Title
FY2024 Briefing on County Investments
Body
The purpose of this item is to provide an overview of the County's investments and to provide an update of recent investment performance.
The County manages its investments in accordance with adopted policies. The Annual Investment Report as of 6/30/2024 is included as Attachment A. The County's investment policy is included as Attachment B. Staff has received assistance and advice from an independent investment advisor, Deanne Woodring of Government Portfolio Advisors (GPA). GPA's presentation is included as Attachment C.
Recent Investment Performance
The investment performance for FY 2024 was impacted by the higher interest rate environment. For shorter-term investments (e.g. Checking accounts, CDs, US Agencies and US Treasury) investment rates increased, and this impacted the overall earnings of the General Fund. Comparing June 2024 to June 2023, interest earned on the liquidity portfolio increased from 2.99% to 3.43% and the earnings rate on short term investments increased from 2.18% to 3.18%. This year the General fund component to the SIC was reduced to rebalance and reduce the price volatility of the general fund.
Longer-term investments with the New Mexico State Investment Council's Long-term Investment Funds are invested in a combination of equity and fixed income securities. This fund has much more price volatility due to the nature of investments and the purpose of the funds. The value increased this fiscal year as the stock market was positive and interest rates were higher added attractive returns and drove long-term value for the permanent funds. The greater volatility associated with these investments is generally deemed acceptable because the long-term nature of the funds allows for a longer-term strategy, which accepts higher volatility in exchange for higher long-term average returns. The return in the SIC Permanent fund and Cemetery Fund was 16.67% for the fiscal year.
The impact of ...
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