City hall viewed from River Road in this file photo. The city's investment portfolio saw a return in 2020, despite pandemic effects, but still came in below the market benchmark for the third straight year.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
The city’s major investment portfolio grew by 6.21 per cent in 2020, joining general financial markets that rebounded from a steep dive last March when the pandemic set in, though local funds were outperformed by the market benchmarks.
The City of Medicine Hat’s year-end financial report states the value of investments with AIMCo. was $209.8 million as of Dec. 31, 2020.
That’s $26.6 million more than has been deposited with the Alberta Government’s financial management agency over the last four years.
The return for 2020 exceeds the city’s stated goal for the funds to return four per cent above general inflation (CPI for the year was 1.62 per cent), but comparable funds the city uses to benchmark performance returned 11.56 per cent as the stock market reached record highs late in the year.
It marks the third straight year city returns have lagged behind the benchmark return set by AIMCo. for assets that include the city’s longer term funds, such as the well-abandonment and Heritage Savings Reserve.
In 2020, the value dipped below original investment for a brief time last March, and all major stock indices dropped by as much as one-third.
Macroeconomic response to the pandemic also hampered the city’s more conservative investment portfolio, but the specific returns beat expectations for the class.
Internally managed funds totalling $222.3 million for short-term funds in cash, term deposits, GICs and bonds returned 1.85 per cent in 2020, above a benchmark of 1.04 per cent.
A new external medium-term fixed income bond fund managed by Manulife Financial returned 0.63 per cent since it was created with $50.4 million deposit last summer. That was worth $51.6 million at year-end. The comparative benchmark in the class was 0.44 per cent.
