Page 9 - City of Moreno Valley Invstment and Cash Management Program

The City’s Investment Policy
AND GOVERNMENT CODE

The investment types allowed by both Government Code and the City’s Investment Policy are
very conservative and focus on preserving principal. These governing documents allow the
portfolio to hold only fixed income securities (bonds) and exclude riskier types of investments
such as equities (stocks) and other more exotic types of securities. The combination of the
conservative securities mix along with the fact that markets have been at all-time historic lows
since 2008 have resulted in the yields that are currently being experienced by the portfolio.

The City monitors the performance of the portfolio against market benchmarks that have a
security mix similar to that held in the City’s portfolio. The City’s portfolio characteristics can be
described as holding a mix of Treasury’s, Government Agencies and Medium Term Corporate
Notes and when the portfolio is compared to the benchmarks the portfolio’s performance is
generally in line with those benchmarks.

HISTORIC YIELD COMPARISON

6.0% 1 Yr Treas 2 Yr Treas 5 Yr Treas LAIF
5.5%

5.0%
4.5%
4.0%

3.5%
3.0%
2.5%
2.0%
1.5%

1.0%
0.5%
0.0%
Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 May-11 Jun-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Ap

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