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LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
LGIP Q2 2012
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LGIP Q2 2012

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Q2 2012 Quarterly Update for Local Government Investment Pools (LGIP)

Q2 2012 Quarterly Update for Local Government Investment Pools (LGIP)

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  • 1. LGIP QUARTERLY MEETING & CONFERENCE CALL 1.26.2012 OFFICE OF THE ARIZONA STATE TREASURER
  • 2. AGENDA  Earnings  LGIP Performance  New LGIP Product  Endowment Performance  Endowment Distribution  State Cash Flow/Arizona Economic Update  Economic Presentation: Joseph P. Quinlan, Managing Director & Chief Market Strategist, U.S. Trust, Bank of America Private Wealth Management  Q&A ARIZONA STATE TREASURER DOUG DUCEY
  • 3. INVESTMENT PHILOSOPHY SAFETY before LIQUIDITY before YIELD ARIZONA STATE TREASURER DOUG DUCEY
  • 4. EARNINGS FOR FY 2012 YTD $63,384,105 ARIZONA STATE TREASURER DOUG DUCEY
  • 5. LGIP PERFORMANCE Q2FY 2012
  • 6. POOL 5 $1.54 Billion Assets as of 12/31/2011 Net Asset Value - $ .9999 12/31/2011 Diversified investments weighted to highly rated Commercial Paper, Repurchase agreements, and Agency/Treasuries third ARIZONA STATE TREASURER DOUG DUCEY
  • 7. POOL 7 $1.6 Billion Assets as of 12/31/2011 Net Asset Value - $ 1.000 12/31/2011 All securities backed by U.S. Government ARIZONA STATE TREASURER DOUG DUCEY
  • 8. POOL 500 $219.5 million as of 12/31/2011 Floating Net Asset Value - $1.038 as of 12/31/2011 Keep maximum exposure to any credit at 2.5% ARIZONA STATE TREASURER DOUG DUCEY
  • 9. POOL 700 $145.4million as of 12/31/2011 Floating Net Asset Value - $ 1.014 as of 12/31/2011 All securities backed by U.S. Government ARIZONA STATE TREASURER DOUG DUCEY
  • 10. LGIP NEW PRODUCT
  • 11. Separately Managed Accounts (SMAs)  Designed for those seeking a customized investing solution based on your risk tolerance, liquidity needs and duration target  Monthly Liquidity  Requires $100 million minimum deposit  Pre-Meeting with Portfolio Manager to set up Account and determine investing needs  Costs: Standard 6 basis points, plus yearly accounting charges of about $20,000 that will come out of earnings (equivalent to 2 basis points) ARIZONA STATE TREASURER DOUG DUCEY
  • 12. POOL 12 $263.3 million in assets as of 12/31/2011 Net Asset Value - $1.023 12/31/2011 Invests in single A and above credit. Duration is at 2.26 years vs. benchmark of 4.92 years Client requires 20% of assets under one year maturity ARIZONA STATE TREASURER DOUG DUCEY
  • 13. ENDOWMENTPERFORMANCE Q2 2012 OFFICE OF THE ARIZONA STATE TREASURER
  • 14. ENDOWMENT TRUST LANDS Bureau of Land Management (17%) US Forest Service (15%) Tribal Reservations (28%) Privately-owned land (17%) State trust land (13%) ARIZONA STATE TREASURER DOUG DUCEY
  • 15. ENDOWMENT ASSET ALLOCATION $3.23 billion 7.6% Fixed Income $1,549.4 million $542.2 million 14.7% $1,600.04M $502.79M 43.3% S&P 500 34.4% S&P 400 $1,122.1 million $1,052.42M S&P 600 (As of 12/31/2011) ARIZONA STATE TREASURER DOUG DUCEY
  • 16. Billions $1.50 $0.00 $0.50 $1.00 $2.00 $2.50 $3.00 $3.50 $4.00 December 2006 February 2007 April 2007 June 2007 August 2007 October 2007 December 2007 February 2008 April 2008ARIZONA STATE TREASURER DOUG DUCEY June 2008 August 2008 October 2008 December 2008 February 2009 April 2009 June 2009 August 2009 October 2009 Endowment Market Value December 2009 February 2010 April 2010 June 2010 August 2010 October 2010 ENDOWMENT MARKET VALUE December 2010 February 2011 $3.23 Billion April 2011 June 2011 August 2011 October 2011 December 2011
  • 17. Millions $200.00 $1,000.00 -$200.00 $0.00 $400.00 $600.00 $800.00 December 2006 February 2007 April 2007 June 2007 August 2007 October 2007 December 2007 February 2008 April 2008ARIZONA STATE TREASURER DOUG DUCEY June 2008 August 2008 October 2008 December 2008 February 2009 April 2009 June 2009 August 2009 October 2009 December 2009 February 2010 April 2010 Total Endowment Unrealized Gains/Losses June 2010 August 2010 October 2010 December 2010 February 2011 ENDOWMENT UNREALIZED GAINS April 2011 June 2011 August 2011 October 2011 $722 million December 2011
  • 18. ENDOWMENTDISTRIBUTION OFFICE OF THE ARIZONA STATE TREASURER
  • 19. K-12 DISTRIBUTIONS $90.00 Millions New Record Distribution for FY 2012: $77,832,917 $80.00 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ARIZONA STATE TREASURER DOUG DUCEY
  • 20. STATE CASH FLOW OFFICE OF THE ARIZONA STATE TREASURER
  • 21. STATE CASH FLOW TOTAL OPERATING ACCOUNT AVERAGE MONTHLY BALANCE$3,000 Up 33% in First Half YOY Thousands Dec07-June 09 of Dollars Recession$2,500 Mar01-Nov 01 Recession Jul 90-Mar 91 $979 million$2,000 Recession in Dec.$1,500$1,000 $500 $0 -$500-$1,000 ARIZONA STATE TREASURER DOUG DUCEY
  • 22. STATE CASH FLOW$2,500 State Operating Balance CY$2,000 2007 - CY 2011:$1,500$1,000 $500 $0 -$500-$1,000 ARIZONA STATE TREASURER DOUG DUCEY
  • 23. STATE CASH FLOW$1,600,000 FYTD 2012 Cash Flow vs. 2011$1,400,000$1,200,000$1,000,000 $800,000 $600,000 $400,000 $200,000 FY 2011 FY 2012 Actual $- 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 1-Jan ARIZONA STATE TREASURER DOUG DUCEY
  • 24. ARIZONA ECONOMIC UPDATE OFFICE OF THE ARIZONA STATE TREASURER
  • 25. AZ NON-FARM EMPLOYMENT3000 Dec 07-Jun 09 Recession2750 Mar01-Nov 01 Recession25002250 AZ Job growth remains slow Jul 90-Mar 912000 Recession1750 Jul 81-Nov 82 Recession150012501000 750 Feb-11 Feb-89 Feb-08 Feb-82 Feb-83 Feb-84 Feb-85 Feb-86 Feb-87 Feb-88 Feb-90 Feb-91 Feb-92 Feb-93 Feb-94 Feb-95 Feb-96 Feb-97 Feb-98 Feb-99 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-09 Feb-10Source:Bloomberg2012 L.P. ARIZONA STATE TREASURER DOUG DUCEY
  • 26. AZ UNEMPLOYMENT AT 8.7%12% Jul 81-Nov 82 Jul 90-Mar 91 Mar01-Nov 01 Dec07-June 09 Recession Recession Recession Recession11% Jan 80-Jul 80 AZ Rate at 8.7% Recession10% 9% National rate of 8.5% in June 8% 7% 6% 5% 4% 3% 2% Jan-11 Jan-76 Jan-93 Jan-10 Jan-77 Jan-78 Jan-79 Jan-80 Jan-81 Jan-82 Jan-83 Jan-84 Jan-85 Jan-86 Jan-87 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09Source:Bloomberg2012 L.P. ARIZONA STATE TREASURER DOUG DUCEY
  • 27. Source: 25 50 75 100 125 150 175 200 225 0 2012 L.P. Bloomberg Jan-90 Jul-90 Jan-91 Jul-91 Recession Jan-92 Jul 90-Mar 91 Jul-92 Jan-93 Jul-93 Jan-94 Jul-94 Jan-95 Jul-95 Jan-96ARIZONA STATE TREASURER DOUG DUCEY Jul-96 Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00 Jul-00 Jan-01 Quarterly Data Jan. 1990 through Sept. 2011 Jul-01 Recession Mar01-Nov 01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 AZ SALES OF EXISTING HOMES Jul-08 Recession Jan-09 Dec. 07- June 09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11
  • 28. Thousands Source: 100 150 200 250 0 50 2012 L.P. Bloomberg 1/1/1989 7/1/1989 1/1/1990 7/1/1990 1/1/1991 7/1/1991 1/1/1992 7/1/1992 1/1/1993 Recession 7/1/1993 Jul 90-Mar 91 1/1/1994 7/1/1994 1/1/1995 7/1/1995 1/1/1996 7/1/1996ARIZONA STATE TREASURER DOUG DUCEY 1/1/1997 7/1/1997 1/1/1998 7/1/1998 1/1/1999 7/1/1999 1/1/2000 7/1/2000 1/1/2001 7/1/2001 AZ HOUSING PRICES 1/1/2002 7/1/2002 1/1/2003 7/1/2003 Recession 1/1/2004 Mar01-Nov 01 7/1/2004 1/1/2005 7/1/2005 1/1/2006 7/1/2006 1/1/2007 7/1/2007 S & P/Case Schiller Housing Price Index for Phoenix 1/1/2008 7/1/2008 1/1/2009 7/1/2009 1/1/2010 7/1/2010 Recession 1/1/2011 Dec. 07- June 09 7/1/2011
  • 29. SPECIAL ECONOMIC PRESENTATION JOSEPH P. QUINLAN MANAGING DIRECTOR & CHIEF MARKET STRATEGISTU.S. TRUST, BANK OF AMERICA PRIVATE WEALTH MANAGEMENT OFFICE OF THE ARIZONA STATE TREASURER
  • 30. QUESTIONS? OFFICE OF THE ARIZONA STATE TREASURER

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