The city’s investment portfolio continues to get pinched amid slow economic recovery, officials reported this week, ending $11 million down compared to the previous fiscal quarter.
With the third quarter results out, the $385-million portfolio has now been on a downward trend for more than a year.
“In a nutshell, it’s not getting easier out there,” City Treasurer Ron Borucki told the City Council on Tuesday.
The rate of return for the third quarter dropped 10 basis points to 1.02% at the end of March, according to a city report.
The year-to-date rate of return for the portfolio was 1.11% through the first nine months of the year, the report stated.
“I wish it was a little better news,” said City Manager Scott Ochoa. “Alas, the market is what it is.”
Interest rates have been down the last 13 quarters, Borucki said. That doesn’t bode well for a fixed-income portfolio that focuses on bond investments.
Borucki pointed to crises in Europe, including debt-ridden Greece and Spain, as exacerbating the low interest rates in the United States. Europe’s financial headaches are pushing the investment community to treasuries, which drives bond prices up and interest rates down, Borucki said.
“Actions in Europe influence the investment return of our city portfolio here in Glendale — Glendale, Calif., half a world away from the problems in Europe,” he said.
-- Brittany Levine, Times Community News