CalTRUST Funds Enter 2016 With $2.3 Billion in Assets; Portfolios Well-Positioned For A Challenging Rate Environment
The CalTRUST funds enter 2016 on a high note, with assets of $2.3 billion. Moreover, with the launch of the CalTRUST Government Money Market Fund in the Fall of 2015, CalTRUST gives local agency investors even greater ability to allocate their funds across the 0-5 year maturity range permitted under the California Government Code; and maximum flexibility in the management of local funds.
Rates at the front-end of the yield curve trended higher throughout the latter part of 2015, in anticipation of the Federal Reserve's first rate hike since before the financial crisis, which the Fed instituted in mid-December. Emblematic of this trend, the two-year treasury increased from 0.69% to 1.06% from July 1, 2015, to December 31, 2015. On the other hand, rates at the longer end of the curve have been wrestling with conflicting signals:
- A strengthening US economy, putting upward pressure on rates; and
- Stagnating growth in China, along with deflation fears stoked by the continued decline in energy prices and other commodities, prompting a flight to quality and downward pressure on rates.
The CalTRUST Short- and Medium-Term Funds are positioned to adapt to a changing, and potentially volatile, rate environment, the duration of the funds is at the shorter end of their targets, at 0.48 years for the Short-Term Fund and 1.66 years for the Medium-Term Fund.
For more information on the CalTRUST funds, please contact me by email at the address listed below, or contact:
Lyle Defenbaugh, Wells Fargo Asset Management 916-440-4890
Laura Labanieh, CSAC Finance Corporation 916-650-8186
Norman Coppinger, League of CA Cities 916-658-8277
Neil McCormick, CA Special Districts Association 916-442-7887
Chuck Lomeli is CalTRUST President,
Chairman of the Board of Trustees
and Solano County Treasurer