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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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M


Mark-to-Market - A method of determining the value of securities by applying current trading prices of similar or identical securities to the securities being valued.

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Medium Term Notes - A debt security, like any other senior or subordinated debt, with a maturity of two to 10 years offered through one or more dealers. Medium-term notes are fixed coupons and maturities that can be targeted to meet investor requirements. They are issued in the capital markets either publicly under a Securities Exchange Commission 415 shelf registration or privately without such registration.

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Monetary Policy - Refers to the management of the money supply to affect the macro economy through movements in the level of short-term interest rates, such as the Fed Funds and the Discount Rate, or supplying more credit to the banking system through open market operations.

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  • No related policies

Money Market Fund - Fund that invests in commercial paper, banker's acceptances, repurchase agreements, government securities, certificates of deposit, and other highly liquid and safe securities, and pays money market rates of interest.

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Money Market Security - A short-term, highly-liquid, and relatively low-risk debt instrument (i.e., commercial paper, certificates of deposit, bankers acceptances, U.S. Government Agency discount notes, bank notes, and Treasury Bills and Notes).

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Moody's Investors Service (Moody's) - A nationally-recognized credit rating agency that grades the investment quality of bonds in a 9-symbol system. The ranges extend from the highest investment quality, which is Aaa, to the lowest credit rating, which is C. Securities rated Baa3 or greater are considered investment grade. Securities rated Ba1 or below are considered to be speculative.

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Mortgage-Backed Security (MBS) - A general term used to describe securities backed by mortgages. MBSs are broken down into four types of securities: mortgage pass-through, mortgage-backed bond, collaterallized mortgage obligation (CMO), and stripped mortgage-backed bonds. Mortgage pass-throughs are pooled loans, typically issued by the Government National Mortgage Association, Federal National Mortgage Association, and Federal Home Loan Mortgage Corporation. Mortgage-backed bonds have mortgage loans as collateral, but the term and interest payments are fixed. CMOs are defined above. Stripped mortgage-backed securities have the principal and interest distribution altered from a pro rata distribution to an unequal distribution.

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Municipal Bond - Bonds issued by any of the 50 states, the territories and their subdivisions, counties, cities, towns, villages and school districts, agencies (such as authorities and special districts created by the states), and certain federally-sponsored agencies (such as local housing authorities). There are two broad groups of municipals: 1) Public Purpose bonds, which remain tax-exempt and can be issued without limitation; and (2) Private Purpose Bonds, which are taxable unless specifically exempted.

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