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Lone Star Investment Pool September 2024 Performance Update

Article

Comments by Mellon Investments Corp (Dreyfus), Investment Manager

September 30, 2024—US Treasury yields moved lower in September for the third month of declines. Yields fell up to 50 basis points (bps) during the month with the front-end of the curve leading the decline. The US equity markets continued to move higher as the Dow Jones Industrial Average and S&P 500 indexes reached all-time highs on the last day of September. During the month, the Dow Jones Industrial Average, S&P 500, and Nasdaq-100 indexes advanced 1.8% and 2.0%, and 2.7%, respectively. The Federal Reserve (Fed) cut the policy rate by 50 bps to a range of 4.75% to 5.0% at the September 18 Federal Open Market Committee (FOMC) meeting. The larger-than-anticipated cut (based on economists’ consensus) was described as a recalibration of policy and delivered to maintain the economy’s strength, according to Chair Jerome Powell. He cautioned that the market should not infer that the pace of cuts will continue at 50 bps. The Summary of Economic Projections (SEP) showed that in aggregate the Fed pencilled in two more 25-bps this year and roughly a 25-bps cut each quarter in 2025, bringing the policy rate to about 3.25 to 3.5% by 2025 year-end. Their projections see unemployment increasing to 4.4% but stabilizing at that level as growth remains at 2.0% throughout the forecast horizon. The next FOMC meeting is scheduled for November 7. The Fed funds futures market is fully pricing-in a cut of 25 bps at that meeting.

Lone Star Investment Pool Active Participants September 2024

  • Schools and colleges: 597
  • Other Governmental Entities: 91
  • Total: 688

Fund Performance

The following fund performance data is as of September 30, 2024.

Government Overnight Fund

Return Information

  • Average Monthly Return (a) 5.17%
  • SEC 7-day Fund Yield (b) 4.95%
  • Weighted Average Maturity One (c) 14 days
  • Weighted Average Maturity Two (c) 105 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

  • Agencies 42%
  • Cash/Repo 22%
  • Treasuries 18%
  • Money Market 18%

Total Assets

  • Book Value 5,958,124,746.28
  • Market Value 5,960,276,161.57


Corporate Overnight Fund

Return Information

  • Average Monthly Return (a) 5.32%
  • SEC 7-day Fund Yield (b) 5.12%
  • Weighted Average Maturity One (c) 31 days
  • Weighted Average Maturity Two (c) 70 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 82%
  • Money Market 11%
  • Cash/Repo 7%

Total Assets

  • Book Value 3,055,048,052.76
  • Market Value 3,056,591,665.06


Corporate Overnight Plus Fund

Return Information

  • Average Monthly Return (a) 5.33%
  • SEC 7-day Fund Yield (b) 5.15%
  • Weighted Average Maturity One (c) 34 days
  • Weighted Average Maturity Two (c) 76 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 91%
  • Money Market 6%
  • Cash/Repo 3%

Total Assets

  • Book Value 9,530,629,759.31
  • Market Value 9,535,063,646.36

(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.