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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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Scenario Analysis - Projects returns over a number of changing situations (such as interest rates, curve twists, spreads, etc.) and weighs each situation to arrive at an average expected return. This process allows comparisons to varying types of securities and portfolios.

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Sector Risk - Sector Risk is the risk of holding sectors proportionally different from the index.

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Security - Instrument that signifies an ownership position in a corporation (stock), a creditor relationship with a corporation or governmental body (bond), or rights to ownership such as those represented by an option, subscription right, and subscription warrant.

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Senior Investment Officer of Asset Allocation - The Senior Investment Officer is responsible for all asset allocation programs and reports directly to the Chief Investment Officer of CalPERS.

Related Policy


Senior Investment Officer of Global Equities - The Senior Investment Officer is responsible for all Global Equities programs and reports directly to the Chief Investment Officer of CalPERS.

Related Policy


Senior Investment Officer of Global Fixed Income - The Senior Investment Officer is responsible for all Global Fixed Income programs and reports directly to the Chief Investment Officer of CalPERS.

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Short Duration Program - A program managed by CalPERS staff that is designed to earn a return premium versus traditional short duration assets through a modest increase in portfolio duration and by purchasing a broader universe of short duration securities than those typically available to traditional money market portfolios.

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Short Selling - Selling securities that are not owned and buying them back later to: 1) take advantage of an anticipated decline in the price; or 2) to protect a profit in a long position.

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Shortfall Risk - The risk of underperforming the benchmark

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Sovereign - A security issued by a foreign government or government sponsored agency.

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Speculation - Assumption of risk in anticipation of gain but recognizing a higher than average possibility of loss.

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Split-Rated Security - A security that has a different credit classification by two rating agencies. For the purpose of this policy, a security is called a split-rated security, if Standard & Poor's and Moody's report a difference in the ratings.

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Standard & Poor's (S&P) - 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 speculative.

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State Street Bank Short-Term Investment Fund - An institutional money market mutual fund managed by State Street Global Advisors.

Related Policies


Structure Risk - Structure Risk arises from the options implicit in bonds (e.g. callable and optional sinking fund bonds) or the rules governing cash flow that differs from expectations.

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Structured Securities - An instrument that is secured by assets like receivables, mortgages, and bonds. Examples of structured securities are asset backed securities, mortgage backed securities, commercial mortgage backed securities, collateralized mortgage obligations, collateralized debt obligations, and collateralized loan obligations.

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Supranational Entities - Multinational organizations usually formed for providing financial assistance to less developed countries. Examples of supranational entities include the World Bank and the International Monetary Fund (IMF).

Related Policy


Swap - Private agreement between two companies to exchange cash flows in the future according to a prearranged formula.

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