Capital Preservation Corner

Capital Preservation Corner

Stable value is an important asset class in the defined contribution marketplace as measured by participant usage and percent of total DC assets. Despite its importance, stable value funds are still not well understood by most advisors and their clients. Working with our partners, we have gathered a series of resources ranging from basic to advanced that will help demistify the stable value asset class. 

Let's start with a paper from Fi360! 

This paper is written specifically for ERISA fiduciary advisors and is intended to give a basic overview of different types of stable value products, how to evaluate their key features and what to look out for so a fiduciary advisor can feel confident making specific, due diligent recommendations about stable value products to their clients.

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Deconstructing Stable Value

Many plan sponsors and their advisors might not understand the differences between the many types of stable value funds, how to compare/review them, and how to determine what fund is best for their plan. This paper will help industry professionals understand the inner workings of stable value funds by deconstructing two of the most common structures; Multi-Wrap and Single-Wrap products, and to challenge a long standing, generally accepted research norm, that may surprise many investment analysts.

Content provided by: New York Life

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Viewing Stable Value with 2020 Vision

New roles for stable value emerge as the landscape evolves. Learn why stable value investments in defined contribution plans are increasing amid growing demand for retirement income solutions, the capital preservation feature of this investment vehicle can be a useful building block in retirement portfolios, and why the experts at T.RowePrice® believe stable value will be critical as the industry and regulatory landscape evolves.

Content provided by: T.RowePrice®

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Cash Flows and Put Queues

Plan sponsors often ask questions about cash flows and how they may impact stable value funds. The short answer is impacts may be positive or negative depending on market conditions. Download this paper to dig into the details of the impacts that occur when cash flows are positive versus negative. 

Content provided by: T.RowePrice®

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Understanding Stable Value

Stable value funds are a capital preservation option offered in over 179,000 retirement plans. While every stable value option has the goal of providing consistent positive returns with low volatility, they are available in various structures and “one size” cannot fit all plans. This paper offers a historical perspective on stable value funds, their basic structures and some key evaluation criteria. 

Content provided by: New York Life

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Moving Away From Guaranteed Investment Contracts

During the 1980s and 1990s, traditional guaranteed investment contracts (GICs) were heavily used in stable value funds and, at times, made up 100% of the assets of several such funds. More recently, however, GICs have not been as widely used. Learn why stable value managers are moving away from GICs and instead are finding better opportunities in cash bonds. 

Content provided by: T.RowePrice®

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Stable Value Fees & Performance

Going Down the Investment Rabbit Hole

Stable value investment products (also known as stable value funds), unlike mutual funds, do not have a single, consistent method of reporting fees and performance. That’s not necessarily a good or bad thing. The goal with this paper is to provide a backdrop of the reporting and disclosure requirements, present a context on how to navigate the comparison of fees and performance within the different structures, and provide advisors a better understanding of the evaluation of fees and performance within the stable value marketplace.

Content provided by: New York Life

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