Stable Value

Stable Value—Appropriate Investments

Stable value requires necessary attention to find appropriate investment ideas.

Successful stable value investing, as we like to discuss with our clients, stems from strong portfolio management with the underlying fixed income securities. While stable value is a principal‑preservation strategy, it is also generally a yield‑biased fixed income strategy. As such, most stable value strategies underweight allocations to U.S. Treasuries and agency‑backed debt and overweight allocations to spread sectors in order to build yield into the underlying fixed income portfolios and strategies. Like other fixed income strategies, spread sectors, such as corporate and securitized bonds, provide solid risk‑adjusted investment opportunities that offer attractive total return potential (Figure 1).

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Important Information

Money market and stable value funds have different risks. It is important that you carefully review the legal documents for each type of vehicle prior to investment to determine if it is appropriate for you.

This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.

The views contained herein are as of April 2020 and are subject to change without notice; these views may differ from those of other T. Rowe Price associates.

This information is not intended to reflect a current or past recommendation, investment advice of any kind, or a solicitation of an offer to buy or sell any securities or investment services. The opinions and commentary provided do not take into account the investment objectives or financial situation of any particular investor or class of investor. Investors will need to consider their own circumstances before making an investment decision.

Information contained herein is based upon sources we consider to be reliable; we do not, however, guarantee its accuracy.

Past performance is not a reliable indicator of future performance. All investments are subject to market risk, including the possible loss of principal. All charts and tables are shown for illustrative purposes only.

T. Rowe Price Investment Services, Inc.

© 2020 T. Rowe Price. All rights reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the Bighorn Sheep design are, collectively and/or apart, trademarks of T. Rowe Price Group, Inc.

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