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 […]
Wrap Issuer Makes Case for Tighter Stable Value Investment Guidelines
By Randy Myers The push by wrap issuers for more conservative stable value investment guidelines may have heightened the tension between issuers and fund managers, but it doesn’t appear to be threatening their symbiotic relationship. In a panel discussion at the SVIA’s 2010 Spring Seminar, for example, one leading fund manager conceded that his company […]
New Players Join Stable Value Wrap Community
By Randy Myers Wrap capacity in the stable value industry finally appears to be expanding. Wrap contracts guarantee book value withdrawal rights for investors in stable value products. When the credit markets froze in 2008, the banks and insurers that issue wrap contracts began to reassess the risks embedded in that business. In many cases, […]
401(k) Industry Moves Toward Benchmarking
By Randy Myers For years, smart companies have benchmarked their performance against their peers to identify opportunities for improvement in a variety of areas, from how efficiently they manage their inventory to how quickly they collect on their accounts receivable. One area they have often overlooked, especially if they were not a very large employer, […]
Stable Value Funds Seen Coping if Interest Rates Start to Rise
By Randy Myers The long downward trend in interest rates since the early 1980s has been beneficial to the stable value industry. Now, many economists believe that trend is in jeopardy, prompting questions about how the industry will respond. Declining rate environments favor stable value funds because their crediting rates—the actual earning rates posted to […]
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 […]
