March 2016                                                                                                                                                          Volume 12 - Number 3

Monthly Market Update

In This Issue
(click on logo to link to website)







President's Perspective

CalTRUST Updates



CalTRUST representatives will be holding our annual due diligence visit with our fund accountant, Nottingham, at the beginning of April.  During this meeting we will be discussing ways to streamline the participant experience.  If you have any items you would like to see address or suggestions for ways to enhance your participant experience please contact Laura Labanieh at 916.650.8186 or


The CalTRUST Board of Trustees will hold their Annual Meeting in Riverside County on April 27, 2016.  If you have any items you would like the Board to consider or if you would like to attend the meeting please contact Laura Labanieh at 916.650.8186 or


CalTRUST extends a warm welcome to our newest participants: the cities of Gardena, Martinez, Arvin, Fowler, Bellflower and Jackson; Costa Mesa Sanitary District, Herlong PUD, Riverside Transit Agency, Mammoth Community Water District, Kern Delta Water District, and CalViva Health.



Liquidity, Diversification & Convenience of CalTRUST Funds Makes Them A Great Option For Property Tax Proceeds


The CalTRUST funds give local agencies a safe and convenient means of maintaining liquidity while also diversifying their investments. The CalTRUST Government Money Market Fund (MMF) and CalTRUST Heritage MMF, each rated "AAAm" and "Aaa" by S&P and Moody's, respectively, provide same-day liquidity, while the CalTRUST Short-Term Fund, rated "Aaf/S1+" by S&P, provides next-day liquidity. The CalTRUST Medium-Term Fund gives investors monthly liquidity. 


Taken together, the CalTRUST funds give participants a highly-efficient means of allocating funds across the 0-5 year maturity range; and a cost-free means of reallocating among those options as local circumstances change. 


Given this, CalTRUST is an ideal option for local agencies when it comes to the investment of property tax proceeds. To take maximum advantages of the benefits of CalTRUST, local agencies should ensure their investment policies authorize the use of CalTRUST. We would be happy to assist any interested agency; just contact one of the contacts listed below.

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
and Solano County Treasurer
Financial Markets Update
Full Employment Signals Likely Changes In Character of US Financial Markets


In his latest Economic & Market Perspective, WellsCap Chief Investment Strategist Jim Paulsen, looks at the looming changes in the character of the US financial markets arising from full employment. 

As Jim notes, "until now, the premise of this bull market has been the ability to grow without igniting inflation or interest rate pressures." At full employment, however, if the recovery continues, as he expects it will, it likely will "aggravate cost-push pressures, lift both wage and core consumer price inflation, and require higher interest rates." Indeed, many measures of inflation and wages have accelerated in the last year, with core CPI rising from 1.6% to 2.2%; core PCE moving from 1.2% to 1.7%; and the 3-month average of wage inflation moving up from 1.8% to 2.5%. 

The already visible acceleration in core inflation, combined with the recent bounce in commodity prices, should lay to rest deflation fears and open the door to a period of -- mildly -- rising inflation. These conditions, paired with a likely peak in the value of the US dollar, which he anticipates, leads Jim to conclude that inflation expectations are likely to awaken, which in turn are likely to force the Fed to actually quicken its pace of interest rate hikes. 

Jim concludes that the best of this bull market is most likely behind us, and that bond investors may finally face the first sustained rise in yields in many years.  

The complete Economic & Market Perspective can be accessed here. 
CalTRUST Portfolio Snapshot (as of February 29, 2016)
1. CalTRUST Short-Term and Medium-Term and LAIF yields are net of fees.  Merrill 1-5 Year Indexes are unmanaged; and do not reflect any deduction for administrative fees or expenses.
2. CalTRUST and LAIF returns are net of all investment advisor, administrative and program fees.
3. Annualized.
4. The CalTRUST Short-Term and Medium-Term portfolios commenced operations on February 13, 2005.
CalTRUST Heritage Money Market Fund


Treasury Yield Curve 


2016 Calendar

March 24

Good Friday Observed

Early Closure - 10:00 am PST


March 25

Good Friday

Closed for Trading

May 27

Memorial Day Observed

Early Closure - 10:00 am PST


May 30

Memorial Day

Closed for Trading


July 1 

Independence Day Observed

Early Closure - 10:00 am PST


July 4

Independence Day Observed

Closed for Trading


September 5

Labor Day

Closed for Trading


October 10

Columbus Day

Closed for Trading


November 11

Veterans Day

Closed for Trading


November 24


Closed for Trading


November 25

Thanksgiving Holiday

Early Closure - 10:00 am PST


December 23 Observed

Christmas Eve

Early Closure - 10:00 am PST


December 26

Christmas Observed

Closed for Trading


December 30

New Year's Eve Observed

Early Closure - 10:00 am PST


January 2, 2016

New Year's Day Observed

Closed for Trading


The CalTRUST Monthly Market Update  is prepared monthly by the Investment Trust of California (CalTRUST) for participants in the CalTRUST Joint Powers Authority pooled investment program.  The Newsletter is prepared solely for informational purposes and is not to be construed as the solicitation of an offer to sell or of an offer to buy any security, nor is it intended to constitute a recommendation for the purchase or sale of any security.  The information contained herein is based upon data obtained from sources believed to be reliable, but is not guaranteed by us as being accurate and does not purport to be a complete summary of the available data.  Additional data will be provided upon request. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance.  Information, opinions and estimates contained in the Monthly Market Update reflect a judgment at its preparation date by CalTRUST and are subject to change without notice.  The price, value of, and income from any securities or financial instruments issued by the entities mentioned in this Monthly Market Update may fall as well as rise.