With many investors concerned about capital preservation, more focus is being paid to stable value, which is one of the leading investments in that category. Research commissioned by MetLife, a stable value provider itself, shows that most plans are not considering making changes to their stable value lineup in the next 12 months.
According to the Stable Value Investment Association, more than half of all DC plans offer stable value, encompassing $540 billion and ranging from 17%-37% of assets. That asset range differs from the Callan Index, which indicates that 12.4% of assets are in stable value.
Though awareness and understanding on the part of plan sponsors have risen — as has the use of an advisor — according to the MetLife study, many plans and their advisors are not as knowledgeable about stable value as they are about other investments. This leads to the potential for both problems and opportunities. Simply relying on a record keeper’s proprietary offering or the one recommended by that record keeper or TPA may not be in the best interest of participants — just as proprietary funds or a limited lineup of other types or classes of investments can lead to poor results, and may not be deemed a prudent process.
Click here for a summary of the Metlife study and here for the study itself.
