LITTLE ROCK, Ark. (KNWA/KFTA) — According to a press release, the Arkansas State Treasury earned $13.18 million during the first quarter of fiscal year 2022, which ran from July 1 through September 30.
The gains were nearly double what they were during the same quarter in fiscal year 2021, while interest rates and 10-year Treasury rates remained stagnant.
“We’ve been able to produce small, steady gains over the course of the last fiscal year,” Treasurer of State Dennis Milligan told the State Board of Finance.
The Board, made up of elected and appointed members of the banking and finance industry, is chaired by the governor.
“My team’s diligent work in analyzing the fixed-income market daily, making strategic calls to better the portfolio, contributed significantly to our total returns in the first quarter,” said Milligan.
According to their release, the State Treasury operates solely in the fixed-income, or bond, market. The 10-year Treasury yield curve is the main indicator for how that market will perform financially.
The state’s long-term portfolio, which is made up mostly of mortgage-backed securities, agency bonds and collateralized mortgage obligations earned $12.5 million dollars during the first quarter of fiscal year 2022, compared to $5.75 million for the same quarter a year ago.
“We’ve continued to see slight improvements each quarter. That is due to our persistence in finding small yet significant pockets in the market that make sense for us to invest in, while still maintaining a conservative investment structure,” Milligan told the Board.
The state’s short-term portfolio, made up of commercial paper, demand, and money market accounts earned $615,000 for the first quarter of fiscal year 2022, compared to about $1 million during the same quarter a year ago.
“This portion of our portfolio continues to be affected by low interest rates, which has made it a struggle to produce strong yields,” Milligan said.
To view a video summary of the first quarter investment report for fiscal year 2022, click here.