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Stable Value in the Spotlight

Industry insiders have long recognized the worth of stable value products in diversifying investments. Why has the general public been slow to catch on? The press, like the investing public, has not focused on stable value. Instead, they have been enticed by the sexy ups and downs of the stock market. When the markets are consistently down, the press tends to focus on conservative investments like stable value.

In the past few months, however, stable value has enjoyed press attention. Stable value’s characteristics of stability and liquidity have made it more popular now that equity returns have decreased and volatility has increased. As plan participants have seen their balances drop, they have discovered stable value. The reason is obvious, steady but certain returns are far better than negative returns.

SVIA has been tracking stable value in the news and is proud to note the following articles among the positive press that stable value has received.

October 19, 2001, Wall Street Journal, “Bond and Other ‘Stodgy’ Funds Come Back.”

Besides the classification of Stable Value Funds as “stodgy,” this was a positive piece that compared several different types of financial instruments including: Bond Funds, Gold Funds, Closed-End Muni Bond Funds, and Fixed Annuities.

November 26, 2001, Pensions and Investments, “Participants Get Reacquainted with Old Friend – Stable Value.”

The story highlighted the $45 billion that has moved into stable value funds during the first three quarters of 2001.

January 6, 2002, New York Times, “Satisfying 2 Cravings: Yield and Safety.”

The article centered wholly on the stable value IRA community. This piece was unique in that it featured perspectives from real investors who are taking advantage of stable value.

February 1, 2002, Employee Benefit News, “Stock Volatility has Investors Seeking Happier Returns.”

Details the transfer of 401(k) contributions from equities into more conservative options, led by stable value.

SVIA will continue to work on delivering the stable value message. Stay tuned for updates and progress reports. Also, if you notice press reports dealing with stable value, please let us know.

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