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Editor's Corner

This issue of Stable Times is far different from those you've seen in the past. In order to get a sense of what's going on in the world, SVIA has asked leaders from the economic and political communities to offer their opinions on issues that shape the stable value industry. These articles were meant to stimulate a dialogue among the membership. So, as you begin reading, I offer you the opportunity to respond to what you see with "Letters to the Editor." Please send your comments to us via email press@stablevalue.org, or by mail to SVIA, 2121 K Street, NW, Suite 800, Washington, DC 20037. We look forward to publishing those in our next issue.

Also included in this issue, you will find economic forecasts from Alliance Capital, Bank of America, and JPMorgan Fleming. All three predict modestly rising interest rates over the next 6 to 12 months. If these forecasts are realized, it should create a rather hospitable environment for stable value funds versus other conservative investment options. Increasing interest rates would reduce or eliminate the return provided by market value bond funds while modestly increasing the return of stable value funds. While the increase in the return for stable value funds will generally lag the increase in interest rates (specifically money market fund yields), this lag should only modestly cut into the very sizable advantage (6% versus 2%) that the typical stable value fund currently offers versus money market funds.

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