October 2, 2017                                                                                                                                                        Volume 13 - Number 9
In This Issue
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 CalTRUST Update
CalTRUST Board of Trustees Meets

The Fall Meeting of the CalTRUST Board of Trustees was held in September in Santa Barbara County. Items of business considered at the meeting included updates from each of the business partners, a review of the fiscal-year-end 2016-17 financial position, CalTRUST operations, and the current economic environment. The CalTRUST Board is pleased with the stability and success of CalTRUST as we are over 170 participants strong with assets in excess of $2.7 billion. The Board spent a great deal of time discussing the service provider transitions and are quite pleased that CalTRUST assets remained stable through the transitions. 

Another of the items discussed during the Board meeting was the potential addition of a new ultra-short fund; a GASB 79 compliant, 2A7 look-alike fund with a stable net asset value. In an effort to gauge interest, we would like to ask both active and potential participants to complete this very brief survey

During the meeting, the Board voted to appoint Matt McCue to the CalTRUST Board of Trustees. Matt is the Director of Administrative Services with Mission Springs Water District. Matt has an extensive background in public accounting and has experience in both the public and private sectors. He is also quite active with the California Special Districts Association. Per the CalTRUST Joint Exercise of Powers Agreement (JPA), new Trustees must be ratified by the JPA members. CalTRUST will send JPA members a survey for his ratification later this week.  

We also acknowledge the delay in participants receiving their August statements due to the fund accounting transition. Moving forward, statements will be available by 3pm PST the first business day after the month-end. Your September statements are now available in the CalTRUST online portal.  

For more information on the CalTRUST funds, please contact:
Laura Labanieh
(916) 650-8186; laura@caltrust.org
Kyle Tanaka
Member Services Associate
(916) 650-8114; kyle@caltrust.org

Financial Markets Update
Getting to Inflation's Core

Getting a handle on the inflation outlook is one of the most important calls for investors right now. Global growth is holding at stable, above-trend levels. Yet inflation remains surprisingly subdued, spurring debate that the historical link between economic slack and inflation - the Phillips curve -may be dead. To get a heads-up on how the inflation outlook is evolving, we introduce our BlackRock" inflation GPS. The Inflation GPS, which incorporates big data on price trends and a daily-updated "nowcast" of inflation-related statistics, aims to give a read on here core inflation is headed in major economies. Highlights include:
  • The BlackRock Inflation GPS shows the slowdown in US core inflation is likely short-lived and is consistent with monthly data back near a 2% annual rate by early 2018. The eurozone GPS points to core inflation moving sideways.
  • The Phillips curve is alive and well, we believe. The US jobs recovery means slack is no longer weighing on inflation. By contrast, Europe's recovery has curbed the inflation drag but sizable slack lingers. This suggests a further pickĀ­ up in inflation will require ongoing monetary policy help.
  • The story goes beyond slack. Globalisation and technology both play a role. Importantly, we find that US inflation expectations matter a lot and have dragged down core inflation for now.
  • The contrasting inflation pictures for the US and eurozone imply that market participants may be underestimating potential monetary policy divergence." 

Read their entire Global Macro Outlook newsletter here.

Performance (as of August 31, 2017)
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.
2017 Calendar  
October 9,  2017
Columbus Day Observed
Bond Market Closed for Trading

November 23, 2017
Thanksgiving Day Observed
Closed for Trading

November 24, 2017
Thanksgiving Day Observed
Early Closure - 10:00 am PST

December 22, 2017
Christmas  Observed
Bond Market Early Closure - 11:00 am PST
December 25, 2017
Christmas Observed
Closed for Trading

December 29, 2017
New Year's Eve Observed
Bond Market Early Closure - 11:00 am PST

2018 Calendar  
January 1, 2018
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.