{"id":41703,"date":"2016-05-11T10:42:36","date_gmt":"2016-05-11T15:42:36","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=41703"},"modified":"2016-05-11T10:42:36","modified_gmt":"2016-05-11T15:42:36","slug":"chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\/","title":{"rendered":"Chicago investment returns on track to beat last year: City Treasurer Office"},"content":{"rendered":"<p><strong>By <a href=\"http:\/\/news.medill.northwestern.edu\/chicago\/?s=Harvard+Zhang+\" target=\"_blank\">Harvard Zhang<\/a><\/strong><\/p>\n<p class=\"dropcap\">The return on Chicago\u2019s investment portfolio is on track to beat last year\u2019s results thanks to the re-allocation of funds into higher-yield bonds.<\/p>\n<p>Chicago generated $15 million of revenue\u00a0on &#8220;traditional reserves&#8221; from Skyway and parking meter revenues\u00a0in the first quarter of 2016, and $22 million on operating funds, according to Miriam Martinez,\u00a0chief investment officer of the City Treasurer Office, who said\u00a0the total return for all of 2015 was\u00a0nearly $57 million. Investment yield edged up in the first quarter, and the city stuck to its policy of requiring a minimum of a AA rating\u00a0of its investments.<\/p>\n<p>\u201cWe have hit some milestones, and we will have better figures in the second quarter,\u201d Martinez said Tuesday during a conference call. \u201cThe biggest thing is not keeping $3 billion to $4 billion in money- market and short-term cash, which is not necessary.\u201d<\/p>\n<p>The rosy\u00a0report came as the third-most-populated U.S. city has been grappling with its $26.8 billion pension liabilities after years of shortchanging its six retirement funds. Chicago\u2019s general-obligation bonds have been pinned in the junk territory by the Moody\u2019s Investors Service credit rating of Ba1, better than only one other populous city, Detroit.<\/p>\n<p><!--more--><\/p>\n<p>Portfolio yield climbed 28 percentage points to 1.24 percent last quarter from the end of last year. Martinez said the key was re-allocating funds to corporate and municipal bonds while lowering holdings in cash, money-market funds and agency bonds.<\/p>\n<p>The city\u2019s investment portfolio had $1.5 billion in corporate bonds in the latest quarter, $580 million more than the last three months of 2015. Holdings in low-yield money-markets and cash shrank by $821 million.<\/p>\n<p>Investment duration ticked up to 1.65 years from 1.48 years at the end of last year, indicating a higher interest-rate risk for bond prices in the portfolio. Duration measures the sensitivity of the price of a fixed-income investment to a change in interest rates.<\/p>\n<p>Chicago has been punished in the bond market for its financial woes. The most-active Chicago bonds last week, which are due in 2038, were traded for an average of 98 cents on the dollar at a yield of 5.167 percent, according to Bloomberg data. The bonds have a credit spread of 290 basis points over the benchmark AAA-rated debt, widened from a 238-basis-point spread when the bonds were issued in January.<\/p>\n<div class=\"featurecaption\">Photo credit: <a href=\"http:\/\/www.lendingmemo.com\/\" target=\"_blank\">LendingMemo.com<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Harvard Zhang The return on Chicago\u2019s investment portfolio is on track to beat last year\u2019s results thanks to the re-allocation of funds into higher-yield bonds. Chicago generated $15 million of revenue\u00a0on &#8220;traditional reserves&#8221; from Skyway and parking meter revenues\u00a0in the first quarter of 2016, and $22 million on operating funds, according to Miriam Martinez,\u00a0chief [&hellip;]<\/p>\n","protected":false},"author":224,"featured_media":41706,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,2582],"tags":[],"class_list":["post-41703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-spring-2016"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Chicago investment returns on track to beat last year: City Treasurer Office - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chicago investment returns on track to beat last year: City Treasurer Office - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Harvard Zhang The return on Chicago\u2019s investment portfolio is on track to beat last year\u2019s results thanks to the re-allocation of funds into higher-yield bonds. Chicago generated $15 million of revenue\u00a0on &#8220;traditional reserves&#8221; from Skyway and parking meter revenues\u00a0in the first quarter of 2016, and $22 million on operating funds, according to Miriam Martinez,\u00a0chief [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/news.medill.northwestern.edu\/chicago\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\/\" \/>\n<meta property=\"og:site_name\" content=\"Medill Reports Chicago\" \/>\n<meta property=\"article:published_time\" content=\"2016-05-11T15:42:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/05\/chicago-1100.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1100\" \/>\n\t<meta property=\"og:image:height\" content=\"825\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"harvardzhang\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"harvardzhang\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/news.medill.northwestern.edu\\\/chicago\\\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/news.medill.northwestern.edu\\\/chicago\\\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\\\/\"},\"author\":{\"name\":\"harvardzhang\",\"@id\":\"https:\\\/\\\/news.medill.northwestern.edu\\\/chicago\\\/#\\\/schema\\\/person\\\/1b52656dd48c767280c1dd00f2219e7a\"},\"headline\":\"Chicago investment returns on track to beat last year: City Treasurer Office\",\"datePublished\":\"2016-05-11T15:42:36+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/news.medill.northwestern.edu\\\/chicago\\\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\\\/\"},\"wordCount\":390,\"image\":{\"@id\":\"https:\\\/\\\/news.medill.northwestern.edu\\\/chicago\\\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/news.medill.northwestern.edu\\\/chicago\\\/wp-content\\\/uploads\\\/sites\\\/3\\\/2016\\\/05\\\/chicago-1100.jpg\",\"articleSection\":[\"Business\",\"Spring 2016\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/news.medill.northwestern.edu\\\/chicago\\\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\\\/\",\"url\":\"https:\\\/\\\/news.medill.northwestern.edu\\\/chicago\\\/chicago-investment-returns-on-track-to-beat-last-year-city-treasurer-office\\\/\",\"name\":\"Chicago investment returns on track to beat last year: City Treasurer Office - 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