Series 6: 5.5.1.1. Investment Objectives

5.5.1.1. Investment Objectives

LGIPs generally are formed to meet a specific investment objective. In most cases, LGIPs invest to protect the investors’ principal and provide them with cash liquidity. These pools invest in short-term securities to avoid credit, liquidity, and interest rate risks. Like money market mutual funds, these LGIPs try to maintain a constant NAV of $1. These are often referred to as stable NAV LGIPs.

Other LGIPs have the objective of maximizing returns within the constraints of safe, liquid investment options. In doing so, these variable NAV LGIPs introduce greater risk to the investor. These pools do no