The City of Moose Jaw’s investment portfolios gained more than $5 million during this year’s first quarter, while they have generated over $28 million since they were invested nearly five years ago.
During city council’s May 27 regular meeting, the investment committee presented a report dealing with the first-quarter results. Council then voted unanimously to receive and file the document.
The report showed that there was $78,565,267.60 in the long-term portfolio and $26,555,469.44 in the moderate-term portfolio as of March 31, for a total of $105,120,737.04.
Long-term portfolio
From Jan. 1 to March 31, the long-term portfolio grew by 5.71 per cent and generated $4,283,905.27. This amount increased the portfolio to $80,260,161.60 from $75,976,256.33, but because the city withdrew $1,694,894 for capital funding, that reduced the portfolio to $78,565,267.60.
Moderate-term portfolio
From Jan. 1 to March 31, the moderate-term portfolio grew by 3.36 per cent and generated $864,381.36. This increased the portfolio to $26,555,469.44 from $25,691,088.08.
Combined, both portfolios gained $5,148,286.63, but because of the capital investment withdrawal, the overall gain was $3,453,392.63. This money is equal to roughly 10 percentage points of municipal taxation, considering one percentage point this year is $352,448.77.
Since the inception of the portfolios in 2019, they have provided total returns of $28,910,866.31, which is equal to about 82 percentage points of municipal taxation.
Investment policy amendments
During the investment committee’s May meeting, members approved several changes to the investment policy that Jerrod Schafer, an advisor with RBC Dominion Securities, and finance director Brian Acker put forward as part of an annual review of the document.
Those changes — which council unanimously approved — included:
- Adding definitions about guaranteed investment certificates (GICs) and the Canadian Insurance Deposit Corporation (CDIC)
- With the fixed income pool, the committee considered listing restrictions as “redundant,” so it removed them since they were already on a chart in the policy. Meanwhile, the committee added a national bank, a $100,000 limit per CDIC user and increased the weighting of the overall portfolio to 100 per cent
- With the moderate- and long-term portfolios, the committee set issuer maximums at 10 per cent of the entire portfolio or 15 per cent of the asset class while it removed “the redundant information” under cash, fixed income and equities
- The committee added “non-investment grade bonds” as a sub-category under “other considerations” since members thought it was important to list such considerations even though RBC doesn’t list them in its internal policy
Council comments
During the council meeting, Coun. Dawn Luhning, a member of the investment committee, explained that the municipality’s investment policy is based on a long-term timeline, which allows the city to weather short-term downturns in the market.
Meanwhile, the committee would review and revise the portfolios annually to align with best practices in the industry, she added.
The next regular council meeting is Monday, June 10.
