1. Common Mistakes in Managing your Investment Portfolio
MONDAY ■ MAY,
2:40-3:55PM
Common Mistakes in Managing your Investment Portfolio
MODERATOR
Damien Grant
Vice President, Multi-Bank Securities
Scott McIntyre, CFA
SPEAKERS
Managing Director/Senior Portfolio Manager,
FirstSouthwest Asset Management
Chris Daniel
Chief Investment Officer, City of Albuquerque, NM
#GFOA2017

2. Introductions Conference Session Overview Topic Overview Speakers
Chris Daniel, CFA, Chief Investment Officer, City of Albuquerque
Scott McIntyre, CFA, Senior Portfolio Manager, FirstSouthwest Asset Management

3. Appropriateness of Policies & Procedures
Need for Dynamic Investment Policy
Don’t Regurgitate Statutes & Ordinances
Review and Update at Least Annually
Make Sure Staff and Others Are Aware of Procedures Developed to Implement Policies
Components
Follow an Institutional IPS Format (I.E., Purpose, Responsibilities, Objectives & Constraints
Clear Statement Of Authorized Investments
Reporting Parameters
Custody & B/D Conditions
Diversification Requirements
Hiring Advisors and Broker/Dealers
Must Balance Safety, Liquidity, and Return

4. GFOA Best Practices Development of an Investment Policy
Investment Program for Public Funds

5. Banking & Cash Management
Take Time To Sit Down Periodically (At Least Annually) With Fiscal Agent For a Line-by-line Review. Must Also Compare Analysis To RFP Cost Proposal.
Understand Various Fee Structures
Know for various components including safekeeping/custody; trust; and management
Understand value of earnings credit
Review Daily Cash Positioning and Balance Minimization

6. Selection of Brokers & Advisors
FINRA Broker Check Now Free Online
Importance of Broker Due Diligence AND Maintaining Arm’s Length Relationship
Go To Broker With Idea of What You Want/Your Needs
Advisors Are Essential To Optimizing Your Cash and Investments. Know Their Background re: Portfolio Optimization and Asset Allocation for Governments
Always Solicit (RFP) For Advisors and Have Robust Selection Criteria And Process (including interviews)

7. GFOA Best Practices Selection and Review of Investment Advisors
Due Diligence on Bank and Treasury Management Providers
Government Relationships with Securities Dealers
Investment Program for Public Funds

8. Strategies Ground Program On Government’s Risk Tolerance
Develop Clear Return Objective and Risk Tolerance Objective Have Clear Documentation Of Constraints (liquidity, time horizon, regulatory, taxes, unique circumstances)
Determine Whether To Commingle Cash For Optimal Investment
Bifurcate Into Liquidity And Core Investment Components and Understand Different Strategies for Both

9. GFOA Best Practices Managing Risk in Investment Portfolios
Diversifying the Investment Portfolio
Using Benchmarks to Assess Portfolio Risk and Return

10. Documentation & Reporting
Compliance report (with sector and issuer limits, diversification requirements, maturity/duration restrictions, other
Performance appraisal vs. benchmark
Attribution analysis what caused the under/out-performance