Lone Star Investment Pool August 2023 Performance Update
Comments by Mellon Investments Corp (Dreyfus), Investment Manager
August 31, 2023—The U.S. Treasury yield curve became slightly steeper in August as yields on longer bonds rose as much as twenty basis points. Yields on Treasury securities maturing within three years finished the month within five basis points of where the month began. The equity markets rallied for most of 2023, but they traded slightly lower in August. Inflation continued to fall from the 9% levels experienced last year, but it remains above the Federal Reserve’s (Fed) target. The labor market continued to be resilient, but some cracks in the jobs market emerged recently. The Job Openings and Labor Turnover Survey (JOLTS) was weaker than expected. The unemployment rate rose by 0.3% to 3.8% in August; however, part of that increase was due to a rise in the labor force participation rate. The market has discounted a future rate hike, despite the Fed indicating that they will raise the target if needed. The next Federal Open Market Committee (FOMC) meeting is September 20. The market is expecting the Fed to pause at this meeting. The odds of a rate hike at the November 1 meeting fell sharply in the last week of August, but there will be plenty of economic data in the next two months, which may change that outlook.
Lone Star Investment Pool Active Participants August 2023
- Schools and colleges: 585
- Other Governmental Entities: 83
- Total: 668
Fund Performance
The following fund performance data is as of August 31, 2023.
Government Overnight Fund
Return Information
- Average Monthly Return (a) 5.30%
- SEC 7-day Fund Yield (b) 5.31%
- Weighted Average Maturity One (c) 18 days
- Weighted Average Maturity Two (c) 89 days
- Portfolio Maturing beyond One Year 9%
- Net Asset Value (NAV) $1.00
- Annualized Expense Ratio 0.06%
- Standard & Poor’s Rating AAAm
Investment Distribution
- Cash/Repo 49%
- Agencies 42%
- Treasuries 7%
- Money Market 2%
Total Assets
- Book Value 5,516,629,799.28
- Market Value 5,516,603,160.69
Corporate Overnight Fund
Return Information
- Average Monthly Return (a) 5.49%
- SEC 7-day Fund Yield (b) 5.51%
- Weighted Average Maturity One (c) 32 days
- Weighted Average Maturity Two (c) 67 days
- Portfolio Maturing beyond One Year 0%
- Net Asset Value (NAV) $1.00
- Annualized Expense Ratio 0.06%
- Standard & Poor’s Rating AAAm
Investment Distribution
- Commercial Paper 86%
- Cash/Repo 9%
- Money Market 4%
- Agencies 1%
Total Assets
- Book Value 3,446,282,570.87
- Market Value 3,446,295,110.04
Corporate Overnight Plus Fund
Return Information
- Average Monthly Return (a) 5.53%
- SEC 7-day Fund Yield (b) 5.55%
- Weighted Average Maturity One (c) 44 days
- Weighted Average Maturity Two (c) 84 days
- Portfolio Maturing beyond One Year 0%
- Net Asset Value (NAV) $1.00
- Annualized Expense Ratio 0.06%
- Standard & Poor’s Rating AAAf/S1+
Investment Distribution
- Commercial Paper 94%
- Cash/Repo 4%
- Money Market 1%
- Agencies 1%
Total Assets
- Book Value 9,678,115,695.60
- Market Value 9,678,155,562.27
(a) The return information represents the average annualized rate of return on investments for the time period referenced. Return rates reflect a partial waiver of the Lone Star Investment Pool operating expense. Past performance is no guarantee of future results.
(b) SEC 7-Day Yield Calculation: Yield=2 [[a-b/cd +1]6 -1]
a - Dividend and interest income
b - Expenses accrued for the period
c - Average daily number of shares outstanding during the period that was entitled to dividends
d - Maximum offering price per share on the last day of the period
(c) The Weighted Average Maturity One calculation uses the industry standard definition of state maturity for floating rate instruments, the number of days until the next reset date. The Weighted Average Maturity Two calculation uses the final maturity of any floating rate instruments, as opined in Texas Attorney General Opinion No. JC0359.