Evaluating a Stable Value Investment Option Part I: Investment Vehicles

Stable value products can differ materially in their vehicle structures, termination provisions, portfolio composition, risk/return objective, fees, and administrative complexity, making apples-to-apples comparisons difficult. We believe that a two-pronged approach can remove some of the difficulties of making a direct comparison. The optimal solution lies in the intersection between the preferred vehicle structure and the investment strategy that aligns with a plan sponsor’s risk/return expectations.