Minimizing the Impact of Market Volatility

With defined contribution assets increasingly being invested in target date funds, ensuring plan participants are protected from market volatility — particularly those approaching or already in retirement — is critical. As one of the leading issuers of stable value solutions, MetLife is committed to understanding the steps plan sponsors are taking to optimize risk/return in their TDFs. Our 2024 Stable Value Study assesses whether plan sponsors are adopting volatility management strategies and gauges interest in applying the long-standing volatility smoothing principles of stable value in new and creative ways for TDFs. This infographic highlights some of those key findings.

Weathering Market Volatility

Those already in retirement are typically the most vulnerable to the impact of market volatility as they try to balance investment growth with market performance, while they draw down their assets. Older workers, particularly those within 10 years of retirement, can also be significantly negatively impacted because of the short time horizon they have to recover from losses in their retirement savings.

Growing Interest in Volatility Management Strategies

There is growing interest among plan sponsors in adopting strategies to manage volatility, including solutions that can significantly lower volatility while maintaining returns or, conversely, enhance returns while maintaining volatility.

Key Takeaways

• The impact of market volatility on DC plan participants — especially older workers and retirees – is a concern.
• There is growing interest in adopting strategies to manage volatility.
• There are new solutions that apply the long-standing volatility smoothing principles of stable value in creative ways for TDFs.
• These solutions can significantly lower volatility while maintaining returns or, conversely, enhance returns while maintaining volatility.

For more insights on the Stable Value Study, visit metlife.com/svstudy2024
To learn more about the benefits of stable value, visit metlife.com/stablevalue