PLANADVISER - November/December 2018 - 13

trendspotting
Stable
Value
And Rising
Interest
Rates
The key is to focus
on the long term
BECAUSE stable value funds invest in
intermediate-term bonds, and money
market funds favor short-term bonds,
the recent rise in short-term interest
rates has been creating some challenges
for stable value.
Experts say, however, this condition
is cyclical and that stable value
funds still hold great appeal for retirement
plan sponsors and participants.
" The interest rate environment
over the past 12 months has been very
challenging for stable value funds, "
says Jonathan Kreider, vice president
of investment products at Great-West
Financial. " One head wind has been
the general flattening of the yield
curve, which is cyclical. "
Another head wind, according to
Kreider, is " more structural. " He says
the long-running bull market in equities
has left investors, in general, less
focused on defensive funds and capital
preservation.
" All bull markets come to an end, "
he advises.
John Faustino, chief product and
strategy officer at Fi360, agrees that
while the increase in short-term interest
rates can make stable value funds " a
little bit less attractive " than money
market funds, in his experience this is
usually a short-lived phenomenon.
" It's true
that rising short-term
interest rates could create yields in
money market funds that exceed those
of stable value funds, " Faustino says.
" Over the past 50 to 60 years, there
have been 10 times when the yield
curve inverted, whereby three-month
Treasury yields, more similar to money
market durations, have been higher
than five-year Treasurys, more similar
TALKING POINT
More Alternatives
Fifty-three percent of advisers expect
to increase their allocations to alternatives
by the end of this year.
Source: BNY Mellon / Pershing, " The Alternative Advantage "
Art by Linda Liu
planadviser.com November-December 2018 | 13
to stable value durations. "
What is important to note, he says,
is that when those inversions did
occur, they persisted for only five to six
months. -Lee Barney

http://www.planadviserdigital.com/planadviser/november_december_2018/TrackLink.action?pageName=13&exitLink=http%3A%2F%2Fplanadviser.com

PLANADVISER - November/December 2018

Table of Contents for the Digital Edition of PLANADVISER - November/December 2018

Weathering Audits
Protection for Your Practice
The Case for Roths
SEC on Rollovers
ERISA Section 409(b)
403(b) Litigation Update
PLANADVISER - November/December 2018 - C1
PLANADVISER - November/December 2018 - FC1
PLANADVISER - November/December 2018 - FC2
PLANADVISER - November/December 2018 - C2
PLANADVISER - November/December 2018 - 1
PLANADVISER - November/December 2018 - 2
PLANADVISER - November/December 2018 - 3
PLANADVISER - November/December 2018 - 4
PLANADVISER - November/December 2018 - 5
PLANADVISER - November/December 2018 - 6
PLANADVISER - November/December 2018 - 7
PLANADVISER - November/December 2018 - 8
PLANADVISER - November/December 2018 - 9
PLANADVISER - November/December 2018 - 10
PLANADVISER - November/December 2018 - 11
PLANADVISER - November/December 2018 - 12
PLANADVISER - November/December 2018 - 13
PLANADVISER - November/December 2018 - 14
PLANADVISER - November/December 2018 - 15
PLANADVISER - November/December 2018 - 16
PLANADVISER - November/December 2018 - 17
PLANADVISER - November/December 2018 - 18
PLANADVISER - November/December 2018 - 19
PLANADVISER - November/December 2018 - 20
PLANADVISER - November/December 2018 - 21
PLANADVISER - November/December 2018 - 22
PLANADVISER - November/December 2018 - 23
PLANADVISER - November/December 2018 - 24
PLANADVISER - November/December 2018 - 25
PLANADVISER - November/December 2018 - 26
PLANADVISER - November/December 2018 - 27
PLANADVISER - November/December 2018 - 28
PLANADVISER - November/December 2018 - 29
PLANADVISER - November/December 2018 - 30
PLANADVISER - November/December 2018 - 31
PLANADVISER - November/December 2018 - 32
PLANADVISER - November/December 2018 - 33
PLANADVISER - November/December 2018 - 34
PLANADVISER - November/December 2018 - 35
PLANADVISER - November/December 2018 - 36
PLANADVISER - November/December 2018 - 37
PLANADVISER - November/December 2018 - Weathering Audits
PLANADVISER - November/December 2018 - 39
PLANADVISER - November/December 2018 - 40
PLANADVISER - November/December 2018 - 41
PLANADVISER - November/December 2018 - Protection for Your Practice
PLANADVISER - November/December 2018 - 43
PLANADVISER - November/December 2018 - The Case for Roths
PLANADVISER - November/December 2018 - 45
PLANADVISER - November/December 2018 - SEC on Rollovers
PLANADVISER - November/December 2018 - ERISA Section 409(b)
PLANADVISER - November/December 2018 - 403(b) Litigation Update
PLANADVISER - November/December 2018 - C3
PLANADVISER - November/December 2018 - C4
https://www.planadviserdigital.com/planadviser/winter_2023
https://www.planadviserdigital.com/planadviser/fall_2023
https://www.planadviserdigital.com/planadviser/summer_2023
https://www.planadviserdigital.com/planadviser/industryleader_2023
https://www.planadviserdigital.com/planadviser/spring_2023
https://www.planadviserdigital.com/planadviser/november_december_2022
https://www.planadviserdigital.com/planadviser/september_october_2022
https://www.planadviserdigital.com/planadviser/july_august_2022
https://www.planadviserdigital.com/planadviser/may_june_2022
https://www.planadviserdigital.com/planadviser/industry_leader_awards_2022
https://www.planadviserdigital.com/planadviser/march_april_2022
https://www.planadviserdigital.com/planadviser/january_february_2022
https://www.planadviserdigital.com/planadviser/november_december_2021
https://www.planadviserdigital.com/planadviser/september_october_2021
https://www.planadviserdigital.com/planadviser/july_august_2021
https://www.planadviserdigital.com/planadviser/may_june_2021
https://www.planadviserdigital.com/planadviser/march_april_2021
https://www.planadviserdigital.com/planadviser/january_february_2021
https://www.planadviserdigital.com/planadviser/november_december_2020
https://www.planadviserdigital.com/planadviser/september_october_2020
https://www.planadviserdigital.com/planadviser/july_august_2020
https://www.planadviserdigital.com/planadviser/may_june_2020
https://www.planadviserdigital.com/planadviser/march_april_2020
https://www.planadviserdigital.com/planadviser/january_february_2020
https://www.planadviserdigital.com/planadviser/november_december_2019
https://www.planadviserdigital.com/planadviser/september_october_2019
https://www.planadviserdigital.com/planadviser/july_august_2019
https://www.planadviserdigital.com/planadviser/may_june_2019
https://www.planadviserdigital.com/planadviser/march_april_2019
https://www.planadviserdigital.com/planadviser/january_february_2019
https://www.planadviserdigital.com/planadviser/november_december_2018
https://www.planadviserdigital.com/planadviser/september_october_2018
https://www.planadviserdigital.com/planadviser/july_august_2018
https://www.planadviserdigital.com/planadviser/may_june_2018
https://www.planadviserdigital.com/planadviser/march_april_2018
https://www.planadviserdigital.com/planadviser/january_february_2018
https://www.planadviserdigital.com/planadviser/november_december_2017
https://www.planadviserdigital.com/planadviser/september_october_2017
https://www.planadviserdigital.com/planadviser/july_august_2017
https://www.nxtbookmedia.com