A Good Year for Public Funds Investors
It’s been a good year for public funds investors. You can access indices and other current information on the Investment Dashboard here. Meanwhile, reflect on this question: Are interest rates higher or lower than a year ago? As economists are wont to say, “It depends.” Short-term yields are significantly lower. The Federal Reserve’s policy […]
Changing Local Government Investment Pool Managers: Replace the Manager or Create a New LGIP?
This LGIP Just Changed Managers. LGIPs rarely change managers. Sure, when a manager is sold this is viewed as a change under Federal law and triggers client approval, but the sale is usually described as “new owner, same dedicated employees.” Advisory agreements are normally renewed when they expire, perhaps with the board undertaking some diligence […]
How Far/How Fast: The Path for Pool Yields is Lower
The Federal Reserve is on the cusp of cutting rates. That much is crystal clear. When it does—most likely starting at its meeting September 18-–the yields on LGIPs and money funds will decline as well. How far and how fast will they fall? Here is a perspective on that question: LGIP and money fund yields […]
What the Big Bond Market Rally Means for Public Funds Investors
Last week’s big decline in interest rates feels a lot more real than the similar move at the beginning of the year. If so, what does it mean for public funds investors? The rally in bond prices boosted the returns on our 1–3-year model portfolio ahead of cash returns for the first time in several […]
Public Sector Investment Assets Grew Strongly Last Year, Providing a Budget Cushion for States and Localities
The details. Investment assets grew by 7.5% last year, propelled by strong state and local tax collections, budget surpluses and investment earnings at rates that finished the year at their highest levels in a generation. The growth came after two years, 2020 and 2021, where Covid relief funds swelled state and local budgets. In that […]
Illinois LGIP Could Open a Pool for Non-Profits
Illinois by Nick Youngson CC BY-SA 3.0 Pix4free The Illinois Treasurer is seeking authority to create a local government investment pool for non-profit organizations. Senate Bill 3157 (and an identical bill in the House) would authorize a Non-Profit Investment Pool to operate in a manner similar to the Illinois Public Treasurer’s Pool (Illinois Funds), the […]
Recent Market Moves, LGIP Legislation in Nebraska and More. . .
This week’s Beyond the News has commentary on recent market moves, proposed local government investment pool legislation in Nebraska and a capital raise by Public Trust Advisors. Check out the updated Dashboard here. Recent Market Moves Have Had Almost No Effect on LGIP Yields The bond market has had a bumpy couple of months. Two […]
2024 Investment Environment: Treasuries on Top
The year begins with a fresh look at the public funds investment universe. Since most public sector investment policies limit investments by maturity and quality we focus on the universe of high-quality investment grade securities with maturities of three years or less. Excluded are foreign-issued securities and corporate bonds rated less than A. The big […]
LGIP Trends: Higher Yields, Plateauing Assets, a Bit More Risk
Moderating asset growth, higher yields, and a move to a somewhat less defensive market risk position sum up local government investment pool fundamentals in the second quarter.
SEC Money Fund Reforms Raise Important Issues for LGIPs
The SEC’s recently adopted money fund reform rules should lead LGIPs to consider whether to make similar changes to their operations