Capital preservation options should seek to provide certain benefits.
As market volatility persists and participants prepare for retirement, the need for capital preservation and stable income streams may be growing. In light of this, plan sponsors are seeking three important characteristics from their plan's capital preservation option.
For Illustrative Purposes Only
We seek to provide these three characteristics as part of a defined contribution plan’s capital preservation option. Money market funds (which generally consist of short term debt instruments and also seek to provide a stable net asset value (NAV) remain challenged by historically low yields1 and regulatory uncertainty. Stable value funds seek to provide steady income and a stable NAV using underlying portfolios and insurance wrappers. We believe that a stable value option supported by the following key capabilities can assist plan sponsors in helping to meet their objectives:
Multi-dimensional Risk Management refers to the distinct risk management processes from Goldman Sachs and GSAM that are used in our managing GSAM's stable value portfolios. Deep Wrap Contract Experience refers to the 50 years of collective experience amongst the members of the GSAM Stable Value LLC team who review wrap contracts. Advanced Portfolio Construction refers to the multi-dimensional approach constructing underlying fixed income and amortizing portfolios for stable value funds. Innovative Approach to Benchmarking refers to GSAM Stable Value LLC's patented approach to benchmarking stable value funds.
Click here to learn more about GSAM's approach to stable value.
1Source: iMoneyNet, Inc as of September 30, 2013. The iMoneyNet Money Market Funds Index is the all-taxable money fund report average, a product of iMoneyNet, Inc., and is presented net of certain fees and expenses.
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