District’s laddered portfolios boost income; advisors outline Fed outlook and yield strategy
Summary
Public Trust Advisors reviewed Lee Schools' 1–3 and 1–5 year portfolios, reporting average book yields near 3.9% and substantially higher net income compared with prior years. Advisors tied portfolio performance to Fed and yield-curve expectations and recommended continued laddering for safety.
Public Trust Advisors presented the district’s annual investment review at the Dec. 1 workshop, highlighting how a laddered portfolio strategy preserved book yields and produced materially higher net income for Lee County Schools.
John Grady, managing director at Public Trust, tied the district’s earnings to broader economic indicators and market expectations about the federal funds rate. “The market is expecting further rate cuts in that overnight rate,” Grady said, but he cautioned markets forecast changes and the district’s disciplined program does not chase short-term signals.
Grady outlined two core portfolios: a 1–3 year portfolio (average maturity about 1.8 years) and a 1–5 year portfolio (average duration ~2.5 years). He said the portfolios are heavily weighted to U.S. Treasuries (over 93% in one portfolio) with small allocations to investment-grade corporate notes and municipal bonds in compliance with the district’s policy. For the 12 months ended June 30, Grady reported an average book yield around 3.9% and said the district’s approach nearly doubled net income for the 1–3 year sleeve and substantially increased the 1–5 year pocket compared with prior years.
Board members praised the returns and thanked the advisors for strategic stewardship. The presenters noted the portfolios’ purpose is to protect against declining interest rates by laddering and preserving book yields rather than attempting to time the market.
No action was taken during the workshop; the board will consider investment policy and compliance as part of regular governance.
