Last year was a tough one for anyone invested in the markets, and the City of Calgary also felt the pain with its investments.
Council’s audit committee heard the 2022 annual report on the City’s investment portfolio, which was worth $6.2 billion at the end of last year.
The portfolio did see an overall increase of $180 million dollars through 2022, but those gains were realized through government grants and revenues, according to audit committee chair Coun. Richard Pootmans.
“A lot of our revenue now is from sales of services and things like that,” said Pootmans, explaining where the portfolio saw its increase.
However, the portfolio’s total market investments went down by 6.14 per cent after fees.
“That’s happened to a number of funds,” said Pootmans. ”And what we do is we benchmark against other standards. No one’s particularly happy about it, but given the turmoil in the world, it is what it is.”
Against its benchmarks, the city was still up 32 basis points.
Portfolio equals only a year of operating funds in the context of operating, capital budgets
Rod Babineau, senior leader of investments at the City of Calgary, explained to council that the invasion of Ukraine in February 2022 caused turbulence in the markets.
“Then, with the rampant inflation that we saw in 2022, the central banks — both the Bank of Canada and the Federal Reserve — aggressively raised interest rates, which had an effect on our fixed-income portfolio,” said Babineau.
He said it amounted to a double whammy in which both fixed-income investments and equity investments took hits, when one class of investments often offsets the other.
Pootmans said while the portfolio is, in absolute terms, a significant sum of money, it equals only a year of operating funds in the context of the city’s operating and capital budgets.
He said there is no prevention pill to avoid losses such as this in some years.
“The fund is professionally and actively managed on a daily basis by a professional team at the city and advised by the best investment advisors in the country,” he said. “We’re always trying to achieve the maximum possible return. But of course, there’s risk involved and so there’s risk mitigation exercises as well.”
As part of that risk mitigation, the audit committee will be looking at the number of professionals outside the city which will be looking at the city’s investments. Pootmans said it’s not a reactive decision to these losses, adding they’re happy with the governance as it stands.
“I think there’s three or four outside professionals that serve on the advisory committee,” he said. “We’re looking at whether or not we have to augment our governance supervision or not. So that’s an active discussion that we’re debating and bringing to council in the near future.”
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
