Top-Performing Stable Value Strategy Incorporated into Vantagepoint Target-Date Funds
Vantagepoint Milestone Funds add Vantagepoint PLUS Fund to investment mix
Washington, D.C., Oct. 25, 2018 (GLOBE NEWSWIRE) -- The fixed income allocation of the Vantagepoint Milestone Funds (Milestone Funds) was recently expanded to include investment in the stable value Vantagepoint PLUS Fund (PLUS Fund).
The Milestone Funds, a family of diversified target-date funds, are designed to meet investors’ needs through retirement. The funds gradually shift to a more conservative asset allocation as the designated retirement date approaches. This is intended to reduce investment risk as the investor’s time horizon shifts.
As the Milestone Funds shift over time, capital preservation and the consistent return of the fixed income portion of the allocation are of critical importance, especially as investors approach retirement. By adding the PLUS Fund to this investment mix, ICMA-RC seeks to enhance performance in the funds, particularly as interest rates continue to rise, while minimizing risk.
The PLUS Fund is a stable value fund. It invests primarily in traditional guaranteed investment contracts (GICs), separate account GICs and synthetic GICs with an objective to offer a competitive level of income consistent with providing capital preservation and meeting liquidity needs. The yield from a stable value fund, or crediting rate, fluctuates with changes in interest rates. The PLUS Fund will generally follow interest rate trends but on a lagged basis.
Incorporating the PLUS Fund offers two benefits to investors in the Milestone Funds: a track record of above-average stable value fund performance and the historic ability to generally outperform bonds when interest rates rise. The PLUS Fund is one of the industry’s top-performing stable value funds*, outperforming its benchmark over all periods, as the chart below shows.
| Performance for the Period Ended September 30, 2018 | ||||||
| Fund/Benchmark Name | Qtr (Annualized) |
YTD |
1-Yr | 3-Yr | 5-Yr | 10-Yr |
| Vantagepoint PLUS Fund1 | 2.43% | 2.40% | 2.38% | 2.25% | 2.25% | 2.83% |
| ICE BofAML US 3-Mo. T-Bill Index2 (Annualized) | 1.98% | 1.74% | 1.59% | 0.84% | 0.52% | 0.34% |
1Performance shown is for the VT III Vantagepoint PLUS Fund in which the Milestone Funds invest. The VT III Vantagepoint PLUS Fund is a master fund that is not available for direct investment. Eligible investors can purchase the Vantagepoint PLUS Fund R Class or S Class which are feeder funds to the VT III Vantagepoint PLUS Fund and include additional fees which will result in lower performance for direct investors.
2The Intercontinental Exchange Bank of America Merrill Lynch ("ICE BofAML") US 3-Month Treasury Bill Index is comprised of a single U.S. Treasury Bill issue purchased at the beginning of each month and held for a full month, at which time that issue is sold and rolled into a newly selected issue. The issue selected each month is that having a maturity date closest to, but not beyond, 90 days from the rebalance date.
In addition, as a stable value fund, the PLUS Fund seeks to provide investors with some protection in a rising-rate market. “Although the bonds that underlie these investments may fluctuate in value, investors are insulated from immediate potential for capital losses due to rising rates. And, as rates rise gradually, the income that stable value funds generate are also expected to increase. These funds offer capital preservation in rising-rate markets, along with income, contrary to most bond fund values as bond prices go down with higher interest rates,” explains PLUS Fund portfolio manager Karen Chong-Wulff.
Adding the PLUS Fund to the Milestone Funds’ asset mix will provide retirement investors in the funds with additional stability and return potential, enhancing their ability to reach their long-term goals. “We believe adding the PLUS Fund as an underlying fund to the Milestone Funds will benefit participants by increasing asset diversification and reducing volatility in times of rising interest rates,” says ICMA-RC Senior Vice President and Chief Investment Officer Wayne Wicker.
For institutions seeking more information on the Vantagepoint Funds, please visit www.vantagepointfunds.org.
About Vantagepoint Funds
With assets under management totaling approximately $29 billion (as of September 30, 2018), Vantagepoint Funds are collective investment trust funds (CITs) established and maintained by VantageTrust Company, LLC (VTC), a wholly owned subsidiary of ICMA-RC, a New Hampshire non-depository trust company, and the sole trustee of these CITs. Eligible retirement plans may invest in the Vantagepoint Funds, which are funds of VantageTrust. ICMA-RC provides investment advisory and management services to VTC with respect to the Vantagepoint Funds. Certain Vantagepoint Funds invest in other funds managed and administered by ICMA-RC. ICMA-RC receives asset-based fees from such underlying funds in addition to the asset-based fees it receives from the Vantagepoint Funds. Please see ICMA-RC’s Form ADV, available at www.adviserinfo.sec.gov, for more information.
The Vantagepoint Milestone Funds are not a complete solution for all of your retirement savings needs. An investment in a Milestone Fund includes the risk of loss, including near, at or after the target date of the Fund. There is no guarantee that the Fund will provide adequate income at and through an investor's retirement.
Before investing, please read the Funds' offering and disclosure documents carefully for a complete summary of all fees, expenses, investment objectives and strategies, and risks. Investing involves risk, including possible loss of the amount invested. Investors should carefully consider the information contained in the Funds’ offering and disclosure documents before investing. Past performance is no guarantee of future results.
About ICMA-RC
Founded in 1972, ICMA-RC is a non-profit, independent financial services corporation with approximately $55 billion in assets under management and administration (as of September 30, 2018), focused on providing retirement plans and related services for over a million public sector participant accounts. ICMA-RC’s mission is to help public sector employees build retirement security. The organization’s mission is delivered through its RealizeRetirement® approach in which ICMA-RC representatives actively engage participants in their retirement programs, help them build their asset base, and help them realize their retirement goals through a comprehensive retirement planning strategy. For more information, visit www.icmarc.org or follow ICMA-RC on Facebook, LinkedIn, and Twitter.
*The VT III Vantagepoint PLUS Fund is a top performing fund when compared against other stable value funds included in the Hueler Analytics Stable Value Pooled Fund Comparative Universe (Hueler Universe). The Hueler Universe represents the performance returns of actual stable value pooled funds, and its Index is the stable value industry benchmark used by many institutional investors, consultants, advisors and plan sponsors for monitoring stable value pooled funds. ICMA-RC does not independently verify Hueler Universe data. Gross returns used in the Hueler Universe do not include plan administration fees, adviser expenses, or other stable value fund costs – actual performance would be commensurately lower.
Aprile Pritchet ICMA-RC 2029628067 apritchet@icmarc.org
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
