Prudent Investor One Year On

One year ago, ONE Investment launched a new era in municipal investing, establishing the ONE Joint Investment Board (ONE JIB) to invest the funds of six municipalities under the Prudent Investor Regime. This put in place the framework for any Ontario municipality interested in taking advantage of broader investment powers.

Launching during a global pandemic was a challenge, but it was also a case study in how markets can react and rebound, notes ONE JIB Vice Chair Geri James.

“Before we launched, we saw the market dive in response to the pandemic, and then recover as businesses, economies and governments adapted to the new reality,” said James, a seasoned investment strategist. “It’s a pattern we’ve seen time and again. It also reinforces our understanding that markets are resilient. Investing strategically over the long-term is an excellent way for municipal investors to generate strong returns to fund large projects and reserves.”

James notes that low interest rates continue to drive market growth, coupled with the substantial savings Canadians have accumulated over the past 18 months. As a result, they are investing in capital markets and housing, driving economic recovery and growth.

“These are long term investments. If we look at early performance though, it confirms that we have a strong, diverse portfolio that was able to take advantage of the market rebound,” James added.

It can be a challenge for local Treasurers to navigate markets and develop and monitor investment strategies. In its first year, the ONE JIB developed a methodology to help turn a Treasurer’s cash flow and capital plans into an investment asset mix that meets a municipality’s risk profile and meets its goals.

“The ONE Team was extremely helpful in guiding us through the whole process,” said Charlotte Edie, Director of Finance for the City Kenora, which is a founding member of the ONE JIB. “The reporting structures are also really strong. I have a strong understanding of the status of our portfolio and the municipality has a lot of say in how the funds should be invested.”

Part of the Prudent Investment Offering also included launching the ONE Global Equity Fund and the ONE Global Bond Fund. These products allow participating municipalities to invest in global securities, guided by expert fund managers. These funds open Ontario’s municipal investing to the world, with the opportunity to develop truly diverse, global portfolios.

James stresses that the ONE JIB, which involves deep experience in financial markets and municipal finance, develops an individual investment plan for each municipality. Each investing municipality has its own mix of the various funds available to meet its own unique goals and circumstances. The result is greater diversity and better risk management to deliver stronger long-term returns. Learn more about ONE’s Prudent Investor Offering.