City investments lost over $500K during this year’s third quarter

The City of Moose Jaw’s stock investments lost over $500,000 during the third quarter of this year, while both portfolios have lost more than $14 million year-to-date.

During city council’s Nov. 14 regular meeting, council received the investment committee’s report with results from Q3 of 2022. Council then voted unanimousO\ WR UHFHLYH DQG ¿OH WKH GRFXPHQW

There was $23,712,577.23 in the moderate-term portfolio and $66,994,498.29 in the long-term portfolio as of Sept. 30, for a total of $90,707,075.52. In comparison, as of June 30, those numbers were $23,769,314.80, $67,471,316.63 and $91,240,631.43, respectively.

At one point, the investments were worth $102 million.

Moderate-term portfolio

The report showed from July 1 to Sept. 30, the moderate-term portfolio decreased by 0.24 per cent and lost $56,737.57. This dropped the portfolio to $23,712,577.23 from $23,769,314.80.

Year-to-date, the portfolio has declined 7.80 per cent.

Long-term portfolio

From July 1 to Sept. 30, the long-term portfolio decreased by 0.71 per cent and lost $476,818.34, the report showed. This dropped the portfolio to $66,994,498.29 from $67,471,316.63.

Jason G. Antonio - Moose Jaw Express

Year-to-date, the portfolio has declined by 13.79 per cent.

Combined, both portfolios lost $533,555.91 during the third quarter, equal to about 17 percentage points in municipal taxation.

One percentage point this year equalled $310,755.26 in municipal taxation.

In comparison, both portfolios lost about $8.05 million during the second quarter, equal to about 26 percentage points in municipal taxation. Moreover, the portfolios lost $4.7 million in Q1, equal to about 15.3 percentage points in municipal taxation.

Committee response

Coun. Dawn Luhning, a member of the investment committee, explained that 4.25 per cent is the annual return percentage objective for the moderate-term portfolio. However, that number stands at 3.06 per cent.

Furthermore, six per cent is the annual return percentage objective for the long-term portfolio. Yet, since its inception, the return has been 3.31 per cent.

Meanwhile, the city has an extra $2,716,000 of long-term portfolio money invested in its bank account, providing a return of 4.35 per cent. That money will return to the actual portfolio once money manager RBC Dominion Securities selects a longer-term investment option for those funds.

³7KH ¿UVW WKUHH TXDUWHUV RI LV VHHLQJ WKH ¿QDQcial markets experience volatility, and this is something the city expects and has anticipated in its investment policy,” said Luhning.

These investments are different from the money that individuals contribute because there is usually an endpoint for the latter investments, whereas a corporation — such as Moose Jaw — has an unending lifespan, she continued.

(YHQ WKRXJK WKH ORVVHV DUH GLI¿FXOW WR WDNH ² DQG have been for everyone — the markets “always go up,” and there are opportunities for the municipality to invest LQ ERQGV DQG *,&V WKDW ZLOO EH EHQH¿FLDO LQ WKH VKRUW term.

The committee takes a long-term view on investments, which allows the city to weather short-term market downturns, Luhning said. The committee has also structured the investments so there are liquid assets — such as GICs — that will mature during the next few years. This ensures the committee doesn’t have to sell equities and bonds during this downturn.

“The city’s investment manager will be re-balancing the moderate- and long-term portfolios when there is strength in the market to a neutral asset mix, adding … bonds and quality dividend funds,” she added.