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Consideration of approval of agreement with Dana Investments to manage a portion of the City’s investment portfolio
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Submitted by:
Derik Summerfield
Department
Finance Department
A. Issue
The Finance Department is seeking to execute an agreement with Dana Investments to manage a portion of the City’s investment portfolio.
B. Background/Options
The City had a $97 million portfolio as of January 31, 2026 (Figure 1) that is managed by the Assistant Finance Director. The City is considered a “buy and hold” investor, meaning that fixed income investments are purchased and then held to maturity. The City portfolio consists of safe, highly-rated, fixed-rate investments including federal government issued securities, Wisconsin and other highly rated municipal bonds and certificates of deposit. An advantage of having a managed portfolio is that over time the rate of return does not fluctuate as much as a liquid investment like the local government investment pool or other investment funds (Figure 2).
Dana Investments was founded in 1980 and is headquartered in Brookfield, Wisconsin. The company’s investment philosophy and objectives are to preserve principal and provide consistent, risk-based returns. The City would enter into a non-discretionary agreement with Dana, meaning Dana has authority to invest funds without City approval on each investment as long as the investment is one that is covered by parameters set by the City. The City would use the Dana Limited Volatility product. This product invests in federal government securities with a focus on adjustable rate securities. This allows the portfolio to move with the interest rate market. As an example, Dana’s three-year rate of return is 5.32%, while the five-year rate of return is 2.72% which includes the low interest rate years of 2021 and 2022. To summarize, working with Dana Investments would do the following:
• Adjustable rate focus complements the current “buy and hold” fixed rate program
• Provides a customized, actively managed portfolio that is reactive to the market
• May result in higher returns with limited volatility while providing safety of principal
Figure 1. City Portfolio
Figure 2. Yield Comparison: Managed v Local Government Investment Pool
C. Strategic Plan (Area of Focus)
NA
D. Fiscal Impact
Dana charges a management fee based the assets under management:
• 0.20% for asset balances under $10 million
• 0.15% for the next $10 million of asset balance
• 0.10% for asset balances over $20 million
At this time, Finance staff intends to invest less than $10 million with Dana and so would be subject to the 0.20% of asset balances.
E. Recommendation
I recommend that the Financial Affairs Committee recommend to Common Council that an agreement is executed with Dana Investments to manage a portion portfolio. Total dollars to be invested to be determined by Finance staff with investment authority.