Treasurer reports record $9 billion earnings driven by high interest rates and strategic investments
May 23, 2024 | Arkansas State Treasurer's Office, Arkansas
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The Arkansas Board of Finance convened on May 22, 2024, to discuss significant financial updates and investment strategies for the state treasury. The meeting highlighted record earnings over the past three quarters, with the first quarter of 2024 yielding approximately $50.9 million, the second quarter $95.5 million, and the most recent quarter $94.2 million. This impressive performance is attributed to higher national interest rates and increased investment amounts managed by the treasury.
Treasurer Frederick Walter emphasized the successful management of the treasury's investments, noting that the Money Management Trust Fund achieved a return of 5.52% in the last quarter. He acknowledged the efforts of his team and compared their performance favorably to previous administrations, indicating a robust financial strategy in place.
Investment Accounting Director Steven Kilgore presented a detailed treasury report, revealing that short-term revenue accounted for $29.8 million, primarily from bank and money market accounts, while long-term investments, particularly mortgage-backed securities, contributed significantly to the overall revenue. The total investment income for the last three months reached approximately $62 million.
Kilgore also discussed the allocation of investments across various categories, including U.S. Treasury bonds, federal agency bonds, and corporate bonds. The board noted a book return on investment ratio of 3.36% annualized for the current fiscal year, an increase from the previous year's 2.69%.
Senior Investment Manager Steve Foley reported on the ongoing volatility in the bond markets, stating that the portfolio size remains just under $11.3 billion, with a focus on maintaining operational liquidity above 10%. Foley highlighted a year-over-year increase in return on investment by 12%, with a 29% rise in income, reflecting effective management strategies.
The meeting concluded with a positive outlook on the treasury's performance, as the Federal Reserve's higher interest rate policies are expected to continue benefiting the state's investment portfolio. The board remains committed to maintaining a consistent and sustainable investment strategy moving forward.
Treasurer Frederick Walter emphasized the successful management of the treasury's investments, noting that the Money Management Trust Fund achieved a return of 5.52% in the last quarter. He acknowledged the efforts of his team and compared their performance favorably to previous administrations, indicating a robust financial strategy in place.
Investment Accounting Director Steven Kilgore presented a detailed treasury report, revealing that short-term revenue accounted for $29.8 million, primarily from bank and money market accounts, while long-term investments, particularly mortgage-backed securities, contributed significantly to the overall revenue. The total investment income for the last three months reached approximately $62 million.
Kilgore also discussed the allocation of investments across various categories, including U.S. Treasury bonds, federal agency bonds, and corporate bonds. The board noted a book return on investment ratio of 3.36% annualized for the current fiscal year, an increase from the previous year's 2.69%.
Senior Investment Manager Steve Foley reported on the ongoing volatility in the bond markets, stating that the portfolio size remains just under $11.3 billion, with a focus on maintaining operational liquidity above 10%. Foley highlighted a year-over-year increase in return on investment by 12%, with a 29% rise in income, reflecting effective management strategies.
The meeting concluded with a positive outlook on the treasury's performance, as the Federal Reserve's higher interest rate policies are expected to continue benefiting the state's investment portfolio. The board remains committed to maintaining a consistent and sustainable investment strategy moving forward.
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