Treasurer of State Dennis Milligan Announces 3rd Quarter Earnings

Treasurer of State Dennis Milligan Announces 3rd Quarter Earnings

Treasury receives final recommendations from investment consultants

Little Rock, Ark. (June 7, 2021) – The state earned $9.05 million for the third quarter of fiscal 2021, which ran from January through March, Treasurer of State Dennis Milligan announced recently to the State Board of Finance. That amount is similar to what the treasury earned during the fourth quarter of 2020.

“I point this out because those are very similar points in time: the initial response of our economy shutting down due to Covid, and now the start of its reopening,” Milligan said.

Milligan told the Board that the 10-year Treasury rate – which is the most relatable rate for the fixed-income sectors the state treasury invests in – is averaging around 1.60% after hitting a low of 0.53% last July as a result of the pandemic.

“While we continue to see historic activity in the stock market, the fixed-income market that we operate in is not experiencing the same quick rebound,” Milligan explained. However, he added, “We continue to see slight improvements each quarter.”

Milligan also reviewed a final report from a team of investment consultants the Board approved of the treasury hiring to study the state’s investment policies and procedures. Many of their recommendations have already been incorporated, while others will take longer to implement, he said.

“For instance, we are already in line with their recommendation on our portfolio allocation and are developing a plan for the Board to review that will start reporting on a ‘total return’ basis and setting benchmarks by which to measure future success,” he explained. “We also agree with the recommendation to achieve more corporate exposure in the portfolio and have taken early steps to determine the most appropriate way to do so.”

The consultants’ final recommendation was to review the state’s investment policy statement as well as current language in the law governing the State’s investments. Treasury staff are identifying a third-party to assist in this effort and will bring recommendations to the Board in the coming year, Milligan said.

To watch a more detailed video of the third-quarter investment report, click here

###