NEW YORK: J.P. Morgan Asset Management Introduces Stable Value Fund Enhancement
Feb 22, 2012
New York, February 22, 2012 – J.P. Morgan Asset Management today announced an enhancement to its pooled Commingled Pension Trust Fund Stable Asset Income Fund (SAIF)1 that will seek to ensure that the fund remains open and available to new investors.
Traditionally, most pooled stable value funds (which are made of up assets from many 401(k) plans) including SAIF, have allowed plan sponsors to terminate their participation in the fund at book value within twelve months of giving notice (known as a "12 month put option"). The risks associated with this put option have constrained wrap capacity. As a result, these products are at risk of becoming scarce, which could potentially limit plan sponsor and participant investment choices.
To ease this problem, J.P. Morgan Asset Management has eliminated the put option from SAIF. This change has no impact on individual participant-elected transactions. This enhancement ensures that SAIF remains a viable and available investment option for defined contribution plans.
"The stable value pooled fund marketplace is feeling certain unique pressures from wrap providers because of the book value put option," said portfolio manager Peter Chappelear, managing director and head of J.P. Morgan Asset Management's stable value business. "We evaluated various remedies to the problem, and determined that eliminating the put option was the only solution that provided complete relief while benefiting long-term investors."
With this enhancement, investors in SAIF will be able to remain fully invested even with growth in the size of the Fund and sponsors will not be subject to a potential delay when exiting the Fund. Also, retirement plan advisors will benefit from increased product availability made possible by the enhancement.
"Stable value funds play an important role as a fundamental building block in defined contribution plans," said Michael Falcon, Head of Retirement for J.P. Morgan Asset Management. "It's important that these products are able to perform as they were designed to, with uninterrupted access for participants who rely upon them. Our enhancement enables that."
1 The Commingled Pension Trust Fund Stable Asset Income Fund (SAIF) of JPMorgan Chase Bank N.A. is a collective trust fund established and maintained by JPMorgan Chase Bank, N.A. under a declaration of trust. The fund is not required to file a prospectus or registration statement with the SEC, and accordingly, neither is available. The fund is available only to certain qualified retirement plans and governmental plans and is not offered to the general public. Units of the fund are not bank deposits and are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You should carefully consider the investment objectives, risk, charges, and expenses of the fund before investing.
About J.P. Morgan Asset Management – Retirement
J.P. Morgan Asset Management is a leading comprehensive retirement solutions provider dedicated to improving individual retirement outcomes. J.P. Morgan Retirement Plan Services provides bundled defined contribution services to more than 650 clients and 1.8 million plan-level participants, representing more than $125 billion in retirement plan assets as of December 31, 2011. J.P. Morgan Defined Contribution Investment Solutions manages more than $61 billion in defined contribution assets as of December 31, 2011.
About J.P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under supervision of approximately $1.9 trillion and assets under management of $1.3 trillion (as of December 31, 2011), is a global leader in investment management. J.P. Morgan Asset Management’s clients include institutions, retail investors and high-net worth individuals in every major market throughout the world. J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. JPMorgan Chase & Co. (NYSE: JPM), the parent company of J.P. Morgan Asset Management, is a leading global asset management firm with assets of approximately $2.1 trillion and operations in more than 60 countries. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. and its affiliates worldwide. Those businesses include, but are not limited to, JPMorgan Chase Bank, N.A., J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated, and J.P. Morgan Alternative Asset Management, Inc.