State Board reports positive quarter, discloses $47 million in Israel bonds and raises book-return target

The State Board of Finance on an unspecified date heard a quarterly investment report that showed strong income and approved a modest change to the board’s short-term return target.

Board presenters said the treasury recorded more than $86,000,000 in income for the quarter and that the money market trust fund produced a 5.37% return for participating state and local government agencies. In roundtable remarks before a slide presentation, one presenter confirmed the portfolio includes Israeli sovereign debt: “Are they in our portfolio? The answer is yes, they are,” and said the treasury currently holds about $47,000,000 in Israel bonds.

Why it matters: The board’s investment decisions determine how state cash is managed and how much income is available for public programs. Officials told the board they have used rising market interest rates to reinvest and capture higher coupon income while trying to preserve liquidity and capital.

Steven Gilmore led a slide review showing book yields and quarterly results. He reported a quarter net income figure described in the presentation as $90,500,000 (coupon income $79,500,000, less realized capital losses and plus net accretion of $11,600,000). The presentation noted the book return annualized to 3.279% for the most recent quarter, while the three‑month total return was negative 1.432% (the presenter said that figure was not annualized).

After discussion of market drivers — including a roughly 90 basis point rise in 10‑year Treasury yields over about 10 weeks and elevated inflation readings that have kept the Federal Reserve’s path uncertain — the investment team proposed raising the target range for book return for the October–December quarter from 3.20%–3.30% to 3.25%–3.35%. The board moved, seconded and approved the change by voice vote; the transcript records ayes but does not include a roll‑call tally.

The board then moved to approve the treasury report; that motion also passed by voice vote.

What’s next: The transcript does not include a meeting date or a roll‑call vote tally. Board members commended the treasurer and staff for expanding potential investments consistent with the office’s policy.