Investment Policy: A Public Fund’s Rule Book

Investment Policy: A Public Fund's Rule Book

CSMFO 2018 Conference

February 22, 2018

CHANDLER ASSET MANAGEMENT | 800.317.4747 | | info@

Section 1 | Investment Policy

Why an Investment Policy?

"A written investment policy is the single most important element in a public funds investment program."

From GFOA's Best Practice on "Creating an Investment Policy"

Why?

? It improves the quality of decisions. ? It demonstrates a commitment to the fiduciary care of public funds, with emphasis on

balancing safety of principal and liquidity with yield. ? It signals to rating agencies, the capital markets, and the public that a government entity

is well managed and is earning interest income suitable to its situation and economic environment.

Source: GFOA

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Key Benefits of an Investment Policy

Defines the investment program

? Legal and permitted activities and investments ? Who's in charge ? Measurement of results ? Relationship to counterparties

Provides protection for the agency

Addresses the dynamic nature of the investment process

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Essential: Define Duties--Fiduciary, or Otherwise

Finance officers have a fiduciary duty to perform: ? Primary goals - safety, liquidity, yield ? Secondary goals

o Revenue goals o Establishing an investment strategy o Project-specific goals o Overall financial health of Agency

These are all important--it isn't enough to simply park the funds and hope for the best outcome!

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