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MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.
<br />[Referenced pages: 3, 4, 5, 9, 10, 11, 12, 13, 17, 18, 19, 20, 29, 30, 31, 32, 33, 34, 35]
<br />MEDIUM TERM CORPORATE NOTES (MTN): Refers to all corporate and depository institution debt
<br />securities with a maximum remaining maturity of five years or less, issued by corporations organized and
<br />operating within the United States or by depository institutions licensed by the United States or any state
<br />and operating within the United States. [Referenced pages: 12, 17]
<br />MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers'
<br />acceptances, etc.) are issued and traded. A money market mutual fund is a type of fixed income mutual
<br />fund that invests in debt securities characterized by their short maturities and minimal credit risk. Money
<br />market securities must be highly liquid and of the highest quality, thus money market mutual funds are
<br />among the lowest -volatility types of investments. [Referenced pages: 4, 12, 14, 15, 16, 18, 32]
<br />MONEY MARKET FUNDS: Seek to limit exposure to losses due to credit, market, and liquidity risks.
<br />Money market funds in the United States are regulated by the Securities and Exchange Commission (SEC)
<br />under the Investment Company Act of 1940. Rule 2a-7 of the act restricts the quality, maturity and diversity
<br />of investments by money market funds. Under this act, a money fund mainly buys the highest rated debt,
<br />which matures in under 13 months. The portfolio must maintain a weighted average maturity (WAM) of 60
<br />days or less and not invest more than 5% in any one issuer, except for government securities and
<br />repurchase agreements. Unlike most other financial instruments, money market funds seek to maintain a
<br />stable value of $1 per share. Funds are able to pay dividends to investors. [Referenced page: 12, 321
<br />MUTUAL FUND: An investment vehicle that is made up of a pool of funds collected from many investors for
<br />the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.
<br />Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital
<br />gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match
<br />the investment objectives stated in its prospectus. A money market mutual fund is a type of fixed income
<br />mutual fund that invests in debt securities characterized by their short maturities and minimal credit risk.
<br />[Referenced pages: 4, 12, 14, 15, 16, 32]
<br />MORTGAGE PASS -THROUGH SECURITY: These instruments are based on pooled home mortgages
<br />sold by federal agencies and instrumentalities such as Ginnie Mae and Freddie Mac. The amount of
<br />principal and interest paid to investors varies from month to month in part because homeowners may
<br />accelerate principal payments on a mortgage. The anticipated pay down schedule of the securities will vary
<br />from mortgage pool to mortgage pool. Mortgage pass -through securities are complex investment
<br />instruments that do not respond to market forces like other, more standard investment instruments. In a
<br />declining interest rate environment, mortgage pass -through investors face higher reinvestment risk and
<br />lower returns from their investment than investors in other instruments because homeowners tend to
<br />refinance in lower interest rate environments, accelerating the principal payments on their mortgages. Thus,
<br />the mortgage pass -through investor receives the accelerated principal payments at par and must reinvest
<br />these earnings in a lower interest rate environment. [Referenced page: 331
<br />NATIONAL ASSOCIATION OF STATE TREASURERS (NAST]: Provides advocacy and support that
<br />enables member states to pursue and administer sound financial policies and programs benefiting the
<br />citizens of the nation. The Association provides educational seminars and conferences, publications, policy
<br />and legislative information, and technical assistance to members. [Referenced page: 61
<br />NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO]: A NSRO is a credit
<br />rating agency (CRA] that issues credit ratings that the U.S. Securities and Exchange Commission (SEC]
<br />permits other financial firms to use for certain regulatory purposes. [Referenced page: 30]
<br />City of Santa Ana - Annual July 1, 2019 -
<br />Statement of Investment Policy %� F53 June 30, 2020
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