In keeping with its tradition of developing stable value investment variations Bankers Trust Co. has started the first stable value mutual fund.
Eric Kirsch, managing director of Bankers Trust Global Investment Management's stable value investment team, said the fund is designed to provide an alternative to separate account or pooled fund GIC investments in 401(k) plans.
Stable value investments remain one of the most popular investment options in most 401(k) plans, he said.
"This is a major milestone for Bankers Trust and for the industry. . . . Until now, plan sponsors were not able to offer a mutual fund alternative to traditional GIC and synthetic options," Mr. Kirsch said.
The BT Preservation Plus Fund offers an stable value option with the advantages of a commingled fund with the convenience of a mutual fund, he said.
Mutual funds are regulated by the Securities and Exchange Commission and subject to its stiff disclosure regulations, said Mr. Kirsch. That means portfolio holdings and investments will be disclosed on a timely basis, along with other investment, credit and performance data. Plan participants will have access to daily pricing information through net asset value.
The fund will invest in synthetic GICs consisting of wrapped actively managed fixed-income securities. It will not invest in traditional insurance company GICs.
Mr. Kirsch said the fund can be offered to defined contribution participants on the same basis as other mutual funds.