The City of Moose Jaw’s investment portfolios gained more than $6 million during the fourth quarter of 2023, an increase of nearly $5 million from the previous quarter.
During city council’s Feb. 12 regular meeting, the investment committee presented a report with the fourth-quarter results. Council then voted unanimously to receive and file the document.
The report showed there was $75,976,256 in the long-term portfolio and $25,691,088 in the moderate-term portfolio as of Dec. 31, 2023, for a total of $101,667,344.
Moderate-term portfolio
The report showed that from Oct. 1 to Dec. 31, the moderate-term portfolio increased by 4.58 per cent and gained $1,124,432.29. This increased the portfolio to $25,691,088 from $24,566,656.
The year’s total percentage increase for this portfolio was 7.04 per cent.
Long-term portfolio
The report showed that from Oct. 1 to Dec. 31, the long-term portfolio increased by 6.99 per cent and gained $4,966,420.48. This increased the portfolio to $75,976,256 from $71,009,836.
The year’s total percentage increase for this portfolio was 9.81 per cent.
Combined, both portfolios gained $6,090,852.77 during the fourth quarter, which is equal to roughly 18.41 percentage points of municipal taxation; one percentage point last year was $330,701.
In comparison, both portfolios lost $1,570,380.56 during Q3; the difference from the third to the fourth quarter was $4,520,472.21.
Since their inception in July 2019, both portfolios have produced a total return of $23,748,953.35, equal to a municipal tax hike of roughly 71.81 percentage points.
Also, since inception, the moderate-term portfolio return has been 4.41 per cent and the long-term portfolio return has been 5.86 per cent, above and below the targeted thresholds of 4.25 per cent and six per cent, respectively.
Investment committee meeting
The minutes from the investment committee show that city administration planned to provide the group with dates to meet with investment manager RBC Dominion Securities (RBCDS) to update the investment policy and discuss forecasting potential planned withdrawals in 2025 and 2026.
Furthermore, the committee authorized RBCDS to proceed in May with an immediate payout of $1,694,894 from the long-term portfolio and a payout of $1,376,001 from the moderate-term portfolio from the maturity of guaranteed investment certificates (GICs).
Council comments
During the council meeting, Coun. Dawn Luhning, a member of the investment committee, said the portfolios have produced a rate of return of roughly $5.5 million annually — equivalent to a municipal tax hike of 15.85 percentage points — that council has used to fund services and programs.
Meanwhile, she explained that the municipality’s investment policy is based on a long-term timeline, which allows the city to weather short-term downturns in the market, as happened in 2022.
Moreover, the investment committee has structured the investments so there are liquid assets — such as GICs — that mature in the coming years, ensuring the committee does not need to sell equity or bond investments in those down years to fund planned cash-flow needs.
Luhning added that the committee would review and revise the portfolios annually to align with best practices in the industry.
The next regular council meeting is Monday, Feb. 26.
