JPMorgan Chase Teams with Barclays to Develop Stable Value Index
By Randy Myers While stable value funds emerged from the recent credit crisis relatively unscathed—none lost money and returns held well above those on money market funds—the crisis did have some fallout. Specifically, the market value of many stable value portfolios temporarily fell below book value during the crisis, prompting many wrap issuers to push […]
Investors Look to Stable Value
By Gina Mitchell, SVIA Defined contribution investors have taken all that the financial markets have thrown at them: an historic market upheaval and a prolonged recession in a low-interest rate environment with increased volatility. Unlike most investors, defined contribution investors have an investment that has withstood the market’s battering: stable value. And, according to SVIA’s […]
SVIA Stable Value Composite Introduced
By Gina Mitchell, SVIA A question that always comes up with any investment is, “What are the returns?” The answer to that question typically looks at past performance as the most important indicator. Most stable value funds have created a model to illustrate past performance for the stable value asset class. Many simulate stable value […]
401(k) System Passes “Trial by Fire”
By Randy Myers Not so long ago—the 1980s, to be precise—it was commonly argued that the self-directed, largely participant-funded 401(k) retirement system would implode if the financial markets experienced a severe crisis. Individual investors, the theory went, would not have the sophistication or the stomach to successfully negotiate a dramatic upheaval in the financial markets. […]
Prudential Strategist Argues for Moderation by Fed in Raising Interest Rates
By Randy Myers With the worst of the financial crisis apparently behind us, the Federal Reserve may try to push interest rates higher toward the end of this year, says Robert Tipp, chief investment strategist for Prudential Insurance Co.’s Prudential Fixed Income unit. But he wouldn’t advise it. A more prudent course, he argues, would […]
Stable Value Performs “Admirably and As Advertised” through Financial Crisis
By Randy Myers Stable value funds proved to be one of the few success stories during the financial crisis of 2008-09. At a time when most asset classes were tumbling, stable value funds continued to generate consistently positive returns for their investors. “Stable value performed admirably and as advertised,” SVIA President Gina Mitchell told industry […]
Risk Controls and the Coming Stable Value Surge
By Robert Whiteford, Bank of America “Take calculated risks. That is quite different from being rash.” –George Patton The quote shown above is an odd one considering the source, but I believe that it may be appropriate advice for several groups of participants in the stable value market–the wrap providers and the asset managers. All […]
Financial Reform Legislation Could Affect Some Stable Value Products
By Randy Myers The sweeping financial reform legislation being debated by Congress in April makes no specific mention of stable value funds, but could have an impact on the stable value industry nonetheless if the legislation becomes law. Both the Wall Street Reform and Consumer Protection Act passed by the House in December and the […]
Survey Confirms Trend Toward More Restrictive Wrap Contracts
By Randy Myers As the stable value industry has moved to tighten wrap contract terms for stable value funds over the past two years, it has gotten some pushback from an important constituency–employers who make the ultimate decision on whether to include stable value funds in their 401(k) plan investment lineups. “We’re getting some resistance […]