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Aye: Hoefner, Hamlington, Cooperman <br />Nay: None <br />Absent: None <br />PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA <br />None <br />CHANDLER INVESTMENT PRESENTATION — ECONOMIC OUTLOOK & <br />INVESTMENT UPDATE (pg. 6/73)— Julie Hughes, Senior Portfolio Strategist, Kara <br />Hooks, Portfolio Strategist, Kyle Perry, Portfolio Strategist, Chandler Asset Management <br />Director Bailey introduced Julie Hughes and Kyle Perry from Chandler Investments. <br />Chandler Investments shared the screen, Kyle Perry presented economic update first <br />followed by Julie Hughes. <br />Councilmember Cooperman asked how duration is an indicator of risk. <br />Julie Hughes responded over the duration, as the rates move, for example for every one <br />percent move in interest rates, your portfolio price action is going to move in that same <br />magnitude. If rates go down one percent over a one-year duration the fair market value <br />of your portfolio is going to go up about one percent. If you have a two-year duration, the <br />price of the securities in your portfolio will move two percent. It is an order of magnitude; <br />as interest rates change, the prices of the market value of the securities in the portfolio <br />change. A one-year duration is pretty conservative. If rates go up one percent, the prices <br />of your securities are going to go down one percent and vice versa. If you have a two- <br />year duration, it is going to move twice as much. <br />Julie Hughes continued stating that it is still pretty moderate in its risk profile, typically <br />going to be about 1.4 years. Of course, in a declining rate environment your market value <br />will go up but that is the risk. She stated that it is an oversimplification but that is essentially <br />how it works — that inverse relationship. <br />Councilmember Cooperman asked about the motivation behind investing in the <br />corporate. <br />Julie Hughes responded that it was a discussion with Director Bailey in terms of the City's <br />risk tolerance and preferences for staying with government securities at this point in time. <br />It is still permitted by your investment policy and Colorado revised statutes. Invited <br />Director Bailey to respond as well. <br />Director Bailey replied that as far as corporate bonds go, due to how limited we are by <br />state statute, we do not have a lot of options for example, Walmart, Amazon, Apple, so <br />especially looking at the returns you get, they are not much delta to the federal <br />government, that is sort of where we've been going. I am happy with that performance <br />and that decision at this time. <br />4/38 <br />