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Return of money or return on money? Analyzing asset concentration of local government investment pool portfolios

Jeongwoo Kim (Eastern Kentucky University)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Article publication date: 1 March 2016

161

Abstract

The recent financial crisis provides an opportunity to examine the management of local government investment pools (LGIPs). This study examines asset concentration of current LGIPs to find if investment practices of LGIPs are consistent with the objective of prudent management of public funds. Using cross-sectional data of 72 LGIP portfolios, exploratory factor analysis was conducted. Findings suggest that there are five underlying factors that describe the investment practices of current LGIP portfolios. The findings also suggest that LGIP investment managers considered return on investment when they chose investment instruments. However, LGIP managers put more focus on the safety of investment when they allocated assets in their portfolio.

Citation

Kim, J. (2016), "Return of money or return on money? Analyzing asset concentration of local government investment pool portfolios", Journal of Public Budgeting, Accounting & Financial Management, Vol. 28 No. 1, pp. 1-25. https://doi.org/10.1108/JPBAFM-28-01-2016-B001

Publisher

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Emerald Publishing Limited

Copyright © 2016 by PrAcademics Press

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