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Investment & Risk Management 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 Investment & Risk Management Investment Policy term or phrase. You'll also find information about the related policies and asset classes for each term.

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A


Active Asset Allocation - A form of asset allocation that seeks to increase returns and reduce risk by actively shifting allocations within a portfolio as market conditions change.

Related Policy


Active Performance - The return of a portfolio that is in excess of its benchmark return. This is the return of the active portfolio.

Related Policy


Active Risk - The volatility of the returns of the active portfolio.

Related Policy


Amendment Fee - A fee charged by an underwriter or a group of underwriters for any amendment(s) to the Credit Instrument (Letter of Credit/Line of Credit), Reimbursement Agreement or Trust Indenture.

Related Policy


Amortized Cost Method - The method of calculating a securities market value where the security is valued at the acquisition cost with adjustment for amortization of premium or accretion of discount.

Related Policy


Annual Commitment Fee - A fee charged by an underwriter or a group of underwriters covering the period from commitment to defeasance.

Related Policy


Arbitrage - The simultaneous purchase and sale of two instruments for the purpose of capturing a pricing disparity between them. The instruments do not need correlated price movements.

Related Policies


Asset-Backed Security - A security collateralized by assets such as automobile loans, agricultural equipment loans, and credit card loans. The loans are securitized by the issuer and usually placed with a trustee.

Related Policy


Authority or Agency - A state or local unit of government created to perform a single activity or a limited group of functions and authorized by the state legislature to issue bonded debt.

Related Policy