COLOTRUST adviser briefs Monte Vista on portfolio yields and 2025 rate outlook

Brett Parsons, a relationship manager and investment adviser representative for COLOTRUST, briefed the Monte Vista City Council on COLOTRUST’s operations, the city’s investment performance for fiscal year 2024, and the near-term rate outlook.

Parsons described COLOTRUST as a Colorado local government investment pool (LGIP) authorized under Colorado Revised Statutes, noting it is organized as a trust administered by a board of trustees representing municipalities, counties, school districts and special districts. He said COLOTRUST manages funds for over 2,000 local-government participants statewide and that total assets managed are approximately $14.8 billion.

Parsons explained participants can select among COLOTRUST Prime and COLOTRUST Plus portfolios (and a longer-term vehicle called Edge). Prime holds U.S. treasuries, agencies and repos and is structured to minimize credit risk; Plus allows highly rated commercial paper and offers a higher yield in exchange for credit exposure. He said COLOTRUST Prime’s daily rate was about 4.27% and COLOTRUST Plus about 4.47% at the time of the presentation.

Discussing Monte Vista’s accounts, Parsons said the city’s average yield for 2024 on COLOTRUST holdings was about 5.06% (Prime/Plus blended in the participant reporting) and that the city earned roughly $4,700 of interest in one account and more than $57,000 combined interest from its COLOTRUST Plus holdings during the fiscal year. He noted the city has participated in COLOTRUST since December 1998.

On interest-rate outlook, Parsons reviewed the Federal Reserve’s December dot plot and market-based probability curves: the Fed’s median December projection at that time indicated an expectation of rate cuts in 2025 but market pricing then implied fewer or later cuts (Parsons said markets at that time were pricing a first cut closer to September 2025). Parsons emphasized that economic data, inflation metrics and policy developments can change market expectations.

Parsons prefaced his remarks by saying the presentation is not legal advice and that COLOTRUST is not a bank; he encouraged staff to consult counsel on legal or investment-policy questions. The council had no substantive action on the briefing; Parsons answered questions from councilors before concluding his presentation.

Provenance (excerpted): Presentation begins when Parsons introduces himself and COLOTRUST and continues through the Q&A (presentation starts at transcript block ~585.55 and concluded around ~1362.27).