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<br />. Maturities should be varied, with not more than 20% of the <br />portfolio invested out 5 years (ma~imum term). As information, <br />the January 1992 prof i Ie shows an even closer ma tc h to <br />objectives, and reflects investments made shortly after year end <br />as a result of ta~ revenues being available then. <br /> <br />Description of Portfolio (as of 12/31/91)- <br />Securities: <br /> <br />61% CD's, 6% Zero Coupon Bonds, 11% Gov't Mutual Funds, <br />22% cash or equivalents. <br /> <br />Maturities: <br /> <br />49% ma tures wi thin 1 year (a I though the US Gov' t Mutua I <br />Fund invests in maturities in the range of 3 - 5 years), <br />74% matures within 2 years, 79% matures within 3 years, <br />87% matures within 4 years and 100% matures within 5 <br />years. <br /> <br /> <br /> <br />Risk characteristics: <br /> <br />. The risk to principal is virtually nil as all investments <br />are either insured by, or are in obligations of, the US <br />governmen t. The zero coupon instrumen ts and the Ins ti tu tiona I <br />Government Fund are subject to market risk, as in fact are the <br />CD's if we were required to liquidate them on short notice. Our <br />ph i losophy l.S to invest for the dura tion of a ma tur i ty and our <br />internal reports accordingly reflect original'.,costs. In the <br />future, we will present the difference between cost and market <br />for information only. <br /> <br />Other fea tures : <br /> <br />The concept of "ladder ing" the ma tur i ties is a common 1 y <br />used technique to ensure that the overall return will tend to <br />more nearly appro~imate intermediate term interest rates, as <br />investments are made at intermediate term rates with varying <br />maturities. This also allows for consistent stream of maturities <br />and the opportunity for investing smaller, more frequently <br />available amounts than if large amounts were invested in "lumps". <br />This is a source of liquid funds that can either be reinvested or <br />used currently if appropriate. <br /> <br />The report shall explain the total investment return and <br />compare the return with budqetarv expectations- <br /> <br />. The total return for 1991 was $322,423, on an average funds <br />balance (including cash in bank) of $4,228,255, which equates to <br />an average yield of 7.63% for the year 1991. <br /> <br />- i <br />....j <br />~l <br />1\ <br />l <br />I <br />