Stable value

A strategy for stability and income

Retirement plan participants often turn to stable value funds to pursue returns with fewer ups and downs.

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, including 25 years of experience and over $7 billion in assets.

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What is a traditional GIC?

A traditional guaranteed investment contract (GIC) is an investment contract issued by a 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