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CalTRUST Offers a Safe and Convenient Diversification Tool for Local Agency Portfolios

June 18, 2012

In real estate investment, the three most important factors are "location, location, location." Similarly, the most important aspect of local agency investment can be summarized as "diversification, diversification, diversification."


Essentially, no matter how safe an individual investment appears, or how well it has performed in the past, prudence dictates that you not put all your eggs in one basket.

CalTRUST provides a convenient means for local agencies to diversify their investment portfolios. The CalTRUST Heritage Money Market Fund, rated "AAA" and "Aaa" by Standard & Poor’s (S&P) and Moody's Investors Service (Moody’s), respectively, offers same-day liquidity until 1 p.m. The CalTRUST Short-Term Fund, rated "AA/S1+" by S&P offers next-day liquidity until 1 p.m. and has produced returns slightly in excess of Local Agency Investment Fund (LAIF) on a net basis since its inception almost seven and a half  years ago. Finally, for funds that are not part of your daily cash flow considerations –  that is for funds not likely to be called upon over the next two – three years – the CalTRUST Medium-Term Fund can provide an incremental increase in dividend income, while providing monthly liquidity.

Taken together, CalTRUST funds offer cities, successor agencies and other local agencies a convenient, cost-efficient means of earning highly competitive returns while increasing the diversification of their portfolios. CalTRUST is a joint powers authority for the investment of local agency funds co-sponsored by the League of California Cities. CalTRUST currently has assets in excess of $1 Billion and more than 130 participant accounts.

For more information about CalTRUST, please visit its website or contact Lyle Defenbaugh, Wells Capital Management at (916) 440-4890 or Dan Harrison, League of California Cities, at (916) 658-8267.

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