Stable value, insurance company fixed account and other similar products are often viewed as comparable to a money market investment option – but there are several important differences that need to be taken into consideration when evaluating such products. Mesirow Financial's Investment Strategies team has been at the forefront of due diligence on such products and presents detailed, easily understood information for plan sponsors and advisors.
The independent due diligence experts at Mesirow Financial provide a detailed due diligence report on various stable value products used widely in retirement plans. The Mesirow Financial POLICE Report®, which is updated on a quarterly basis, provides details about the stable value product structure, portfolio statistics and monitoring across six different categories, all presented in an easy-to-understand format.
Through a quarterly questionnaire submitted to stable value product providers, Mesirow Financial collects and evaluates the unique characteristics of the products, the benefits and limitations such as:
- Market-to-book ratio of the accounts
- Effective duration and average credit quality of the underlying portfolio
- Guarantees by one or more insurance companies (wrap providers) included in the product and the credit rating of the wrap providers
- Liquidity restrictions on how and/or when an individual or plan can exit the investment option