ow that we are officially in a recession, it was bound to happen. Stable value is back as a high profile offering, not just for 401(k) and other defined contribution plans but for IRAs as well. Deutsche Asset Management
is making a full court press effort to get the word out about its PreservationPlus Income Fund
At a press conference in New York City yesterday, the firm's team of Eric Kirsch
, managing director and head of North American Fixed Income, John Axtell
, managing director and head of stable value, and Donna Marsella
, director and investment specialist, discussed what they perceive to be stable value's advantages for participants.
"We offer less volatility than a bond fund, and we can offer more returns over the long term than, say, a monkey market," stated Kirsch. And the executives believe that current economic environment presents stable value managers with a number of opportunities.
Currently, Deutsche is targeting broker/dealers with its educational program. "We are getting written materials out to advisors," he contended. "We are listed with Schwab
. That helps because advisors are calling us. And The Stable Value Investment Association
has been trying to raise the profile of stable value investments. They have been getting the word out." Kirsch is on the board of the association.
Given the increasing importance of the broker/dealer community to the 401(k) as well as retail retirement business, this could no doubt be the smart move in terms of direction.
"There has been an increased demand among participants," the executive added. He also reported that participants frequently look for a rollover product in which they can place 401(k) assets. The PreservationPlus fund, now that is on the Schwab platform, may provide such an opportunity. The fund is only available to 401(k) participants and IRA holders.
"As participants get closer to retirement, particularly that large generation of baby boomers, they need a more conservative mix for their plans," Marsella added.
Axtell reported that the fixed income management philosophy is "to focus on spread sectors, de-emphasize duration management, high quality, diversified portfolio, and a search to maximize income."
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