CalPERS

Global Fixed Income Glossary

This Glossary identifies, defines, and clarifies the meaning of investment terms used by CalPERS in our investment policies. The purpose of the Glossary is to establish a uniform vocabulary of terms for users of these policies.

Choose from the letters below to find a specific Global Fixed Income Investment Policy term or phrase. You'll also find information about the related policies and asset classes for each term.

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F


Fed Funds - Immediately available funds borrowed by banks from certain other financial institutions and government agencies that are exempt from reserve requirements.

Related Policies


Federal Open Market Committee - The Federal Reserve committee that has authority over monetary policy and consists of the seven members of the Board of Governors, as well as five of the 12 regional bank presidents. The president of the New York regional bank is always a member of the committee.

Related Policies


Financial Futures - A contract to trade a financial investment, like a Treasury bond, at a specific price and future date. As interest rates rise or fall, the value of such contract falls or rises respectively.

Related Policies


Fitch Ratings (Fitch) - A nationally-recognized credit rating agency that grades the investment quality of bonds in a 10-symbol system. The ranges extend from the highest investment quality, which is AAA, to the lowest credit rating, which is D. Securities rated BBB- or greater are considered investment-grade. Securities rated BB+ or below are considered to be speculative.

Related Policies


Floating Rate Notes - Securities that have a coupon or interest rate adjusted whenever a predefined change in interest rate occurs. Typically, floating rate notes coupons are based on a short-term rate index.

Related Policy


Floating Rate Security - A bond whose coupon rate is reset periodically (i.e., daily, weekly, monthly, or quarterly). The coupon rate is tied to one of a variety of indices.

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Floors - Provide insurance against rate of interest on a floating rate loan dropping below a certain level.

Related Policy


Foreign Debt Policy - CalPERS' guidelines for permissible country debt investments, as most recently amended.

Related Policy


Forward Contract (Forwards) - An instrument that allows the purchase or sale of a specific quantity of a commodity, government security, foreign currency, or other financial instrument at the current price, with delivery and settlement at a specified future date.

Related Policy


Futures - Exchange-traded contracts to buy or sell a standard quantity of a given instrument, at an agreed price, and date. A future differs from an option in that both parties are obliged to abide by the transaction. Futures are traded on a range of underlying instruments including commodities, bonds, currencies, and stock indices.

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