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Maturities: Issuer Par Value Maturity Date Coupon(%) Yield(%) Federal Farm Credit Bank 1,500,000 7/1/2019 1.150 1.370 Federal Home Loan Bank 2,815,000 7/11/2019 1.125 1.125 United States Treasury 2,000,000 7/31/2019 1.625 1.388 Microsoft Corp. 2,000,000 8/8/2019 1.100 1.130 Federal Home Loan Mort. Corp. 2,000,000 8/22/2019 1.400 1.438 Federal National Mort.Assoc. 1,000,000 8/26/2019 1.350 1.350 Federal Home Loan Mort. Corp. 2,000,000 8/28/2019 1.160 1.160 Federal Home Loan Bank 2,000,000 9/13/2019 1.375 1.100 Federal National Mort. Assoc. 500,000 9/24/2019 1.500 1.120 Federal Home Loan Mort. Corp. 1,000,000 9/30/2019 1.400 1.400 Total 12,500,000 Callable (matured) Bonds: Issuer Par Value Called Date Coupon(%) Yield(%) Federal Farm Credit Bank 3,000,000 7/5/2019 2.600 2.657 Federal Home Loan Bank 2,000,000 7/5/2019 2.750 2.777 Federal Farm Credit Bank 3,000,000 7/18/2019 2.630 2.650 Federal Home Loan Mort. Corp. 1,500,000 7/26/2019 2.530 2.950 Federal National Mort. Assoc. 2,000,000 7/30/2019 2.650 2.650 Federal Farm Credit Bank 3,000,000 9/5/2019 2.570 2.593 Federal Home Loan Mort. Corp. 2,000,000 9/27/2019 2.500 2.500 Total 16,500,000 CURRENT INVESTMENT STRATEGY: The effective rate of return for the recent month on the portfolio increased slightly to 2.18% due to a mix of investment strategy. The Federal Reserve recently eased monetary policy by cutting the target funds rate by 25 basis points. The policy change signals that the economy will continue to weaken in the near future with potential rate cuts. Staff continues to invest in a longer term securities to secure the interest rate and matches maturities with future cash needs. While short-term yields are highly sensitive to the Federal monetary policy, longer-term yields are more influenced by growth and inflation expectations. This strategy increased the average days to maturity (ADM) to 844 days as of September 30, 2019 to capitalize the rate cuts as widely expected. Additionally, staff is balancing the portfolio's credit exposure to pick up incremental yields while complying with the City's investment policy's mandate of safety, liquidity, and yield. Staff will continuously monitor this straategy during the next fiscal year.