MEMORANDUM
TO:
MDTA Board
FROM: SUBJECT:
Deputy Director Finance Allen W. Garman Investment Strategy and Benchmarks
DATE:
May 29, 2025
PURPOSE OF MEMORANDUM To complete the required quarterly review of the MDTA’s investment strategy and benchmarks for the period ended March 31, 2025. Investment returns and portfolio composition were discussed in greater detail during the recent Finance and Administration Committee meeting and the committee members support a continuation of the investment strategies for all accounts. KEY POINTS • No changes in strategy or benchmarks are recommended. • Investments conformed to Investment Policy limitations for the trailing twelve-month period ended March 31, 2025. • Portfolio structuring by account adhered to Board approved strategy and should remain consistent, despite short-term return volatility associated with the interest rate environment. • Duration Targeted reserves maintain consistent structures and management does not attempt to time market rate changes. • The longer duration strategies employed in certain reserves generate higher return volatility with expected higher average annual returns over multiyear periods. • Chosen strategies and benchmark indices represent a reasonable and prudent compromise between long-term, multiyear return/income focus and tolerance for return volatility. 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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