Investment Procedures

Transcription

1 Investment Procedures

2 Policy vs. Procedure Policies: Define Why Procedures: Define How 5

3 Good Procedures Create Effective Systems Internal Controls Investment Purchase Process Investment Committee Reporting Investment Portfolio Strategy 6

4 Investment Committee Composition: Who makes up the committee? What is the term period of each member? Do you need one? 7

5 Investment Committee Responsibilities: Monitor performance and compliance Review holdings Review transactions Review strategy 8

6 Investment Committee Committee Meetings: How often do you meet Calendar specific tasks i.e.: Policy and Procedure review What is the role? Advisory vs. Control 9

7 Internal Controls Purpose: 1) Protect the assets of the organization 2) Ensure the validity of finance records and reporting 3) Promote adherence to policies and procedures 4) Achieve effective and efficient operations 10

8 Controls Preventative Controls Proper Authorization Separation of Duties Adequate Documentation Custody of Securities Detective Controls Reconciliation Analytical Reviews Internal Audit 11

9 Reports Monthly Reports: Compliance Report Performance Report Holdings Report Custodial Bank Reports Quarterly Reports Market Overview Market commentary Strategy Review Economic Outlooks Annual Reports Statistical Review Council or Board Review 12

10 Investment Purchase Proposal Documentation: Maintain support documentation for transaction Include impact on the portfolio relative to diversification, duration and yield Competitive Pricing Document competitive pricing on each security for file 13

11 Investment Purchase Confirmation Documentation Document transaction internally with purchase details Custodial Bank Confirmation Reconcile transaction to bank statement 14

12 Investment Portfolio Strategy Liquidity Portfolio: Identify the amount of liquidity that should be maintained in banks or State Pool Establish a minimum balance Investment Portfolio: Identify the amount of investable funds Identify the weighted average maturity of those funds based on fund purposes Monitor the investment portfolio monthly 15

13 Investment Portfolio Strategy Benchmarks: Establish the correct market (total return) benchmark Determine appropriate yield benchmark Risk: Interest rate risk How much will the market value change given interest rate changes. Credit risk - What is the default risk in the portfolio Reinvestment rate risk Is there too much liquidity or too much callable exposure that leaves the portfolio exposed to rate changes 16

14 Conclusion Productive Procedures will include: Clearly articulated objectives Measurable outcomes System for communication to interested parties Detailed process and timeline for review 17

15 Disclaimer Government Portfolio Advisors, LLC (GPA) presentations have been prepared either from publicly available information or reflects the opinions of the author. Information contained within the investment reports provided by GPA are believed to be reliable but may not have been independently verified. GPA, LLC does not guaranty, represent or warrant, or accept an responsibility or liability as to, the accuracy, completeness or appropriateness of the information contained in these reports. Information contained herein may not be current due to, among other things, changes in the financial markets or economic environment. Opinions reflected in these reports are subject to change without notice. Forecasts represent estimates. Information provided by Government Portfolio Advisors is expressed in good faith, but not guaranteed. Investing carries risk of losses. Information provided by GPA does not constitute, and should not be used as a substitute, tax, legal or investment advice. It is imperative for investors to understand the risks before trading or making investment decisions. The content of this report may not be altered, reproduced or redistributed in whole or in part, without prior written consent of Government Portfolio Advisors.

16 Thank You! Enjoy the rest of the conference! Deanne Woodring, CFA If you have any questions, do not hesitate to ask. Susan Munson, CFP, CFIP Mike Clark