trading. 24%
22%
20%
18%
16%
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14%
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INVESTMENT MATURITY DISTRIBUTION
UNRESTRICTED POOLED PORTFOLIO
AS OF NOVEMBER 30, 2022
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