55A - ADOPT RESO FOR ANNUAL STATEMENT AND RECIEVE AND FILE

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operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. [Referenced pages: 12, 18] MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers' acceptances, etc.) are issued and traded. A money market mutual fund is a type of fixed income mutual fund that invests in debt securities characterized by their short maturities and minimal credit risk. Money market securities must be highly liquid and of the highest quality, thus money market mutual funds are among the lowest -volatility types of investments. [Referenced pages: 4, 12, 13, 15, 17, 18, 34] MONEY MARKET FUNDS: Seek to limit exposure to losses due to credit, market, and liquidity risks. Money market funds in the United States are regulated by the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940. Rule 2a-7 of the act restricts the quality, maturity and diversity of investments by money market funds. Under this act, a money fund mainly buys the highest rated debt, which matures in under 13 months. The portfolio must maintain a weighted average maturity (WAM) of 60 days or less and not invest more than 5% in any one issuer, except for government securities and repurchase agreements. Unlike most other financial instruments, money market funds seek to maintain a stable value of $1 per share. Funds are able to pay dividends to investors. [Referenced pages: 12, 34] MUTUAL FUND: An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus. A money market mutual fund is a type of fixed income mutual fund that invests in debt securities characterized by their short maturities and minimal credit risk. [Referenced pages: 4, 13, 15, 17, 34] MORTGAGE PASS -THROUGH SECURITY: These instruments are based on pooled home mortgages sold by federal agencies and instrumentalities such as Ginnie Mae and Freddie Mac. The amount of principal and interest paid to investors varies from month to month in part because homeowners may accelerate principal payments on a mortgage. The anticipated pay down schedule of the securities will vary from mortgage pool to mortgage pool. Mortgage pass -through securities are complex investment instruments that do not respond to market forces like other, more standard investment instruments. In a declining interest rate environment, mortgage pass -through investors face higher reinvestment risk and lower returns from their investment than investors in other instruments because homeowners tend to refinance in lower interest rate environments, accelerating the principal payments on their mortgages. Thus, the mortgage pass -through investor receives the accelerated principal payments at par and must reinvest these earnings in a lower interest rate environment. [Referenced page: 35] NATIONAL ASSOCIATION OF STATE TREASURERS (NAST]: Provides advocacy and support that enables member states to pursue and administer sound financial policies and programs benefiting the citizens of the nation. The Association provides educational seminars and conferences, publications, policy and legislative information, and technical assistance to members. [Referenced page: 6] NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO]: A NSRO is a credit rating agency (CRA] that issues credit ratings that the U.S. Securities and Exchange Commission (SEC] permits other financial firms to use for certain regulatory purposes. [Referenced pages: 10, 12, 32, 34, 35] OPTION: Right to buy or sell property that is granted in exchange for an agreed upon sum. If the right is not exercised after a specified period, the option expires and the option buyer forfeits the money. [Referenced page: 35] PAR AMOUNT: The face amount or value of a bond. [Referenced pages: 19, 20] City of Santa - Annual Page F July 1, 2020 - Statement of Investment Policy June 30, 2021 55A-70