Item - 2020.EX15.10

The Executive Committee recommends that:  

1.  City Council receive the report (July 7, 2020) from the Chief Financial Officer and Treasurer for information.

The purpose of this report is to provide the following information:

1.  Performance of the Funds for 2019, and the first quarter of 2020; and

2.  General Market Update and Benchmark Performance.

The City's General Group of Funds (General Fund) that holds the City's working capital and the amounts designated for the City's reserves and reserve funds earned:

$267.3 million in 2019 (4.3 percent rate of return)
$41.5 million in the first quarter of 2020 (3.2 percent annualized rate of return)
 

The City's Sinking Fund portfolio that holds funds for future debt repayments earned:

$83.1 million in 2019 (4.9 percent rate of return)
$8.6 million in the first quarter of 2020 (2.3 percent annualized rate of return)
 

Since January 1, 2018, the City's long-term investments have been managed by the Toronto Investment Board under a new Council adopted Investment Policy which is based on the prudent investor standard.

As at December 31, 2019, approximately 77 percent of both the Sinking Fund and the Long Term Fund were managed by external investment managers selected by the Toronto Investment Board.  Four external fixed income managers control approximately 70 percent of the assets while two global equity pooled fund managers oversee 7 percent of these funds.  A third global equity pooled fund manager started in February 2020 resulting in a total equity exposure of 10 percent at the fund level. The balance of these funds remain in cash and short-term securities until additional external fund managers can be funded.  Selection and contract negotiations for an additional global equity pooled fund manager and real asset managers continues in 2020.

All funds managed are compliant with the Council-approved Investment Policy.