Meeting documents
Cabinet
Wednesday, 8th February, 2006
APPENDIX 2
ANNUAL INVESTMENT STRATEGY
6.1 Investment Policy
The Council will have regard to the ODPM's Guidance on Local Government Investments issued in March 2004 and CIPFA's Treasury Management in Public Services Code of Practice. The Council's investment priorities are:-
a) the security of capital and
b) the liquidity of its investments.
The Council will also aim to achieve the optimum return on its investments commensurate with proper levels of security and liquidity.
The borrowing of monies purely to invest or on-lend and make a return is unlawful and this Council will not engage in such activity.
Investment instruments identified for use in the financial year are listed below under the `Specified' and `Non-Specified' Investments categories. Counterparty limits will be as set through the Council's Treasury Management Practices - Schedules.
Specified Investments
(All such investments will be sterling denominated, with maturities up to maximum of 1 year, meeting the minimum `high' rating criteria where applicable)
|
Minimum `High' Credit Criteria |
|
|
Debt Management Agency Deposit Facility |
-- |
|
Term deposits - UK government |
-- |
|
Term deposits - other local authorities |
-- |
|
Term deposits - banks & building societies |
Short-term F1, Long-term AA-, Individual B, Support 3 |
|
Money Market Funds |
AAA |
Non-Specified Investments
A maximum of 30% will be held in aggregate in non-specified investments
|
Minimum Credit Criteria |
Max % of total investments |
Max maturity period |
|
|
Term deposits - UK government (with maturities in excess of 1 year) |
-- |
20% |
2 years |
|
Term deposits - other local authorities (with maturities in excess of 1 year) |
-- |
20% |
2 years |
|
Term deposits - banks & building societies (with maturities in excess of 1 year) |
Short-term F1+, Long-term AA+, Individual B, Support 2 |
10% |
2 years |
This authority determines which institutions to invest with, according to the credit ratings afforded them by the following credit rating agencies:
Fitch
Moody's Investors Service
Credit ratings are continually monitored throughout the financial year. If a downgrade results in the counterparty no longer meeting the Council's minimum criteria, its further use will be withdrawn immediately.
6.2 Investment Strategy
This authority maintains mainly temporary, short term investments and investments will be made accordingly, with reference to the core balance and cash flow requirements.
New long-term investments are not being envisaged (although this will be kept under constant review). A minimum of 60% of the authority's overall investments, will however be held in short term investments should any long-term investment be undertaken.