Stable value

A strategy for stability, liquidity, and income

We offer a stable value fund as an option for principal stability and attractive income opportunities.

Putnam Stable Value Fund pursues income and principal protection, and includes investments in guaranteed investment contracts (GICs).

The fund seeks to maintain the stability of a money market fund while offering returns similar to those of intermediate-term bonds.

Stable value funds are among the most commonly used funds in workplace retirement plans, offering a combination of diversification and liquidity.

Putnam has deep professional expertise in stable value strategies.


Advantages of stable value for capital preservation

Putnam's Steven Horner, CFA, discusses differences between stable value and money market funds, including the ability to pursue smoother performance with a range of investments in bonds and guaranteed investment contracts.

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Stable value funds have outperformed money market funds with less volatility

Stable value funds offer attractive capital preservation options in many plans because they seek stable performance, like a money market fund, while also investing in the higher return potential of intermediate-term bonds. As a result, the stable value category has historical returns that generally outpace money market funds.

In the chart, three-month U.S. T-bill returns are used to represent approximate money market returns. Note, SEC reforms since 2010 have required money market funds to reduce portfolio-weighted average maturity from 90 days to 60 days.

Stable Value performance

Learn about Putnam's stable value capabilities:

What is a traditional GIC?

A traditional guaranteed investment contract (GIC) is issued by an AA or A-rated insurance company or its affiliate. The buyer, or contractholder, pays the insurance company/issuer for the contract, which then invests those proceeds in its general account. The interest rate — known as the crediting rate in the stable value context — may be fixed or floating and is based on the assets available for investment by the issuer as well as that issuer's assessment of the risk associated with the plan(s) and the specific investment manager purchasing the contract. The "guaranteed" portion of the name indicates that principal and interest are guaranteed by the insurance company. In other words, the guarantee is as good as the credit risk of the issuer. Stable value funds using GICs typically develop a diversified exposure employing a number of issuers.

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What is a traditional GIC?

Stable Value GICs