Download Stable Value Fund

Stable Value Fund
Asset Class
Stable Value Fund Return
Stability of Principal
The State of Michigan’s Stable Value Fund’s net return is
determined daily. It is derived by blending the net returns of
the Synthetic GIC and Short Term Investment Fund.
Investment Objective
The Fund seeks to provide investors with:
• daily book value liquidity,
• preservation of principal, and
• steady growth over time without daily market
value fluctuation.
Investment Strategy
The Fund is comprised of a Synthetic GIC issued by
Voya Retirement Insurance and Annuity Company and a Short
Term Investment Fund (STIF) managed by State Street Global
Advisors. A Synthetic GIC is an arrangement comprised of
an investment in a portfolio of underlying securities and a
Benefit Responsive Wrapper Contract. The Wrapper Contract
produces a floating rate of return that is adjusted periodically,
but not below zero, to reflect the performance of the underlying
investment portfolio, and generally provides for participant
withdrawals at contract value (principal plus accrued interest).
The portion of the Fund invested in the State Street Global
Advisors Short Term Investment Fund accepts deposits and
pays withdrawal activity prior to the access of the Synthetic
GIC investment contract.
Synthetic GIC Investment Manager
Voya Investment Management serves as the investment manager
for the underlying portfolio of assets backing the fund’s Synthetic
GIC contract. The underlying portfolio’s benchmark is the
Barclays Capital Intermediate Government Credit A or Higher
Index. To learn more about Voya Investment Management, visit
their web site at www.investments.voya.com.
Potential Risks
In a Synthetic GIC, the Benefit Responsive Contract does not
guarantee the performance of the underlying securities or default
by the issuer of the underlying securities. Periodically, the
Synthetic GIC’s rate of return is adjusted to reflect market value
gains and losses subject to a minimum rate of return of zero.
Under some scenarios it is possible for participants to lose
money even in a stable value option. Those situations are
unlikely and rarely occur, but they can happen. It’s important
for investors to be aware of these potential risks. Withdrawals
resulting from employer-initiated events, such as withdrawals
following mass layoffs, employer bankruptcy or full or partial
plan termination are not always covered by stable value
investment contract guarantees and may be restricted or subject
to market value adjustment. Your stable value account balance
is not guaranteed by the Federal Deposit Insurance Corporation
(FDIC), or by any other government agency. This portfolio is
not a registered investment under the 1940 Act and has not been
registered with the Securities and Exchange Commission.
Are there any limitations on contributions,
withdrawals, or transfers from my plan’s
stable value option?
Generally, there are no limitations on contributions to or
withdrawals from the Fund as a result of retirement, death,
disability, unforeseen hardship, separation from service,
or attainment of age 65 (consult your own plan for limitations).
Participant transfers between your stable value option and funds
with similar investment objectives (referred to as competing
funds) may be subject to an industry standard 90 day “equity
wash” provision. Examples of competing funds are Money
Market Funds, Short-Term Bond Funds or another investment
option within the plan that contains a guarantee of principal.
The SSgA Yield Enhanced STIF and Self Managed Account
plan investment options are competing funds.
Stable Value Fund
What are the fees?
Stable Value Fund Composition
At 06/30/2017 total annual fees are 0.22% based on
current invested assets.
(as of 06/30/2017)
($ in millions)
Asset Value
SSGA STIF $106.6
Synthetic GIC
$1,053.1
Total1
$1,159.7
% of Stable Value Fund
9.2%
90.8%
100.0%
Synthetic GIC Portfolio Statistics
Fixed Income Sector Breakdown1 (as of 06/30/2017)
Credit Quality Breakdown1,4 (as of 06/30/2017)
SectorAllocation
n Treasuries and Cash343.0%
n Government Related26.0%
n Corporates
30.0%
n ABS
9.0%
n MBS
7.0%
n CMBS
5.0%
n Other
0.0%
n
n
n
n
n
AAA570.8%
AA 6.2%
A
22.7%
BBB
0.3%
<BBB
0.0%
Top Ten Holdings (as of 06/30/2017)
Description
Coupon %
Sector
Effective Rating4 % of Portfolio Purchase Date
1. UNITED STATES TREAS NT 1.75 30JUN22
1.750
US Treasury & Cash
AAA
11.51 06/28/2017
2. UNITED STATES TREAS NTS 1.5 15JUN20
1.500
US Treasury & Cash
AAA
10.59 06/13/2017
3. UNITED STATES TREAS NT 1.25 30JUN19
1.250
US Treasury & Cash
AAA
10.25 06/27/2017
4. UNITED STATES TREAS NTS 2.0 30JUN24
2.000
US Treasury & Cash
AAA
4.32 06/29/2017 5. UNITED STATES TREAS N 2.375 15MAY27
2.375
US Treasury & Cash
AAA
2.81 05/11/2017
6. FEDERAL NATL MTG ASSN 1.875 18SEP18
1.875
Government Related
AAA
2.78 01/09/2015 7. FEDERAL HOME LN MTG CO 1.25 02OCT19
1.250
Government Related
AAA
1.07 09/28/2012
8. KREDITANSTALT FUR WIEDE 1.0 11JUN18
1.000
Government Related
AAA
0.91 02/27/2015 9. ORACLE CORP 2.5 15MAY22
2.500
Corporates
A+
0.68 04/28/2015
10. ANHEUSER-BUSCH INBEV FI 3.3 01FEB23
3.300
Corporates
A-
0.67 01/13/2016
May not add to 100% due to rounding
Includes Agencies
3
Includes Cash/Cash Equivalents
4
We seek individual security ratings from three credit rating agencies that are registered with the SEC as nationally recognized statistical rating
organizations (NRSROs) -- typically Moody’s, S&P and Fitch. If ratings are available from all three agencies, the security will be assigned the
median rating. If ratings are available from only two of the agencies, the lower of the ratings will be used. If a rating is available from only
one agency, then that rating will be used. If ratings are not available from any of the three agencies, then we may either assign the security an
internal rating or mark it as “N/R” (not rated). 5
AAA includes Treasuries and Cash and Agencies
1
2
Insurance products, annuities and funding agreements; sold as securities; and fixed annuities are issued by Voya Retirement Insurance and Annuity
Company (“VRIAC”), which is solely responsible for meeting its obligations. Plan administrative services provided by VRIAC or Voya Institutional Plan
Services, LLC. All companies are members of the Voya Financial® family of companies. Securities distributed by Voya Financial Partners, LLC
(member SIPC) or other broker-dealers with which it has a selling agreement. CN0505-34172-0619D 3020289.G.P-26