The Bank of New York Mellon (the "Bank") is accepting new investors into the Mellon Stable Value Fund, a bank-sponsored collective investment fund for defined contribution benefit trusts*.
The Fund stopped accepting new investors in January 2012 due to an industry wide shortage of investment contracts, which the Fund uses to help insulate investors from market volatility. Shortly thereafter, the Fund began accepting new investors with $1 million or less, and in December 2013 the Fund allowed new investors with $10 million or less, although some larger investments were accepted on a case-by-case basis.
Associates of the San Francisco-based stable value division of Standish Mellon Asset Management Company LLC ("Standish"), a fixed income manager for BNY Mellon, manage the Fund in their capacity as dual officers of The Bank of New York Mellon.
"We are pleased to see the amount of new stable value investment capacity that has been added to our industry over the past two years," said Eric Baumhoff, chief investment officer of Standish's stable value division. "The Bank of New York Mellon will continue to manage the Mellon Stable Value Fund in a prudent manner for plan participants, matching new investment demand with new product investment capacity."
The Fund's goals are to preserve capital and earn current income. It invests primarily in book value wrap contracts that incorporate a broad selection of short- and medium-term fixed-income instruments, including U.S. government and agency bonds, corporate bonds, mortgages and asset-backed securities. The Fund also may hold insurance company issued Guaranteed Investment Contracts (GICs) or similar instruments as well as cash equivalents.
The Fund was launched in February 1993 and had assets of $1.049 billion on December 31, 2013.
* The Mellon Stable Value Fund is an unregistered bank product available only to qualified retirement plans. Specifically, it is a bank-maintained collective investment fund offered to plan sponsors as a stable value investment vehicle for qualified employee benefit plans and trusts. It is not available to the general public. The Bank of New York Mellon is the trustee and discretionary investment manager for the Fund, but the Fund is managed by certain employees of Standish acting in their capacity as dual officers of the Bank. Investors must enter into an investment management or participation agreement with the Bank.