Lone Star Investment Pool August 2024 Performance Update
Comments by Mellon Investments Corp (Dreyfus), Investment Manager
August 31, 2024—After sharp declines in July, US Treasury yields continued to trend lower in August. Yields fell up to 34 basis points during the month with the one- to two-year area of the curve leading the decline. The US equity markets were higher with the Dow Jones Industrial Average, S&P 500, and Nasdaq-100 indexes advancing 1.8%, 2.3%, and 0.6%, respectively. A cooling labor market appears to be solidifying the prospect of a forthcoming cut. July’s labor market report was weaker than expected with job gains missing to the downside: +114,000 versus +175,000 consensus. The 3-month moving average remains around +170,000. The disinflation trend stayed consistent, with recent data showing producer price inflation coming in below and consumer price inflation in line with market expectations. The Federal Reserve’s (Fed’s) preferred measure of inflation (i.e., Core PCE) came in slightly lower than expectations, at 2.6% year over year, after increasing 0.2% month over month. The monthly increase is consistent with attaining the Fed’s 2% inflation target. At the next Federal Open Market Committee meeting on September 18, the market is expecting a 25-basis point cut in the target rate. It would be the first rate cut since the beginning of the pandemic in March 2020 and the first change in the policy rate since the Fed increased rates in July 2023.
Lone Star Investment Pool Active Participants August 2024
- Schools and colleges: 594
- Other Governmental Entities: 91
- Total: 685
Fund Performance
The following fund performance data is as of August 31, 2024.
Government Overnight Fund
Return Information
- Average Monthly Return (a) 5.32%
- SEC 7-day Fund Yield (b) 5.32%
- Weighted Average Maturity One (c) 23 days
- Weighted Average Maturity Two (c) 92 days
- Portfolio Maturing beyond One Year 5%
- Net Asset Value (NAV) $1.00
- Annualized Expense Ratio 0.06%
- Standard & Poor’s Rating AAAm
Investment Distribution
- Agencies 41%
- Cash/Repo 37%
- Treasuries 21%
- Money Market 1%
Total Assets
- Book Value 6,140,044,215.75
- Market Value 6,140,844,510.18
Corporate Overnight Fund
Return Information
- Average Monthly Return (a) 5.43%
- SEC 7-day Fund Yield (b) 5.44%
- Weighted Average Maturity One (c) 39 days
- Weighted Average Maturity Two (c) 74 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 79%
- Cash/Repo 18%
- Money Market 3%
Total Assets
- Book Value 3,167,357,847.79
- Market Value 3,167,895,830.29
Corporate Overnight Plus Fund
Return Information
- Average Monthly Return (a) 5.44%
- SEC 7-day Fund Yield (b) 5.44%
- Weighted Average Maturity One (c) 46 days
- Weighted Average Maturity Two (c) 89 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 98%
- Cash/Repo 1%
- Money Market 1%
Total Assets
- Book Value 8,925,050,299.83
- Market Value 8,926,479,961.70
(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.