14 - Laserfiche WebLink

Callable (matured) Bonds: Issuer Par Value Call Date Coupon(%) Yield(%) Federal Home Loan Bank 2,000,000 4/10/2018 1.20 1.20 Federal Farm Credit Bank 1,899,050 4/11/2018 1.00 1.01 Federal Farm Credit Bank 1,997,500 4/24/2018 0.98 1.01 Freddie Mac 1,995,060 5/25/2018 0.88 1.00 Freddie Mac 2,000,000 5/25/2018 1.00 1.00 Freddie Mac 1,996,880 6/29/2018 1.00 1.10 United Business Bank 245,000 4/11/2018 0.65 0.65 Apple Inc. 1,993,360 5/3/2018 1.00 1.11 CURRENT INVESTMENT STRATEGY: Staff continues to invest in a mix of fixed income securities as excess cash is available while continuing to match maturities with future cash needs. The Federal reserve has continuously been increasing interest rates as we hand anticipate, we still feel we have a few more rate hikes coming. We have concentrated on purchasing callable securities over the last year which has paid off as they are now behaving as bullets and providing a higher yield to the portfolio. We are deliberately not going too long on the maturity curve due to the current rate environment, in order to provide additional income and structure to the portfolio. The yield curve currently is very flat on the longer end with little to no award for going long, this can be interpreted in different ways, some of which could indicate a heaver concentration on the short end of the curve while other indicators could be a possibility of a recession in the 18 to 24-month horizon, we are well into 8 years of a recovery and upward moving economy and as such great caution needs to be taken in these uncertain times as most prior market cycles have revolved in the 5 to 10 year range. Additionally, staff is balancing the portfolio's credit exposure in order to pick up incremental yields while complying with the City's investment policy's mandate of safety, liquidity, and yield. This strategy is expected to continue throughout FY 2018-19.