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Monthly Investment Analysis

Report of the Chamberlain

Minutes:

The Board received a report of the Chamberlain concerning the monthly investment analysis review for March 2019. The Board noted the current investment list, total investment values and average rate of return set out in the report.

 

The Chairman drew Members’ attention to the current investment list and suggested the Board consider further investment in short-dated bond funds, given their higher average rate of return. The Chamberlain advised that the counterparty limit for short-dated bond funds was £100 million and suggested that the Board consider an investment of an additional £25 million in each of the two funds. The Chamberlain added that whilst interest rates were going up for this type of investment they could also fall in the future. It was possible to withdraw from the funds at short notice. The Board agreed that officers should look at an additional investment of £25 million in each of the short-dated bond funds, making a total of £75 million in each. In discussing overall cash flows the Chamberlain added that there were more funds available than at February as the collection of business rates had resumed since then.

 

A Member asked whether any of the current allocations were considered competitive, citing the performance of Payden Sterling Reserve Fund.  It was noted that this was indicative of a different risk appetite and the Chamberlain responded that risk appetite in general would be reviewed, and that commentary on the performance of the Payden fund would be provided between meetings.

 

A Member asked for clarification on the downgrading of the Support Rating of Canadian Banks. The Chamberlain responded that this related to action taken by the prudential authorities in Canada that meant the Canadian banks had a lesser degree of support from the Canadian government, and so were considered to carry a greater degree of risk in this regard. The Chamberlain added that a fuller note on this action and its implications would be circulated to Members of the Board.

 

RESOLVED – That the report be noted, and that an additional investment of £25 million be made into each of the short-dated bond funds L&G and Royal London.

Supporting documents:

 


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