As Keith McDonagh noted in his interview above, the flight to certainty triggered by extreme volatility earlier this year was accompanied by a surge in demand for stable value solutions. As part of its commitment to meet the long-term needs of retirement plan participants, MassMutual Investments is a leader in stable value funds and wraps. Here’s a quick look at how investors can benefit from stable value. 

• Stable value is the conservative fixed income option offered in a DC plan line up designed to preserve principal for the participant saving for retirement. These solutions are purpose-built to weather volatility and are comprised of a portfolio of fixed income investments managed by an investment manager or insurance company.
• An insurance company provides a stable value wrap on the portfolio of fixed income assets. This wrap is an insurance guarantee to protect the principal and allow participants to transact in and out of that account at book value.  The stable value wrap also provides a smoothing of the crediting rates, so the performance of the fixed income assets passes through to the participants over time. The goals are a stable return and asset preservation. 
• From the plan sponsor’s perspective, the assets are always available at market value should a sponsor choose to move to another provider. If market value is below book value, any book value payout comes over a period of time.
• MassMutual is a leading provider of stable value solutions for both retirement plans and asset managers. “On an investment only basis, we offer stable value solutions across general account, separate account and other structures,” says McDonagh. “We also provide solutions for asset managers who offer stable value funds, with insurers providing the wraps. In those cases, the asset manager selects the wrap provider.”
• It’s a competitive landscape where MassMutual ranks among the largest providers based “upon our credit quality, our expertise and knowledge in the space, and our servicing of these portfolios” says McDonagh.

Stable value has been strong growth market for MassMutual and is a continued focus moving forward. MassMutual is a 170-year-old company that has been through every economic and market scenario over that timeframe. “We’re one of the highest rated and most financially strong insurers,” says McDonagh. “Our fixed income DNA has evolved over multiple market cycles, and we have deep expertise in the stable value space.”

Interested in customizable stable value? Learn more.