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Treasurer’s report: $93M distributable interest in quarter, LGIP outperforms benchmark
Summary
Deputy Treasurer Steven Hale reported the General Fund distributed $93 million in interest for the quarter ending Dec. 31, 2023 (year-to-date $183 million), overall fund yield 4.47%, LGIP yield 5.32% slightly above benchmark, and staff fielded questions about duration and Fed policy effects.
Deputy Treasurer for Investments Steven Hale presented the State Treasurer’s quarterly investment report for the quarter ended Dec. 31, 2023. Hale reported a distributable interest of $93 million for the quarter and $183 million year-to-date; the overall fund yield was 4.47 percent, internally managed portfolios yielded 4.7 percent, and externally managed portfolios varied with Western Asset Management at 2.84 percent.
Hale reviewed portfolio quality and duration, noting the General Fund contains longer-dated securities that will roll off over time. Board members asked about holdings purchased in 2020–21, the duration differences between the General Fund and the Local Government Investment Pool (LGIP), and whether results depend on Federal Reserve policy. Hale said some assets were purchased in 2020–21 and that the LGIP’s shorter duration contributes to its higher recent yield; he indicated staff expect to be in a similar range in the near term barring major changes in Fed action. The agenda item was informational; no board vote was required.
