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Lone Star Investment Pool May 2024 Performance Update

Article

Comments by Mellon Investments Corp (Dreyfus), Investment Manager

May 31, 2024—After rising sharply in April, US Treasury bond yields fell as much as 20 basis points across the curve in May as the likelihood of any additional rate hikes diminished. Despite trending lower in the last week of May, the equity markets experienced solid gains. The Dow Jones Industrial Average, S&P 500 and Nasdaq-100 indexes reached new all-time highs and gained 4.8%, 2.3% and 6.9%, respectively. The April jobs report that was released in early May showed an unexpected softening. Nonfarm payrolls increased by 175,000, well below consensus estimates of 240,000. The unemployment rate ticked up to 3.9%. Core inflation increased in line with expectations in April, +0.3% month over month, taking the annual rate down to 3.6% from 3.8%. Headline inflation declined from 3.5% to 3.4% after increasing by 0.3% month over month. The figures come as a relief after three consecutive hotter-than-expected inflation reports to start the year. As was widely expected, the Federal Reserve (Fed) held interest rates steady in a range of 5.25-5.50% at the May 1 Federal Open Market Committee meeting. The Fed also trimmed its quantitative tightening activity by reducing the monthly cap for Treasury securities from $60 billion to $25 billion. At the end of May, the Fed funds futures market was pricing in one to two rate cuts for 2024, with the first cut coming in September at the earliest.

Lone Star Investment Pool Active Participants May 2024

  • Schools and colleges: 590
  • Other Governmental Entities: 91
  • Total: 681

Fund Performance

The following fund performance data is as of May 31, 2024.

Government Overnight Fund

Return Information

  • Average Monthly Return (a) 5.32%
  • SEC 7-day Fund Yield (b) 5.33%
  • Weighted Average Maturity One (c) 34 days
  • Weighted Average Maturity Two (c) 104 days
  • Portfolio Maturing beyond One Year 6%
  • Net Asset Value (NAV) $1.00
  • Annualized Expense Ratio 0.06%
  • Standard & Poor’s Rating AAAm

Investment Distribution

  • Agencies 42%
  • Treasuries 26%
  • Cash/Repo 23%
  • Money Market 9%

Total Assets

  • Book Value 6,436,480,836.99
  • Market Value 6,436,384,164.59


Corporate Overnight Fund

Return Information

  • Average Monthly Return (a) 5.44%
  • SEC 7-day Fund Yield (b) 5.45%
  • Weighted Average Maturity One (c) 45 days
  • Weighted Average Maturity Two (c) 79 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 83%
  • Cash/Repo 16%
  • Money Market 1%

Total Assets

  • Book Value 3,844,847,255.94
  • Market Value 3,844,293,923.88


Corporate Overnight Plus Fund

Return Information

  • Average Monthly Return (a) 5.46%
  • SEC 7-day Fund Yield (b) 5.47%
  • Weighted Average Maturity One (c) 59 days
  • Weighted Average Maturity Two (c) 97 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 96%
  • Money Market 3%
  • Cash/Repo 1%

Total Assets

  • Book Value 11,503,102,905.29
  • Market Value 11,500,971,131.31

(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.