Pitkin County portfolio sees higher yields; advisors flag Fed policy and balance‑sheet risks

Chandler Asset Management briefed the Pitkin County Board of County Commissioners on Aug. 18 on the county investment portfolio through June 30, 2026, reporting a total market value just over $152 million and an average purchase yield that has climbed into the high‑3% range.

The advisory team framed the results around the macro backdrop — slower payroll growth, elevated inflation measures and higher short‑term rates — and explained how those factors feed into county returns and portfolio risk. "This portfolio is well positioned for the long run," said Kyle Perry of Chandler, describing a conservative duration posture (average modified duration about 1.84 vs. a 1–3 year Treasury/agency benchmark of 1.75) and an emphasis on safety and liquidity.

Chandler said the county benefits from reinvesting at higher short‑term yields, but that gain is balanced by unrealized losses on existing securities when market yields rise. Advisors noted that reinvestment will improve income, while marking-to-market can reduce reported short‑term performance. "When rates go up, the market values decline, right? But it's an unrealized loss," the presentation said.

The portfolio mix remains treasury‑heavy (roughly three‑quarters U.S. Treasuries) with a high average credit quality (about AA+). Staff noted recent additional investments of roughly $20 million in May to take advantage of higher yields and said they hold securities to maturity to avoid realizing losses. Chandler also reviewed liquidity held in three local government investment pools and outlined compliance with the county's investment policy and Colorado Revised Statutes.

Commissioners asked about Federal Reserve policy scenarios and the effect of balance‑sheet runoff versus explicit rate moves on longer‑term yields. Advisors said the Fed's recent organizational changes and task forces could affect communications and the path of policy, but Chandler's near‑term expectation is for the Fed to remain on hold for the remainder of the year.

What’s next: staff will continue quarterly reporting and bring detailed performance and holdings statements to the board; Chandler recommended continued conservative duration management while locking in higher reinvestment yields.