The Arkansas Board of Finance has approved increasing the target rate of return for the state’s investment portfolio. Board members voted unanimously to raise the rate from 2.8%-2.9% to 3.0%-3.1%, during their quarterly meeting on Wednesday.
The state’s investments are doing better than expected. During a presentation to the Board of Finance, Steven Kilgore, director of investment accounting for the Arkansas Treasurer’s office, said the state earned $71.9 million in interest payments from its investment portfolio in the most recent quarter. In the previous quarter, the state earned $59.2 million from interest payments.
“There was a month-by-month increase as interest rates were rising,” Kilgore said.
He said another reason for the increase is that bonds in the portfolio are maturing, meaning the full value of the bond is being repaid.
Steve Pulley, senior investment manager for the Arkansas Treasurer’s office, said the third quarter’s rate of return was above 3%, which exceeded the office’s projections.
According to the Arkansas Treasurer’s website, the state’s investment portfolio has about $9 billion in assets.
