Council investment 'above benchmark'

Gosford Council has received its investment report for August at its Ordinary Meeting of Tuesday, October 15.

With the cash rate forecast to stay at 2.50 per cent for the next 12 months, term deposit rates above four per cent per annum are becoming increasingly rare.

Therefore, as council's existing term deposits mature, reinvestment will likely be in lower yielding options.

However, it is expected that council can continue to achieve above benchmark returns with prudent investment selection from its short and long term holdings.

As at August 31, council's investment portfolio had a current market valuation of $106,219,955 or the hold to maturity value (face value) of $113,003,968.

When compared to the previous month, of the eight structured securities held, 75 per cent showed an increase in their market value.

The net market value increase for the period was $118,644.

Council's investment portfolio return outperformed the bank bill index benchmark during the month, 4.63 per cent per annum versus 2.76 per cent per annum.

Council's portfolio is expected to return above benchmark returns if there are no further credit events within its CDO portfolio, as the CDO portfolio is currently valued at low levels.

Without marked-to-market influences, council's investment portfolio yielded 4.25 per cent per annum during the month.

Gosford Council Agenda COR.86, 15 Oct 2013