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CITY OF SAN LEANDRO <br />MEMORANDUM <br />DATE: January 24, 2005 <br />TO: Finance Committee <br />FROM: Jesse Baloca, Finance Director <br />SUBJECT: Investment Report - Quarter Ended December 31, 2005 <br />RECOMMENDATION <br />Staff recommends Finance Committee acceptance of the attached investment report for the <br />quarter ended December 31, 2005. <br />OVERVIEW <br />On December 31, 2005 the City's investment portfolio had a market value of $48.4 million, <br />which is an increase of $320 thousand from September 30, 2005. Currently, the City's LAIF <br />investments account for 18.2% of the City's total investments. The investment portfolio <br />managed by Chandler had a December 31, 2005 average book yield of 3.40%, an increase from <br />3.28% on September 30, 2005. <br />The average maturity of the Chandler portfolio for the December 31, 2005 was slightly under 2 <br />years and is performance measured against 1-3 year government securities benchmark. As of <br />January 24, 2006 the 2-year Treasury rate of 4.37% continues to exceed the 3, 5, and 7-year <br />Treasury rates of 4.33%, 4.32%, and 4.34%, respectively. <br />Since inception (May 2004), the performance gain to the City, less the fees paid to Chandler for <br />portfolio management, is $179,041 and remains overall favorable as compared to LAIF. <br />However, as of December 31, 2005, LAIF's 3.63% yield exceeds the City's portfolio with <br />Chandler of 3.40%. Also as of January 24, 2006, the 3-month to 1-year Treasury rate exceeds the <br />current average maturity. As a result, upcoming maturities will be evaluated prior its <br />reinvestment into either LAIF or with Chandler Asset Management with a strategy of possibly <br />further reducing the average maturity. <br />E:\InvestnientsldnvestmentReport 12-31-05. doc <br />