Treasurer Dennis Milligan Announces Second Quarter Investment Report

Treasurer of State Dennis Milligan Releases Second Quarter Investment Report

Earnings fulfill state financial obligations, nearly double previous quarter

Feb. 8, 2022 (Little Rock, Ark.) – The state’s treasury earned $14.4 million during the second quarter of fiscal 2022, compared to $8.39 million for the same quarter one year ago, Treasurer of State Dennis Milligan reported to the State Board of Finance today. 

“The two biggest reasons for the wide margin of increase in year-over-year returns are the rise in 10-year Treasury rates – which are our biggest indicator of how the fixed-income market is faring – and additional state revenue we were able to invest,” Milligan said. 

At an average of 1.47% in December, the last month of the second quarter, 10-year Treasury rates were nearly back to where they were prior to the start of the pandemic. The second quarter of fiscal 2022 ran from October through December of 2021.

During the quarter, the treasury earned $13.8 million from its long-term portfolio and roughly $604,700 from its short-term portfolio. The treasury’s long-term investments are made up mostly of mortgage-backed securities, agency bonds and other collateralized mortgage obligations. Its short-term investments consist mostly of commercial paper and money market accounts.

In the first six months of fiscal 2022, the treasury has already fulfilled its annual monetary obligations to the state, including $5 million to the Budget Stabilization Fund and $20 million to the state’s Highway fund. 

“The total revenue for the first six months of fiscal 2022 was $27.5 million – roughly 77% of the total we earned during all of FY ’21,” Milligan said. “The total amount we’ve earned for the state during my administration is now over $456 million.”

Looking toward the remainder of the fiscal year, much of the data – low unemployment, new job creation and the Fed’s intention to raise interest rates – would suggest there will be better offering rates within the fixed-income sector, Milligan told the Board.

“However, with the uncertainty surrounding the ongoing pandemic, continued issues with the supply chain and inflation at its highest level in nearly 40 years, investors are questioning how the market will respond to all these variables,” he said. “Yet our priorities remain the same: To do the best that we can to ensure the safety of the state’s $5 billion dollar investment portfolio; to ensure we have enough liquidity to pay the state’s bills; and finally, to ensure that we get the best return possible.”  

To watch a video summary of the treasury investment report, click here or watch below. 

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Dennis Milligan was elected Treasurer of State in 2014 and re-elected in 2018. The State Treasury is responsible for overseeing the state’s $5 billion portfolio. Since taking office in 2015, Milligan has receipted the state more than $456 million in investment returns and has grown the investment portfolio’s receipts to record highs. www.artreasury.gov.