County hears market update as advisers outline portfolio mix, past losses and liquidity

PFM Asset Management and Peaks Investment Management presented the Natrona County Board of Commissioners with a second-quarter market and portfolio review, focusing on uncertainty in labor markets, tariff-driven price effects and the countyportfoliomix.

Joan Evans, director with PFM Asset Management in Cheyenne, told the board the market theme for the quarter was —uncertainty,— pointing to weaker hiring rates, tariff revenues that rose sharply year-over-year and recent Federal Reserve policy moves. Evans said the county packet covers results through June 30, 2025, and that the Fed remained —on hold— for most of 2024 before tightening and then cutting the overnight rate to a 4.0024.25 percent range in September, citing labor-market risk.

Evans described the countyportfoliopositioning: PFM manages a portfolio the presentation lists at just over $51 million, with about $6 million in a liquid Wyoming Government Investment Fund. Credit quality is in line with state statute requirements (minimum A-minus); the countyportfolio was reported as AA quality under the metrics PFM uses. The presentation showed the county had introduced corporate notes into the portfolio after a policy change last spring, setting a 20% maximum allocation; corporate exposure was roughly 10% at the end of Q2 and the presenters said it rose to approximately 13% in early Q3, with managers adding corporates selectively given multi-year low spread conditions.

Troy Hunsaker of Peaks Investment Management reviewed the countyhospital funds, which he said sit just under $55 millionand are predominantly invested in AAA- and AA-rated securities. He said the Peaks-managed portion is yielding about 4.4% and projected income for the year of roughly $2.435 million. Hunsaker noted Wyoming Class liquidity yields near 4.1% and recommended the county use that liquid pool for immediate cash needs while keeping longer-term Treasuries and agencies for yield and safety.

Commissioners asked several technical questions. One thread of discussion centred on —core— inflation measures (core PCE excludes food and energy) and whether such measures understate the pocketbook effect of food and energy price swings. Evans and Hunsaker said the core series strips volatile components to present a less noisy, more policy-relevant view for the Fed, and they discussed tradeoffs between headline and core measures.

Advisers also reviewed a prior loss tied to earlier state pooled products (Wildstar 1/2) in which changing interest-rate environments produced realized losses when participants redeemed and managers sold positions. Hunsaker and Evans described the mechanics (unrealized market-value declines when rates rose and losses crystallized on outsized redemptions) and emphasized the diversification steps taken since then: the county now uses multiple managers and separate pools to reduce concentration risk.

Evans said the managed portfolio earned 1.42% during Q2 2025 versus a 1.28% benchmark (exceeding the benchmark by 14 basis points), with outperformance since inception of about 27 basis points. Commissioners thanked the advisers; no formal action on investments was taken at this meeting.