Given that it has $6.1 billion in that portfolio, it’s a return of 2.06 per cent after management fees were paid.
That amount raised some questions for members of the city’s audit committee on Thursday.
North American stock markets had an up year in 2021, topping 20 per cent gains in some cases.
Inflation in Canada has topped six per cent, so city officials attending the meeting were asked by committee members if the city is losing ground.
The chair of the audit committee, Coun. Richard Pootmans, said a two per cent return doesn’t seem impressive.
“Could we do better? Yes, with a bit more risk, we probably could do better,” said Pootmans.
“So that’s a function that the audit committee will probably take a closer look at in the coming months and make a recommendation to council whether or not those policies have to be changed.”
This chart from the City of Calgary’s 2021 annual investment report shows how the city allocated its investments last year. (Photo by City of Calgary)
The city’s portfolio is made up of a cross section of assets which is designed to limit risk. They include short-term liquid funds, short and long-term fixed income funds, equities and real assets.
Its investment objectives are both short and longer term.
Pootmans said he’s confident that the city’s investment objectives don’t need a major overhaul.
“Can there be tweaking? There will always be fine tuning. But the fact of the matter is, we have a professionally run fund, managed by excellent administrators on the city side. We’re optimistic that we’ve pretty much got it right.”
The city’s target for investment income in 2021 was $104.7 million. So even with a two per cent return, it exceeded that target.
On a three year annualized basis, the city’s portfolio posted returns of five per cent, which the annual investment report notes managed to beat the benchmark return of 4.5 per cent.
Another member of the audit committee, Coun. Terry Wong, said the city’s return isn’t out of line with the benchmarks that fund managers try to meet or beat.
He said the city must be somewhat cautious because this is public money.
“By protecting the public purse, we’re not looking for the high rate of returns. We’re looking for a good return, but one that also manages the risk to our assets as well,” said Wong.
Investment related expenses for the city’s portfolio were $17 million last year.
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.
