The year-end fund balances are being reported on a market to market basis. That is, the balances reported include any unrealized changes in the market value of the fund as on December 31, 2019. This change in market value would only be realized should all or a portion of the fund be withdrawn. For financial statement purposes, this fund is recorded at the book value of the investment which includes realized income from fund distributions and investment income withdrawals which was $2,859,090.
Sector |
Total, December 31, 2019 |
% of Portfolio, December 31,2019 |
2019Return |
2019Average Yield |
|---|---|---|---|---|
ONE Investment Program Universe Bond Fund |
$2,352,440 |
80.02% |
$99,589 |
4.37% |
| Equity Fund | 587,246 | 19.98% | 115,409 | 20.00% |
Total |
$2,939,686 |
100.00% |
$214,998 |
7.53% |
On December 19, 2019, consistent with Council’s direction, $41,527 representing the minimum distribution of 1.5% of the investment income was withdrawn from the Trust and placed within a capital project designated as a funding source for City art related capital projects. As of the end of 2019, the balance of the capital project was $82,778. These funds have been dedicated towards an arts related project CR99/2020.
Unlike other types of investments such as GIC’s where a guaranteed yield is paid at time of maturity, any gains or losses due to market value increases are not realized until such time as units are redeemed. At any measurement point market values may be higher or lower than the previous mark. The intent of the Arts Endowment Trust was to ensure that in perpetuity funds generated from investment yields would be available to support capital projects that have an arts related component. As such, preservation of the principle investment of $2,750,000 is of upmost importance. However of equal importance is the realization of any yields as a result of substantial market value gains through the redemption of units at a time when market values are high. This mitigates against the risk that those yields are not available should the funds be required. The timing of when to realize gains can never be known with any certainty. Market values can continue to rise and/or market values can decline overnight.
Administration will continue to monitor the fund balances and report to Council should there be the need for alternative courses of actions so as to preserve any fund gains or losses.