Stable value Q&A

my529 now has a stable value fund within its investment offerings. The PIMCO Interest Income Fund was added to the underlying funds in the four predetermined age-based options, reducing the allocation percentages of the Vanguard Short-Term Investment Grade Fund and the FDIC-insured accounts. The fund was also added as an optional underlying fund for owners of Customized Age-Based and Customized Static accounts who design their own investment allocations.

Here are some commonly asked questions about the PIMCO Interest Income Fund.

  • What is stable value? Stable value refers to an asset class that focuses on capital preservation and daily liquidity, while providing steady returns to investors. A stable value fund invests in high-quality, short-term and intermediate-term government and corporate bonds. The fund contracts with insurance companies and banks to help smooth investment volatility using wrap contracts. A wrap contract typically allows investors to transact at their original invested balance plus any interest earned on the investment.
  • What is the performance history, and how have similar stable value products performed in the past? The PIMCO Interest Income Fund is a separate account managed solely for my529 by Pacific Investment Management Company (PIMCO), an investment firm based in Newport Beach, California, so performance history does not yet exist for this fund. However, many large companies offer stable value funds in 401(k) retirement savings plans.
  • What is the yield of the PIMCO Interest Income Fund? The yield will vary over time, and the latest yield information is available on the fund fact sheet. The fact sheet, which can be found at my529.org, will be updated on a quarterly basis.
  • How are returns paid out, and will a monthly dividend appear on a statement? The fund has a floating price reflecting its value, so earned interest will accrue to the net asset value (NAV), rather than being paid out on a periodic basis. As a result, quarterly statements will show a change in the NAV.
  • What is the ticker symbol? The PIMCO Interest Income Fund is a proprietary fund. It does not have a ticker symbol that can be used to search for information, as is typically done with a ticker for a publically traded mutual fund.

Read the Program Description for more information on the PIMCO Interest Income Fund.