Program Background

General Information

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.

Fast Facts

  • 95 percent of the credits were created by non-U.S. equity trading while 5 percent came from U.S.
  • $11,326 in brokerage credits were generated in calendar year 2015.

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

Directed Brokerage Credits Generated Each Year Bar Graph

Expenditures and Rebates

There were no directed brokerage expenditures in 2015. However, during the year, $33,084 was requested back in the form of rebates. These funds have been deposited into the Teachers’ Retirement Fund as additional income. 

Starting with a directed brokerage cash balance of $27,759 at the onset of the year, an addition of $11,326 brokerage credits generated during the year and cash rebates totaling $33,084, the 2015 ending cash balance was $6,502.

Expenditures and Rebates Bar Graph

Directed Brokerage Outstanding Credits at December 31, 2015

Broker/Dealer Balance Percentage
ConvergEx $4,010 61.7%
Frank Russell $2,492 38.3%

Total Balance: $6,502

Cash Ending Balance

Directed Brokerage Cash Ending Balance Bar Graph