Program Background

General Information

Fast Facts


  • 55 percent of the credits were created by U.S. equity trading, 40 percent came from non-U.S. and 5 percent from emerging markets trading.
  • $133,882 in brokerage credits were generated in calendar year 2014.

The CalSTRS Directed Brokerage Program, which started in the 1980s, was designed to take advantage of the credits being created from CalSTRS investment transactions both by internal staff and external managers. These credits were used to help offset the cost of running the overall investment program, thereby reducing the burden on the Appropriated Support budget and the Continuously Appropriated budget.

In the decade of the 2000s, we have seen the creation of credits drop as they were discontinued on the issuance of new debt obligations within the fixed income industry. The level of new credits created this past calendar year marks the seventh consecutive annual decline.

Directed Brokerage Credits Generated Each Year

Bar chart showing steady decrease of credits from a little over 4,000,000 in 2000 to about 100,000 in 2014.

Expenditures and Rebates

There were no directed brokerage expenditures in 2014. However, during the year, over $423,954 was requested back in the form of rebates. These funds have been deposited into the fund as additional income.

The directed brokerage cash balance started the year at $317,831 and increased by $133,882 from brokerage credits generated during the year. After withdrawing $423,954 in cash rebates for the fund, the directed brokerage cash balance ended the year at $27,759.

Bar chart showing cash ending balance high of over 5,000,000 in 2001, falling to near 0 in 2006, rising to over 2,000,000 in 2007, and ending near 100,000 in 2014.

Directed Brokerage Outstanding Credits at December 31, 2014

Broker / Dealer Balance Percentage
ConvergEx $27,298 98.3%
Frank Russell 460 1.7%

Total Balance: $27,759

Cash Ending Balance

Bar chart showing cash ending balance high of over 5,000,000 in 2001, falling to near 0 in 2006, rising to over 2,000,000 in 2007, and ending near 0 in 2014.