In this article, we’ll go over the Stable Asset Management team’s approach and why you should choose them over lower yielding vehicles. We’ll also take a closer look at their latest developments and the team’s manager, Tony Luna. You’ll also learn about other investment options that might work well for your portfolio. Investing in stable asset management can be a good option if you want to maximize your returns and reduce your risks.
Stable value funds
While bond funds are often battered by erratic stock markets, stable value funds tend to avoid such problems. As interest rates increase, stable value funds are often accompanied by a slower rise in their yields. However, there are certain restrictions and drawbacks to stable value funds. For instance, investors can’t move their money from a stable value fund to a money market fund. Additionally, dumping a stable value fund can be complicated, and it can take years to remove all of its assets.
One of the challenges of providing stable value funds is that they must be backed by a recordkeeper who can prevent transfers. Participants may be forced to wait 90 days after redemption before they can purchase higher-yielding securities. Moreover, investors may not be able to take advantage of a put period if they are transferring money from a stable value fund to an equity fund. But, by following the rules outlined by the recordkeeper, the market value of a stable value fund remains the same for a year.
Stable asset management with bond funds can offer a safe haven for your retirement savings. These products are managed according to a specific set of rules that prevent yield-chasing and arbitrage. For example, a stable-value fund will have a ninety-day rule for an investor to invest in a stock fund before being withdrawn. This rule is a key feature of this type of plan. It provides investors with the protection that they need during a market downturn.
Stable-value funds yield more than cash. A typical stable-value fund yielded 2% in 2013 and 1% in 2014, according to Morningstar Direct. By contrast, the Morningstar Taxable Money Market Index yields close to zero. So what is the solution? If you can’t wait for the market to fall, try a stable-value fund. That way, you’ll have some downside protection.
Alternatives to lower-yielding vehicles
There are several alternatives to lower-yielding vehicles for investors looking for more stable asset management. For example, you can consider hybrid investment vehicles, which are SMA accounts with fund components. These investments offer stability and yield while also simplifying tax reporting and reducing concentration risks. These funds typically use a no-fee fund component as part of their investment strategy. Choosing the right investment option depends on your needs and circumstances
Tony Luna, head of the team
Anthony Luna is a portfolio manager and the head of the Stable Asset Management team within the Fixed Income Division of T. Rowe Price. He specializes in the management of synthetic investment contract and stable value portfolios. He co-manages the Stable Value Common Trust Fund and is a member of the Low Duration Investment Committee. He holds an M.S. in finance from Towson University and a B.S. in business administration from Towson University. He has also earned the Chartered Financial Analyst (CFA) designation.
T. Rowe Price’s Luna stablecoin has gained notoriety for its high volatility. In March, investors lost over $1 billion on the coin, resulting in a massive fall in price. While retail investors are left holding the bag, institutional investors are in trouble. Recently, Three Arrows Capital confirmed rumors of financial issues with Luna. The firm invested over $200 million in Luna tokens in May and February, and was caught off guard by the Terra-Luna situation.