Government Investment Pools Now Manage $967 Billion
Public agencies are increasingly pooling cash to manage budgets, with assets growing 4% for local households to monitor.
Updated on Oct. 30, 2026 in Investing
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Local government investment pools (LGIPs) reached $967 billion in assets during 2025, marking a 4% growth over the previous year. These pools allow local agencies to manage public funds through diversified portfolios ranging from Treasury notes to commercial paper.
Why it matters
The continued expansion of these pools highlights how government entities rely on pooled strategies for fund flexibility and stability. For residents, this reflects how local public tax dollars and operating budgets are managed before they are deployed for community services.
Total assets across 57 local government investment pools reached $967 billion in 2025, a 4% increase over 2024 levels. Average expense ratios rose slightly to 12.9 basis points in 2025, compared to 12.2 basis points the prior year.
The players
Securities and Exchange Commission
The federal agency that provides oversight for financial markets, though it does not regulate local government investment pools.
S&P Global Ratings
A financial services company that evaluates the creditworthiness of investments and began rating these government pools in 1992.
The details
LGIPs are established by states, counties, or joint powers authorities to offer a stable environment for public cash. These pools achieve their goals by investing in a mix of assets including bank deposits, municipal debt, asset-backed securities, and repurchase agreements. Because they are not regulated by the Securities and Exchange Commission, they prioritize low-risk, stable-value portfolios that aim to maintain a constant net asset value.
Timeline
1992: S&P Global Ratings began rating local government investment pools.
2024: This year served as the baseline for comparing asset growth and expense ratios.
2025: This was the primary period for the reported assets and expense figures.
Money Landscape
The growth of these investment pools follows a multi-decade trend of professionalized cash management for public entities. This sector has evolved significantly since the 1992 start of S&P Global Ratings coverage for LGIPs, reflecting a steady rise in the scale of assets held by local agencies.
While these pools do not directly hold personal savings, they influence the interest income and security of the public funds that pay for local infrastructure and services. Households should note that these pools are not regulated by the SEC, which is a factor to consider when reviewing local audit reports.
The takeaway
Public agency money management has grown to a nearly trillion-dollar sector focused on stability and fund accessibility. Consider reviewing your local government's annual financial report to see if they utilize these investment pools for public cash holdings.
Further reading
For more background on how public funds and other portfolios are managed, visit the Investing section.
Source note: This article includes information reported by Bond Buyer.
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