The City of Moose Jaw’s investment portfolios lost more than $1.5 million during this year’s third quarter, a decrease of nearly $3 million from the previous quarter.
During city council’s Nov. 27 regular meeting, the investment committee presented a report with the third-quarter results. Council then voted unanimously to receive and file the document.
The report showed there was $71,009,836 in the long-term portfolio and $24,566,656 in the moderate-term portfolio as of Sept. 30, for a total of $95,576,492.
In comparison, as of June 30, those numbers were $71,942,340.97, $24,751,939.23 and $96,694,280.20, respectively.
Moderate-term portfolio
The report showed that from July 1 to Sept. 30, the moderate-term portfolio decreased by 0.75 per cent and lost $185,283.44. This decreased the portfolio to $24,566,656 from $24,751,939.23.
Long-term portfolio
The report showed that from July 1 to Sept. 30, the long-term portfolio decreased by 1.91 per cent and lost $1,385,097.12. While this decreased the portfolio to $70,557,243.85, the addition of $452,592 through invested capital bumped the value to $71,009,835.85.
Combined, both portfolios lost $1,570,380.56 during the third quarter, which is equal to roughly 4.75 percentage points of municipal taxation; one percentage point this year is $330,701.
In comparison, both portfolios gained $1,201,554.11 during Q2; the difference from the second to third quarter was $2,771,934.67.
Since their inception in July 2019, both portfolios have produced a total return of $17,658,100.58, equal to a municipal tax increase of roughly 53.39 per cent.
Also, since inception, the moderate-term portfolio return has been 3.73 per cent and the long-term portfolio return has been 4.63 percent, both below the targeted thresholds of 4.25 per cent and six per cent, respectively.
Investment committee meeting
The minutes from the investment committee show members discussed the expected returns of the portfolios and the current returns that the portfolios are seeing; year-to-date, the moderate-term file’s return is 2.4 per cent and the long-term file’s return is 2.73 per cent.
“The city (uses) the investment income from these invested funds to fund a variety of programs and services. As a result, it is necessary each year to estimate the required drawdowns and incorporate them in the proposed budgets,” the report said.
After in-camera discussions, the committee approved two motions.
One motion will see the city’s investment managers — Jerrod Schafer and Bruce Willms with RBC Dominion Securities — work with city administration to update the investment policy and bring it back to a future meeting for review.
The second motion will see the investment managers implement proposed changes to asset allocation to transition to a five-per-cent fixed income overweight on strength in each portfolio and update managers within the guidelines of the policy.
The next regular council meeting is Monday, Dec. 4.
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