City hears investment update: advisers report strong recent returns and recommend annual indexing

Shuster Advisory Group presented an update Nov. 17 on La Verne’s municipal investment portfolio, telling the council the portfolio is high quality and well positioned to capture current yields while hedging pension liabilities.

Mark Schuster and Michael Gonzalez, representing Shuster Advisory Group, described the city’s holdings — U.S. Treasuries, agency bonds, mortgage-backed securities and investment-grade corporates — and explained how an active approach seeks relative value in a volatile market. Gonzalez said the portfolio’s yield-to-worst is about 3.84% and noted a duration of roughly 2.2 years, which positions the city to benefit if interest rates decline. He described the city’s 115 pension-stabilization trusts as a hedge against CalPERS performance variability and said recent returns have been strong.

“We serve as fiduciaries and consultants for over 115 cities and agencies throughout California,” Mark Schuster said, and reminded the council of the city’s fiduciary duty under state law: “every asset of a city, a city is a fiduciary. They're a trustee of those assets.” Councilmembers praised staff and the advisers for the work, noting that improved returns have helped ease pressure on rates and long-term liabilities.

No formal action was required. Finance Director Christy Lopez thanked the advisers and councilmembers for their support and said staff would continue to monitor markets and implement the investment policy.

Why it matters: the presentation outlined how the city balances risk and return across operating cash, bond portfolios and pension-stabilization accounts; it also provided context for the council’s budget and long-term liability planning.