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Objective
The Stable Value Portfolio invests 100% of its assets in the Invesco Stable Value separate account. The Invesco Stable Value separate account invests in investment contracts (also referred to as “wrap contracts”) and seeks to produce a stable return while avoiding negative returns. In most market environments, it should provide investors with a higher return than a money market fund while striving to maintain liquidity for Account Owner-initiated transactions and safety of principal.
Strategy
The Portfolio typically invests in wrap or investment contracts issued by insurance companies and banks, which are in turn backed by a diversified portfolio of high-quality bonds, including government securities, corporate bonds, mortgage-backed and asset-backed securities and cash equivalents. Interest rate futures, options and swaps may be used to manage yield curve or duration or other risk positions and must abide by the duration, credit quality and other constraints in the Portfolio's investment guidelines. Each wrap contract contains general obligations of the issuing company to pay Account Owner distributions at contract value, even if the market value of the assets in the Portfolio is less than the contract value of those assets. The contract value is generally equal to the Portfolio's invested capital plus a rate of return related to the investment performance of the assets.
Invesco diversifies the Portfolio by adding external sub-advisors for style diversification, which can lead to improved consistency. The fixed income portfolios provide investment returns, while the wrap contracts are designed to protect against interest rate volatility and allow Account Owners to transact at their invested balance plus any accrued interest. The contracts also provide for periodic interest crediting rates that are used to post a composite rate of return to Accounts daily. Although the Portfolio seeks to preserve the value of Account Owner investments, it is possible to lose money by investing in the Portfolio. The Stable Value Portfolio is not guaranteed by Invesco. Any guarantees provided by the investment contracts are subject to risks described in the Wrap Contract Risk.
To reduce risk of default of contracts or bonds, Invesco selects only investment contract issuers that have been approved by Invesco's credit research team, and typically buys only securities that are rated investment grade and above by national rating agencies such as Moody's or Standard & Poor's. Invesco conducts its own in-depth securities analysis of bond issuers and financial institutions, and manages the Portfolio in accordance with strict credit and diversification guidelines. The Stable Value Portfolio is a conservative option and carries relatively low risk, but it has a number of investment-related risks described below. The Stable Value Portfolio does not invest in a single Underlying Fund, accordingly there is no separate prospectus available.
Risks
As with any investment, your investment in the Portfolio could lose money or the Portfolio's performance could trail that of other investments. Each Portfolio has a different level of risk. For a full description of the investment risks associated with this Portfolio, see the Program Description.
