MEMORANDUM
TO:
MDTA Board
FROM: SUBJECT:
Deputy Director Finance Allen W. Garman Investment Strategy and Benchmarks
DATE:
August 28, 2025
PURPOSE OF MEMORANDUM To complete the required quarterly review of the MDTA’s investment strategy and benchmarks for the period ended June 30, 2025. Investment returns and portfolio composition were discussed in greater detail during the recent Finance and Administration Committee meeting and the Committee Members support the continuation of the investment strategies for all accounts. KEY POINTS No changes in strategy or benchmarks are recommended. Investments conformed to Investment Policy limitations. Portfolio structuring by account adhered to Board approved strategy. o Strategy should remain consistent, despite short-term return volatility associated with the interest rate environment. o Management does not attempt to time market rate changes; Duration Targeted reserves maintain consistent structures. Passive approach to duration, Active in relative-value security selection. Chosen strategies and benchmark indices represent a reasonable and prudent compromise between long-term, multiyear return/income focus and tolerance for return volatility. o The longer duration strategies employed in certain reserves generate higher return volatility with expected higher average annual returns over multiyear periods. INVESTMENT STRATEGY The Trust Agreement and Investment Policy prescribe a Matched Funding investment strategy for specific purpose accounts including Operating, Debt Service, and Capital/Construction.
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