In a first for both companies, Prudential Defined Contribution Services has started offering its 401(k) clients the option of investing in Norwest Bank's stable value fund, the first non-Prudential investment option offered by Pru-DC.
Minneapolis-based Norwest, a leading provider of stable value products for the 401(k) marketplace, has had a compounded 8% return over the past five years and has been the top performing fund in the Hueler Analytics database of pooled GIC managers for the five years ended June 30.
Bob Lee, Pru-DC vice president, said Pru was seeking to diversify its GIC offerings to its client base. GIC investors had been limited to Prudential Insurance Co. GICs. The Norwest fund is the first outside investment product and will be offered with Pru-DC's seven institutional mutual funds and Prudential's proprietary separate account products, all of which are managed by Prudential.
Mr. Lee said Prudential evaluated 28 stable value product providers before settling on Norwest.
Prudential is also the first non-Norwest defined contribution provider to offer a Norwest managed investment for 401(k)s.
The $1.46 billion Norwest fund has a mix of 27.4% traditional GICs, 55% synthetic GICs, 13.1% money market fund instruments and 4.5% marketable securities.