Stable Value steps into the spotlight

Executive summary

Recent research and analysis conducted in partnership between Transamerica and Mesirow uncovered the value of stable value in several key areas. As an asset class, stable value exhibits numerous attractive characteristics:

• A return profile similar to short- to intermediate-term bonds
• A risk profile similar to cash equivalent assets
• The benefit of principal protection
• A superior risk-adjusted return profile, relative to fixed-income investments

These benefits, on average, are persistent across a full market cycle and an extended time horizon. Yet, the unique nature of stable value seems to invite unfair comparisons to cash equivalents or other fixed-income investments at different stages of the interest rate cycle.