MOOSE JAW — The City of Moose Jaw’s investment portfolios gained more than $5.3 million during this year’s third quarter, while they have generated nearly $35 million in interest since their inception in 2019.
During city council’s Nov. 25 regular meeting, the investment committee presented a report dealing with the third-quarter results. Council then voted unanimously to receive and file the document.
The report showed that, as of Sept. 30, there was $82,596,438.57 in the long-term portfolio and $26,377,089.42 in the short-term portfolio, for a total of $108,973,527.99.
Long-term portfolio
From July 1 to Sept. 30, the long-term portfolio grew by 5.59 per cent and generated $4,377,112.42. However, city hall withdrew $782,006 from this area during the quarter for capital funding, which meant the portfolio grew to $82,596,438.57 from $79,001,332.15.
Year-to-date, this portfolio has had returns of 12.25 per cent.
Moderate-term portfolio
From July 1 to Sept. 30, the moderate-term portfolio grew by 3.9 per cent and generated $989,136.88. This increased the portfolio to $26,377,089.42 from $25,387,952.54.
Year-to-date, this portfolio has had returns of 8.28 per cent.
Combined, both portfolios gained $5,366,249.30 during the quarter, but because of the capital investment withdrawal, the overall gain was $4,584,243.30.
Since the inception of the portfolios in 2019, they have provided total returns of $34,919,187.93, which is equal to 99 percentage points of municipal taxation, considering one percentage point this year is $352,448.77.
“The markets have literally shot the lights out this year,” Coun. Dawn Luhning said while presenting the report.
Luhning — who is a financial consultant and a member of the investment committee — recalled that she was worried about the condition of the markets in October 2023 and thought it would be the same as the “horrible year” in 2022. However, she noted that the markets turned around in November 2023 and have “been really, really strong ever since.”
“We do have ups and downs in the market as we move along, but this year has been a really good year in the markets,” she said. “It’s not over yet though — the past is not indicative of the future.”
Luhning reminded everyone that the municipality’s investment policy is based on a long-term timeline — the city is considered a corporation that will likely last forever — that allows the city to weather short-term downturns in the market or shortfalls in the portfolios.
“It’s very different from looking at your own personal investments … ,” she said.
“The city’s investment managers will continue to monitor the moderate-term portfolio and maintain a slight, overweight equity position in that portfolio,” Luhning added, “and … transition the overweight fixed income portion of the long-term portfolio into cash equivalents to take advantage of any market declines due to short-term volatility.”
Coun. Chris Warren asked city administration what happens with the excess interest money that the portfolios generate and whether that revenue is reinvested somewhere or applied to the budget to address shortfalls.
“It depends on the year,” said finance director Brian Acker.
In years where the portfolios are overproducing, if the city experiences a budget shortfall, administration would recommend to council during the budget process to direct excess interest revenue to those areas, he added. Since there will be extra money from the portfolios this year, officials may recommend drawing down some money for next year.
The next regular council meeting is Monday, Dec. 2.
