Sarasota County, Florida Notes to Financial Statements September 30, 2023 Credit Risk Credit risk exists when there is a possibility the issuer, or other counterparty to an investment, may be unable to fulfill its obligations. GASB No. 40 requires disclosure of credit quality ratings for investments in debt securities as well as investments in external investment pools, money market funds, and other pooled investments of fixedincome securities. Credit Risk for FMIvT Funds in the portfolio is as follows: Concentration of Credit Risk The Countys investment policy establishes limitations on portfolio composition, both by investment type and dealer, in order to control concentration risk. The following maximum limits are guidelines established for diversification by market sector: Equities 50% Fixed Income 40% Real Estate 10% A variance of more than 10% from the approved allocation percentages of any asset class requires approval by the Master Trustees. The following table reflects the government trustees investment deposits, level of investment in each market sector, and investment by sector as a percentage of total investment: Custodial Credit Risk GASB No. 40 modifies the existing GASB No. 3 custodial credit risk reporting requirements. Under GASB No. 3, governments had to categorize their investments into one of three custodial credit risk categories. This is no longer required. Participants investments in the FMIvT are evidenced by shares of the pool, not the securities that make up the pool. Interest Rate Risk Interest rate risk exists when there is a possibility that changes in interest rates could adversely affect an investments fair value. GASB No. 40 requires that interest rate risk be disclosed using one of the five approved methods. The five methods are: segmented time distribution, specific identification, weighted average maturity (WAM), duration, and simulation model. Different methods may be presented for different types of investments. Asset Class Portfolio Allocation Amount in Trust as of September 30, 2023 Cash 0.2% 13,229 $ Broad Market High Quality Bonds 19.7% 1,303,057 Core Plus Fixed Income 19.4% 1,283,214 Diversified Large Cap 23.3% 1,541,181 Diversified Small to Mid Cap 6.4% 423,328 International Equity 16.9% 1,117,851 Core Real Estate 14.1% 932,645 100.0% 6,614,505 $ 102
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