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Redtree: Fostoria’s $17 million in funds earning about 4.5%; advisor suggests shifting $1 million into fixed income
Summary
Redtree Investment Group presented the city’s portfolio performance to the finance committee, reporting roughly $17 million in total funds yielding about 4.5%, advising rebalancing toward fixed income and noting expectations for future Fed moves; the city said it will issue a banking RFP.
FOSTORIA — Redtree Investment Group told the Fostoria Finance Committee that the city’s combined cash and investment accounts total about $17 million and are yielding just over 4.5%, and the firm recommended reallocating a portion of cash into fixed-income securities to lock in higher rates.
"Steve provided the information for the premier bank accounts in Star, Ohio at the April and the Red Tree investment account and in total funds is a little over 17,000,000," Ryan Nelson of Redtree said. Nelson said the portfolio is diversified and that the fixed-income portion currently represents about 43% of investments while cash makes up about 57%. "There could be a potential reallocation out of the star money in the premier money market fund to investments," he said, suggesting roughly $1 million as a candidate for reallocation to capture multi-year yields.
Nelson described portfolio statistics the committee will use to evaluate timing: the fixed-income segment totals about $7,600,000 and the weighted average maturity is over two years, with nearly 40% of holdings maturing in three or more years. "That means we've locked higher interest rates in over the past year and a half," he said. He also noted market expectations the Federal Reserve could lower rates later in 2025: "Right now ... the Federal Reserve is anticipated to lower interest rates at least 2 times inherent in 2025." The presentation included a range of economic context: inflation, labor markets and geopolitical risks.
The committee discussed the city’s banking relationship. Finance Director Steve said the city will issue a request for proposal for banking services — a routine practice every five years — with results expected by mid-June and any change effective in July. One council member said Premier’s aggressive money-market rate may change following recent structural changes at that bank.
No formal action was taken; Redtree’s presentation served as an informational update and a starting point for potential portfolio reallocation decisions.
