Voya enhances Stable Value solution suite with new Capital Preservation Fund

Rhea-AI Summary

Voya Financial, Inc. (NYSE: VOYA) has launched the Voya Capital Preservation Fund, a new Stable Value solution for defined contribution plan participants. This bank Collective Investment Trust (CIT) aims to protect principal investment while offering competitive yield, low return volatility, and daily liquidity. The Fund is currently invested in a group annuity contract issued by Voya Retirement Insurance and Annuity Company (VRIAC), managed by Voya Investment Management.

Stable Value investments have gained popularity due to their ability to protect against financial losses in rising interest rate environments. Total Stable Value investments reached approximately $882 billion in 2023. Voya remains a leader in these solutions with about $40 billion in total Stable Value assets under management and administration.

Positive

• Launch of new Voya Capital Preservation Fund, expanding Stable Value solution suite
• Fund offers principal protection, competitive yield, and daily liquidity for defined contribution plan participants
• Voya has approximately $40 billion in total Stable Value assets under management and administration
• Stable Value investments reached $882 billion in 2023, indicating strong market demand

Negative

• None.

Insights

Financial Analyst

Voya Financial's launch of the Voya Capital Preservation Fund marks a strategic move in the Stable Value solutions market. This new offering comes at an opportune time, capitalizing on the current high-interest rate environment. The Fund's focus on principal protection, competitive yield and daily liquidity addresses key concerns of defined contribution plan participants, particularly in 401(k) and 457(b) plans.

The Fund's structure as a bank Collective Investment Trust (CIT) is noteworthy. CITs often have lower fees compared to mutual funds, potentially translating to better returns for participants. The short duration feature is particularly valuable in the current market context, offering protection against market declines while maintaining flexibility with a 12-month put for most full plan withdrawals.

Voya's position as a leader in Stable Value solutions, with $40 billion in assets under management, lends credibility to this new offering. The integration of Voya Investment Management for asset management showcases vertical integration, potentially leading to operational efficiencies.

However, investors should note that while Stable Value funds offer stability, they may underperform in rapidly rising markets. The Fund's success will largely depend on Voya's ability to navigate interest rate fluctuations and maintain competitive yields without compromising on capital preservation.

Market Research Analyst

The launch of Voya's Capital Preservation Fund aligns with broader market trends in the Stable Value sector. With total Stable Value investments reaching $882 billion in 2023, there's clear demand for these products. This growth is largely driven by the current high-interest rate environment and investors seeking protection from market volatility.

Voya's timing is strategic, capitalizing on a 40% year-over-year increase in Stable Value assets. This surge indicates a shift in investor sentiment towards more conservative options, likely influenced by economic uncertainties and market fluctuations.

The Fund's focus on short duration is particularly relevant in the current market. As interest rates potentially stabilize or decrease, this feature could provide a competitive edge by allowing quicker adjustments to yield changes compared to longer-duration funds.

However, the Stable Value market is highly competitive. Voya will need to consistently deliver competitive yields to maintain and grow market share. The inclusion of unique sectors like private placements in the underlying portfolio is an interesting differentiator, potentially offering yield enhancement without compromising credit quality.

Overall, this launch strengthens Voya's position in a growing market segment, but its long-term success will depend on performance relative to peers and adaptability to changing market conditions.

WINDSOR, Conn.--(BUSINESS WIRE)-- Voya Financial, Inc. (NYSE: VOYA), announced today the launch of a new Stable Value solution, the Voya Capital Preservation Fund (the “Fund”), a bank collective investment trust with Great Gray Trust Company, LLC, as trustee and fiduciary authority.*

As the latest addition to Voya’s suite of Stable Value investment solutions, the Fund is now available to Voya’s defined contribution plan participants in qualified 401(a), 401(k) and governmental 457(b) plans who are currently eligible to use Stable Value as an investment option. The Fund is a bank Collective Investment Trust (CIT) with a focus on providing participants in these eligible plans with protection for their principal investment. In addition, the Fund seeks to offer those participants a competitive yield, low return volatility (in comparison to its benchmarks) and daily liquidity.

In addition, the Fund offers a short duration to help protect such participants from market declines and to allow most full plan withdrawals with a 12-month put as the termination provision.** This is aligned to Voya’s overall Stable Value philosophy, offering employees the ability to access their funds at book value where, when and how they need it.

“Stable Value funds continue to play a critical role in defined contribution plans and have remained a priority for many individuals in recent years given increasing interest rates,” said Doug Murray, senior vice president, Wealth Solutions Distribution and Client Engagement, Voya Financial. “At Voya, we’ve long recognized this priority and have leveraged our scale and expertise to provide flexible solutions that support our clients’ evolving needs. The introduction of the Voya Capital Preservation Fund does just that by providing greater support for individuals looking for a more stable opportunity to generate competitively positive returns as they navigate potential market stress.”

Stable Value investments have historically been designed to protect individuals from financial losses that can occur during a rising interest rate environment, resulting in continued interest and the growth of these solutions. As a result, according to industry data, total Stable Value investments reached approximately $882 billion in 2023.¹

“The launch of the Voya Capital Preservation Fund comes at the right time to take advantage of the current higher interest rate environment,” added Chris Solimine, senior vice president and head of Investment Solutions at Voya Financial. “Our focus at Voya has remained on providing a multi-product Stable Value portfolio that offers stability and flexibility to meet the unique needs of participants across several unique institutional plan sizes. We’re excited to introduce the solution to meet a demand from plan sponsors and intermediaries — and to also offer more choice during a time when many individuals need it most.”

The Fund is currently invested in a group annuity contract issued by Voya Retirement Insurance and Annuity Company (VRIAC). The group annuity contract, also called the Stabilizer℠ contract, is a separate, actively managed account that invests in a range of fixed income instruments through an active management philosophy. The underlying fixed income portfolio adds unique sectors, such as private placements, to help increase yield, while not decreasing credit quality or increasing duration for participants. Voya’s own asset manager, Voya Investment Management, has been hired by VRIAC to manage the assets of the separate account.

For more than 40 years in the market, Voya’s Stable Value solutions have offered a low-risk investment that focuses on capital preservation and liquidity, while seeking to provide steady, positive returns for individuals. Voya remains a leader² in these solutions with approximately $40 billion in total Stable Value separate account and synthetic account assets under management and administration.³ For more information, visit voyastablevalue.com.

As an industry leader focused on the delivery of benefits, savings and investment solutions to and through the workplace, Voya is committed to delivering on its mission to make a secure financial future possible for all — one person, one family, one institution at a time.

* The Voya Capital Preservation Fund (“Fund”) is a bank collective investment fund; it is not a mutual fund. Great Gray Trust Company, LLC, serves as the Trustee of the Fund and maintains ultimate fiduciary authority over the management of, and investments made in, the Fund. The Fund and its units are exempt from registration under the Investment Company Act of 1940 and the Securities Act of 1933, respectively.

** Provided the full plan withdrawal is less than 20% of the Fund’s value, it can be fulfilled at book value upon 12 months’ notice; otherwise, an 18-month notice is required. The plan should read the participation agreement for a complete description of terms, restrictions and conditions on Fund investments and withdrawals.

1. “Stable Value at a Glance,” Stable Value Investment Association (June 18, 2024).
2. Valerian Capital Group Synthetic GIC/BVW Market Landscape Report as of Dec. 31, 2023.
3. Internal Voya statistics as of March 31, 2024.

Investments in the Fund are not bank deposits or obligations of and are not insured or guaranteed by Great Gray Trust Company, LLC, any bank, the FDIC, the Federal Reserve, or any other governmental agency. The Fund is a commingled investment vehicle, and as such, the values of the underlying investments will rise and fall according to market activity; it is possible to lose money by investing in the Fund. Past performance is not predictive of future performance.

Collective Investment Trust Funds may be suitable investments for plan fiduciaries seeking to construct a well-diversified retirement savings program. Investors should consider the investment objectives, risks, charges, and expenses of any pooled investment fund carefully before investing. The Additional Fund Information and Principal Risk Definitions (PRD) contains this and other information about a Collective Investment Trust Fund and is available at greatgray.com/principalriskdefinitions or ask for a free copy by contacting Great Gray Trust Company, LLC, at (866) 427-6885.

About Voya Financial^®
Voya Financial, Inc. (NYSE: VOYA), is a leading health, wealth and investment company with approximately 9,000 employees who are focused on achieving Voya’s aspirational vision: “Clearing your path to financial confidence and a more fulfilling life.” Through products, solutions and technologies, Voya helps its 15.2 million individual, workplace and institutional clients become well planned, well invested and well protected. Benefitfocus, a Voya company and a leading benefits administration provider, extends the reach of Voya’s workplace benefits and savings offerings by engaging directly with over 12 million employees in the U.S. Certified as a “Great Place to Work” by the Great Place to Work^® Institute, Voya is purpose-driven and committed to conducting business in a way that is economically, ethically, socially and environmentally responsible. Voya has earned recognition as: one of the World’s Most Ethical Companies® by Ethisphere; a member of the Bloomberg Gender-Equality Index; and a “Best Place to Work for Disability Inclusion” on the Disability Equality Index. For more information, visit voya.com. Follow Voya Financial on Facebook, LinkedIn and Instagram.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20240731093407/en/

Media:

Kris Kagel

Voya Financial

(201) 221-6534

Kristopher.Kagel@voya.com

Source: Voya Financial, Inc.

FAQ

What is the Voya Capital Preservation Fund (VOYA)?

The Voya Capital Preservation Fund is a new Stable Value solution launched by Voya Financial, Inc. (NYSE: VOYA). It's a bank Collective Investment Trust (CIT) designed to provide principal protection, competitive yield, low return volatility, and daily liquidity for defined contribution plan participants.

Who is eligible to invest in Voya's Capital Preservation Fund (VOYA)?

The Voya Capital Preservation Fund is available to Voya's defined contribution plan participants in qualified 401(a), 401(k), and governmental 457(b) plans who are currently eligible to use Stable Value as an investment option.

How much does Voya Financial (VOYA) manage in Stable Value assets?

As of March 31, 2024, Voya Financial (VOYA) manages and administers approximately $40 billion in total Stable Value separate account and synthetic account assets.

What was the total value of Stable Value investments in 2023?

According to industry data, total Stable Value investments reached approximately $882 billion in 2023, indicating strong market demand for these types of investment solutions.