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Editor's Perspective

The SVIA staff and the Stable Times Editorial Board have completed our testing and contingency planning, and our faithful readers will be relieved to know that this final Stable Times of the 1900's is guaranteed to be 100% Y2K compliant. Even Dr. Yardeni, one of the featured speakers from the Association conference and frequent Y2K alarmist, can trust us on this. So if you are concerned about going out on New Year's eve for fear that you will not be able to get back home, feel free to ring in the year 2000 by reading the Stable Times.¹

This issue of Stable Times includes coverage of the recent Association conference as well as articles on other topics from our members. We highlight some of the trends, challenges, and opportunities facing the stable value industry. As Churchill noted, "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty." Our goal as an industry should be to, not only take advantage of the positive trends, but to convert the challenges or difficulties we face into opportunities to help investors and grow our business.

To help put the future in perspective, we start by highlighting where we are today. Judy Markland, from Landmark Strategies highlights some of the major findings from the Association's third annual survey of investments and investment policies in stable value funds.

Ron McHugh, from John Hancock gives us a timely look at a new opportunity for insurance companies to leverage their existing stable value knowledge base. He details how insurance companies are expanding their long term funding agreement business by tapping the European Medium Term Note market using special purpose vehicles.

We also present team coverage of the Association's annual conference. Randy Myers, a freelance journalist who has written several articles for us in the past, joined us in Washington DC for the entire conference and has contributed pieces on several of the sessions. Randy has done an excellent job of combining information from the different sessions to give a more complete picture of the changing landscape facing the industry. For example, while the declining percentage of assets represented by stable value funds creates a challenge for the stable value industry, the continued growth in defined contribution assets and the rapid growth of the number of people over 50 (the segment of the market that highly values the safety and predictability of stable value) can create significant domestic opportunities for the stable value industry.

Randy also covers budding opportunities for stable value around the world as the defined contribution model from the US spreads to Europe and Asia. In addition, several articles discuss the burgeoning fields of investment advice (both inside and outside the defined contribution market) and asset allocation modeling. This recent trend is poised to create both challenges and opportunities for our industry.

Wendy Cupps from PIMCO provides a review of the conference session on stable value mutual funds aimed at the rapidly growing IRA sector, a sector that, until recently, was closed to stable value. Dan Libby, AKA "the hardest working man in stable value", from IBM covers the action at the Performance Measurement update. The task force hopes that by "de-mystifying stable value to the professional investment community at large, [we can foster] the widespread use of stable value where appropriate and lend a greater sense of credibility to the asset class as a whole."

You will get all of this and our regular updates on stable value performance and a return of the Stable Times crossword puzzle. So sit back and enjoy the final Stable Times of the year, but heed the counsel of the great philosopher, Milton Berle: "if opportunity doesn't knock, build a door."

Read Next: SVIA Investment & Policy Survey Highlights