Exhibit A investment strategy statement
It is the policy of the Corporation that, giving due regard to the safety and risk of investments, all available funds shall be invested in certificates of deposit in conformance with Section 2256.010 of Chapter 2256, Texas Government Code, as amended (the "Act").
In accordance with the Act, the following prioritized objectives in order of importance) in accordance with Section 2256.005(d) of the Act apply for each of the Corporation's investment strategies.
- A. Suitability - Understanding the suitability of the investment to the financial requirements of the Corporation is important.
- B. Safety - Preservation and safety of principal are the primary objectives of the Investment Policy. All investments will be in high quality certificates of deposit, provided, however, that small balances may be invested in other qualified short-term investments.
- C. Liquidity - The Corporation's investment portfolio will remain sufficiently liquid to meet operating requirements that might be reasonably anticipated. Liquidity shall be achieved by matching certificate of deposit maturities with forecasted cash flow requirements.
- D. Marketability - It is understood by the Board of Directors that certificates of deposit are not securities that can be sold and that in order to liquidate a certificate of deposit prior to maturity the Corporation may pay a penalty.
- E. Diversification - Certificate of deposit maturities shall be staggered throughout the budget cycle to provide cash flow based on the anticipated needs of the Corporation.
- F. Yield – Attaining a competitive yield, commensurate with the Corporation's investment risk constraints and the cash flow characteristics of the portfolio, is the desired objective. The goal of the Corporation's investment portfolio is to regularly meet or exceed the average rate of return on TexPool investments.
The first measure of success in this area will be the attainment of enough income to offset inflationary increases. Although steps will be taken to obtain this goal, the Corporation's staff will follow the “Prudent Person” statement relating to the standard of care that must be exercised when investing public funds as expressed in the Section 2256.006(a-b) of the Act. The Investment Officers shall avoid any transactions that might impair public confidence in the Corporation's ability to govern effectively. The prudence of the investment decision shall be measured in accordance with the tests set forth in Section 2256.006(b) of the Act.