Florida Workers’ Compensation Joint Underwriting Association Investment Committee Approves Investment Portfolio and Benchmarks
Aug 9, 2012
At its meeting today, August 9, 2012, the Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Investment Committee (“Committee”) approved a report by FWCJUA investment manager Prime Advisors Inc., confirming that the report is in compliance with FWCJUA policy statements and guidelines.
To view the meeting materials, click here.
In his overview of the investment marketplace, Marc Tollefson of Prime Advisors noted that three major circumstances are contributing to current market uncertainties: the European debt crisis; the pending U.S. “fiscal cliff” involving mandatory budget cuts; the Bush-era tax repeal and the end of payroll tax breaks; and slowing global economies in Europe, the U.S. and China.
“Each of these is delivering uncertainty into the market,” Mr. Tollefson explained. In the United States, he said markets are not “optimistic the politicians will do what is necessary” to solve the problems.
As a result, the FWCJUA’s action plan for its portfolio should be to continue moving toward getting fully vested and searching for high quality, diversified products, he added.
Representatives from Prime Advisors then reviewed portfolio changes, bond purchases, bond maturities, a “watchlist” for certain securities, investment guidelines and a detailed portfolio holdings report.
The Committee agreed to adopt Prime Advisors’ recommended custom benchmark for establishing the average duration and measuring the performance of the FWCJUA’s investment portfolio. Prime Advisor representatives recommended portfolio duration in the range of 3.3 to 4.3.
Prime Advisors is currently investing cash at a rate of approximately $2.5 million per week in a “laddered” portfolio, which will reach maximum maturity in 10 years, it was noted. The maturity structure of the benchmark has a laddered portfolio with bond maturities ranging from zero to 10 years, it was explained.
With no other business before the Investment Committee, the meeting was adjourned.
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