City’s Investments In The Black Over The First Quarter - But Below Long Term Targets

Despite positive returns first quarter results were below long term targets for the City’s two portfolios

The City’s investments made profits in the first quarter of 2024 albeit below the long term targets for the two investment portfolios.

The moderate term investment portfolio - valued at $26,567,874 on March 31, 2024 - has a Year To Date (YTD) return of 3.36 per cent almost a full percent (or just over 20 percent) below the portfolio’s long term target of 4.25 percent.

The makeup and value of the moderate term investment portfolio as of March 31, 2024 - source City of Moose Jaw

The portfolio - made up of 64 percent fixed income and cash and 36 percent equities - has a return of 4.84 percent which is above the long term target of 4.25 percent.

The long term investment portfolio - valued at $78,576,489 on March 31, 2024 - had a 5.71 percent return just slightly below the portfolio’s target of 6 percent.

The makeup and value of the long term portfolio as of March 31, 2024 - source City of Moose Jaw

The long term portfolio - comprised of 68 percent equities and 32 percent income and cash - has produced a 6.75 percent return since inception beating the 6 percent target.

“As always the investment committee takes a long term view in terms of the City’s investments,” committee chair Councillor Dawn Luhning told Council, adding the policy allows “the City to weather short term market downturns.”

Other than Councillor Luhning - who presented the report - there were no comments from a noticeably subdued Council - before they voted to receive and file the report.

The investment committee, after much controversy, was created in 2019 in the hopes of generating higher returns on the City’s sizeable reserves.

In the past the City invested their reserves almost exclusively in the blue chip bond market.

The 2019 investment strategy has seen the City lose portfolios values due to market fluctuations while the move away from bonds - and their sale - led to a cash windfall for City coffers.

The City’s reserves often seen as something other communities are “envious of” were established by the Province when they took over the City’s finances after bankruptcy.

The reserve system helps keep property taxes down and a portion of the reserves are used in the City’s operating budget.

In the past Administration has stated they are not a rainy day fund.