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OF f✓•� <br />CW v <br />cntura <br />•_�rOr._. <br />June 12, 2001 <br />HAROLD S. Ri T T hRAN <br />Law, encEri c <br />Rr atfi8€v <br />Assistant TreasurerTaxCoii�czw <br />G. Pauf Biolley <br />Assistant Public Aominist-ator <br />Board of Supervisors <br />County of Ventura <br />800 South Victoria Avenue <br />Ventura, CA 93009 <br />SUBJECT: REPORT OF INVESTMENTS FOR THE MONTH OF MAY <br />RECOMMENDATION: Discuss and File <br />FISCAUMANDATES IMPACT: None <br />SUMMARY: Attached is a listing of market values for all investments for the month ending <br />May 31, 2001. <br />DISCUSSION: <br />The average daily portfolio balance for the month of May amounted to $1.2 billion. The <br />portfolio yield for May was 5.45%. The weighted average days to maturity increased 5 days to <br />190 days. The total net monthly earnings were $5.5 million. The portfolio has been structured <br />to satisfy the anticipated cash flow needs of the participants. The investment practices and <br />portfolio holdings are in compliance with our investment policy. <br />The Federal Reserve lowered short-term interest rates by half of a percentage point for the fifth <br />time in as many months. On May 15, 2001, the Federal Open Market Committee (FOMC) voted <br />to lower the Federal Funds rate, the rate that banks lend short-term funds to each other, to 4.0% <br />and lowered the discount rate, the rate that banks can borrow directly from the Fed, to 3.5%. <br />The Fed provided the following rationale to explain this rate action: <br />A significant reduction in excess inventories seems well advanced. Consumption <br />and housing expenditures have held up reasonably well, though activity in these <br />areas has flattened recently. Investment in capital equipment, however, has <br />continued to decline. The erosion in current and prospective profitability, in <br />combination with considerable uncertainty about the business outlook, seems <br />likely to hold down capital spending going forward. This potential restraint, <br />together with the possible effects of earlier reductions in equity wealth on <br />800 South Victoria Avenue, Ventura, CA 93009-1290 <br />