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LGIP Q4 2011

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FY 2011 Q4 Local Government Investment Pool Overview

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LGIP Q4 2011

  1. 1. 7.21.2011 LGIP QUARTERLY MEETING & CONFERENCE CALL
  2. 2. AGENDA <ul><li>Earnings </li></ul><ul><li>LGIP Performance </li></ul><ul><li>New LGIP Product </li></ul><ul><li>Endowment Performance </li></ul><ul><li>Endowment Distribution Formula </li></ul><ul><li>State Cash Flow </li></ul><ul><li>Arizona Economic Update </li></ul><ul><li>US Short –Term Credit Outlook: Alex Roever, Head of Short-Term Fixed Income Research, JP Morgan Securities </li></ul><ul><li>Q & A </li></ul>
  3. 3. INVESTMENT PHILOSOPHY <ul><li>SAFETY </li></ul><ul><li>before </li></ul><ul><li>LIQUIDITY </li></ul><ul><li>before </li></ul><ul><li>YIELD </li></ul>
  4. 4. EARNINGS FOR FY 2011 <ul><li>$56,642,619 </li></ul>
  5. 5. LGIP PERFORMANCE 4th Quarter and FY 2011 YTD
  6. 6. POOL 5 <ul><li>$1.46 Billion Assets as of 6/30/2011 </li></ul><ul><li>Net Asset Value = $1.00 as of 6/30/2011 </li></ul><ul><li>Diversified investments weighted to highly rated Commercial Paper first, Repurchase agreements second, and Agency/Treasuries third </li></ul>
  7. 7. POOL 7 <ul><li>$1.8 Billion Assets as of 6/30/2011 </li></ul><ul><li>Net Asset Value - $ 1.0001 as of 6/30/2011 </li></ul><ul><li>All securities backed by U.S. Government </li></ul>
  8. 8. POOL 500 <ul><li>$210.9 million in assets as of 6/30/2011 </li></ul><ul><li>Floating Net Asset Value - $1.0349 as of 6/30/2011 </li></ul><ul><li>Keep maximum exposure to any credit at 2.5% </li></ul>
  9. 9. POOL 700 <ul><li>$120.7 million in assets as of 6/30/2011 </li></ul><ul><li>Floating Net Asset Value - $ 1.0100 as of 6/30/2011 </li></ul><ul><li>All securities backed by U.S. Government </li></ul>
  10. 10. LGIP NEW PRODUCT
  11. 11. Separately Managed Accounts (SMAs) <ul><li>Designed for those seeking a customized investing solution based on your risk tolerance, liquidity needs and duration target </li></ul><ul><li>Monthly Liquidity </li></ul><ul><li>Requires $100 million minimum deposit </li></ul><ul><li>Pre-Meeting with Portfolio Manager to set up Account and determine investing needs </li></ul><ul><li>Costs: Standard 6 basis points, plus yearly accounting charges of about $20,000 that will come out of earnings (equivalent to 2 basis points) </li></ul>
  12. 12. Endowment Performance Through June 2011
  13. 13. ENDOWMENT TRUST LANDS <ul><li>Privately-owned land (17%) </li></ul>State trust land (13%) Tribal Reservations (28%) US Forest Service ( 15%) Bureau of Land Management ( 17%)
  14. 14. ENDOWMENT ASSET ALLOCATION $1,600.04M $1,052.42M $502.79M $1,549.4 million $1,122.1 million $542.2 million $3.29 billion
  15. 15. ENDOWMENT MARKET VALUE UPWARD TREND $3.29 Billion!
  16. 16. ENDOWMENT UNREALIZED GAINS GAINS AT RECORD LEVELS $800 million!
  17. 17. Endowment Distribution
  18. 18. K-12 DISTRIBUTIONS
  19. 19. State Cash Flow
  20. 20. STATE CASH FLOW TOTAL OPERATING ACCOUNT AVERAGE MONTHLY BALANCE BACK IN BLACK $1.3 Billion in June
  21. 21. STATE CASH FLOW As forecasted, ending balance above beginning balance
  22. 22. ARIZONA ECONOMIC UPDATE
  23. 23. AZ NON-FARM EMPLOYMENT
  24. 24. AZ UNEMPLOYMENT AT 9.3%
  25. 25. AZ SALES OF EXISTING HOMES Quarterly Data Jan. 1990 through March 2011
  26. 26. AZ HOUSING PRICES
  27. 27. Special Presentation W. Alexander Roever, CFA AC Managing Director | US Credit Strategy | Short Term Fixed Income J.P. Morgan Securities
  28. 28. QUESTIONS?

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