Home > Library > Stable Times > Volume 5, Issue 4  

Update on Stable Value Manager Performance Comparison Measures and AIMR Discussion

The Association for Investment Management and Research (AIMR) has received and reviewed the SVIA Performance Measurement Task Force materials. These materials include the Task Force draft report as well as the Spring 2001 article in the Journal of Performance Measurement.  AIMR commended the amount of effort that the stable value industry has already put into this project.

According to our interpretation of a preliminary discussion with AIMR, AIMR will engage in a process to expand their Performance Presentation Standards (PPS) to include stable value and its unique issues. This process will include establishing a committee of volunteers from AIMR and the stable value industry.  Gina Mitchell has recruited SVIA member volunteers for this committee, which include:  John Axtell from Deutsche Asset Management, Paul Donahue from PRIMCO Capital Management, Bill Gardner from Dwight Asset Management, Vicky Paradis from JP Morgan Fleming Asset Management, and Klaus Shigley from John Hancock Financial Services.

The Implementation Committee will review all standards, including return calculations, composite creation, performance presentation, and disclosures, to identify and address the unique issues faced by stable value investments.  Based on AIMR's full schedule, they expect an early 2002 initial meeting of the Implementation Committee.

Based on the initial dialogue, we confirmed our understanding of a few critical, initial issues.

• First, stable value managers can be AIMR compliant today by following current PPS. Excluding traditional GICs from marked to market performance reporting is consistent with current AIMR standards. Alternatively, if firms calculate marked to market returns for GICs and disclose the methodology, that would be consistent with AIMR-PPS.
• Second, historical data collection is a challenge for most stable value managers. According to AIMR, that's the case for all asset classes, so stable value is not unique. When changes to the standards have been made historically, the changes are usually forward-looking so they can be accessible to all affected firms.

Read Next: Benna Says Employers Should Give Up 401(k) Gatekeeper Role...