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Budget committee recommends short-duration UBS advisory solution for city portfolio, warns of short-term realized losses
Summary
Committee recommended the City Council consider hiring UBS to manage Clayton’s investment portfolio using a short-duration Treasury strategy; staff said a full transition of the roughly $12 million portfolio would realize about $126,000 in paper losses but could be recouped by higher yield within about a year.
The Clayton City Budget and Audit Committee on Jan. 13 recommended that the City Council consider engaging UBS’s advisory program and, subject to Council approval, pursue a short-duration U.S. Treasury portfolio for the city’s invested reserves. Committee members said the short-duration strategy is the most conservative option presented and noted the trade-off between taking short-term realized losses and capturing current higher yields.
James Dill, a UBS representative, presented two advisory solutions: a short-duration Treasury portfolio (average duration about one year, maximum maturity three years, current yield cited at about 4.28 percent) and a broader investment-grade government and credit short-term…
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