Local Government Investment Pools Hold $967 Billion

Assets in government-backed investment pools grew 4 percent in 2025 as the vehicles continue to provide flexible fund management.

Updated on Oct. 30, 2026 in Investing

Bold flat-color editorial illustration in navy, cream, and brass, depicting abstract geometric weights symbolizing government financial asset stability. — Local government investment pools managed $967 billion in assets throughout 2025, marking a 4 percent increase in total value over the previous year. AI Illustration. Upload story photo >

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In 2025, the 57 local government investment pools (LGIPs) operating across the United States managed a combined total of $967 billion in assets. This figure represents a 4% increase in total assets under management compared to the 2024 baseline.

Why it matters

These pools offer government agencies significant flexibility and provide stable value portfolios by investing in low-risk securities that maintain a constant net asset value. Their appeal lies in their ability to serve as a reliable financial vehicle for state and local entities.

State-sponsored pools manage $703 billion of the total, while locally sponsored pools hold $264 billion. Average expense ratios for these pools rose to 12.9 basis points in 2025 from 12.2 basis points in 2024.

The players

Securities and Exchange Commission

The federal agency responsible for protecting investors and maintaining fair, orderly, and efficient markets, which does not exercise regulatory authority over LGIPs.

S&P Global Ratings

An American financial services company that provides credit ratings for debt, equity, and securitized products and began evaluating LGIPs in 1992.

The details

Established by states, counties, or joint powers authorities, these pools utilize a wide range of investments including Treasury notes, bank deposits, commercial paper, and municipal debt. Unlike many other financial products, LGIPs are not regulated by the Securities and Exchange Commission.

1992: S&P Global Ratings began rating LGIPs.
2024: Assets and expense growth comparison baseline.
2025: Period for reported asset growth and expense ratios.

Market Dynamics

The growth of these pools highlights a parallel financial system operating alongside mainstream markets often governed by the Securities and Exchange Commission's regulatory oversight framework. This structure demonstrates a distinct preference for localized fund management over federal mandates.

For the average taxpayer, the growth of these pools suggests that local government entities are actively seeking yield and liquidity for public funds. Investors interested in municipal finance should note that these pools function differently than standard retail money market funds.

The takeaway

These investment pools serve as a primary tool for government entities to manage public cash flows while prioritizing capital preservation. Understanding these vehicles helps observers gauge how local governments are navigating interest rate environments and liquidity needs.