Firemen's Annuity and Benefit Fund of Chicago, Illinois ... - Fabf.org
Firemen's Annuity and Benefit Fund of Chicago, Illinois ... - Fabf.org
Firemen's Annuity and Benefit Fund of Chicago, Illinois ... - Fabf.org
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
NOTE 3. INVESTMENT SUMMARY (CONTINUED)<br />
Investment Risk (continued)<br />
Interest Rate Risk<br />
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value <strong>of</strong> an investment.<br />
Investments held for longer periods are subject to increased risk <strong>of</strong> adverse interest rate changes.<br />
Investments are diversified to minimize the risk <strong>of</strong> loss resulting from over-concentration <strong>of</strong> assets in a<br />
specific maturity period, a single issuer, or an individual class <strong>of</strong> securities. The Plan requires investment<br />
managers to display an overall level <strong>of</strong> interest rate risk that is consistent with the benchmark specified by<br />
the Plan. The following table presents a summarization <strong>of</strong> debt investments at December 31, 2006 <strong>and</strong> 2005<br />
using the segmented time distribution method:<br />
Type <strong>of</strong> Investment Maturity 2006 2005<br />
Corporate bonds Less than 1 year $ 13,874,253 $ 829,553<br />
1-5 years 24,825,750 28,716,291<br />
6 - 10 years 29,402,830 30,824,822<br />
Over 10 years 51,056,989 37,607,094<br />
119,159,822 97,977,760<br />
U.S. <strong>and</strong> Foreign Government Less than 1 year 2,929,278 3,309,518<br />
obligations 1-5 years 14,242,730 13,241,682<br />
6 - 10 years 9,925,650 9,732,861<br />
Over 10 years 46,144,252 32,675,758<br />
73,241,910 58,959,819<br />
Total $ 192,401,732 $<br />
156,937,579<br />
18
Change language