Our Insights

Karl Tourville, Founding Managing Partner at Galliard Capital Management, along with two other industry experts, Warren Howe of MetLife and Karen Chong-Wulff of ICMA Retirement Corporation, participated in an Asset TV Masterclass panel discussing stable value. Watch the video to learn more about the current state of the industry, what plan sponsors should consider when evaluating stable value options and managers, and future opportunities within the stable value asset class.

-U.S. economy shrugs off hurricane disruption to post strong GDP growth in Q3
-Strong momentum for growth in Q3
-Trade tensions continue as Mid-Term Elections near
-Fed raises in September and stays on course for 4th hike in 2018

-U.S. GDP growth came in at 4.2% in the second quarter, driven by a strong rebound in personal consumption growth of 3.8% (vs. 0.5% in 1Q18).
-The Consumer Price Index (headline CPI) has been in the 2.7% to 2.9% year-on-year range since May – the highest since early 2013. Meanwhile, core CPI (ex-food and energy) has been in the 2.2% to 2.4% range over the same time period.
-The Fed raised its policy rate during the quarter by a single 25 bps hike at its September meeting, and continued to signal another hike in 4Q18.

United States automobile sales have been on the rise for seven consecutive years, setting a new record high in 2016. Low gas prices, falling unemployment, and range bound interest rates kept cars moving off dealership lots at record levels. Further contributing to the record auto sales climb has been the extension of lease and loan terms. With low interest rates and more affordable payment options, those looking for a new car are being lured back into the market. However, as a fixed income investor, we do not believe the record level of auto sales and more recent extension of credit terms is all positive news for the sector. In this market update, we explain the key components we are monitoring in auto loan and auto lease asset backed deals, trends in auto lending, and how Galliard is navigating an auto market that has seemingly reached its peak.

Traditionally, corporate bond trading has required direct communication between dealers and investment managers. While most trading still occurs in this manner, technological advances are transforming this space and electronic trading is growing in importance. As new trading platforms emerge, corporate bond trading is beginning to shift from over-the-counter trading between dealers and investment managers to electronic marketplaces. Within this ‘Fixed Income Insights’ we will explore the driving factors of this evolution in secondary trading, the current state of the electronic marketplace, and how we view and use electronic trading at Galliard Capital Management.

Pensions & Investments released its Largest Money Manager Report in the May 2017 issue. Galliard ranked as one of the top managers in several categories including...

Minneapolis, MN (February 10, 2017) - Galliard Capital Management Inc. announced today that it has become a signatory to the United Nations-supported Principles for Responsible Investment (PRI)

Karl Tourville, Founding Managing Partner of Galliard Capital Management, along with three other industry experts, Warren Howe of MetLife, Karen Chong-Wulff of ICMA Retirement Corporation, and Jim King of Prudential, participated in an Asset TV Masterclass panel discussing stable value. Watch the video to learn more about the stable value asset class, how stable value performs with respect to rising interest rates, and what plan sponsors can expect from stable value in the current market environment.

Pensions & Investments released its Largest Money Manager Report in the May, 2016 issue. Galliard ranked as one of the top managers in several categories including...

Money market fund reform has altered the capital preservation landscape and has led to a renewed interest in stable value from defined contribution plan sponsors who utilize money market mutual funds (or “money market funds”). In this issue of Stable Value Analyst Insights, we provide a summary of the key amendments adopted by the U.S. Securities and Exchange Commission (SEC) to the money market fund rules. We also highlight key differences between money market funds and stable value funds. Lastly, we revisit the compelling case for stable value as a defined contribution capital preservation option. The SEC amendments to the money market fund rules did not directly impact stable value. However, we believe the impact of reform on money market funds further strengthens the case for stable value as an optimal principal preservation choice compared to money market funds.

Recently, taxable municipal bonds have seen growing interest in the marketplace. This makes sense, as the sector presents attractive investment opportunities given its yield advantage over U.S. Treasuries and its history of low default and high recovery rates. Galliard has been an investor in the taxable municipal bond market for over 20 years — since firm inception — seeing it as a viable alternative to the corporate bond market and an attractive option for core bond portfolios, particularly long credit mandates. As of August 31, 2015 we manage nearly $3 billion in taxable municipal bonds from over 400 different issuers across the maturity curve. In this issue of Fixed Income Analyst Insights, Galliard’s Chief Investment Strategist, Richard Merriam, and taxable municipal specialists, Brandon Kanz and Will Moeller, discuss Galliard’s perspective and differentiators in the municipal space.

Pensions & Investments released its Largest Money Manager Report in the May 18, 2015 issue. Galliard ranked as one of the top managers in several categories including...

Galliard is pleased to announce its 20th Anniversary which took place in July, 2015. Founded in 1995, Galliard has a 20 year legacy of providing innovative investment solutions to more than 200 institutions nationwide.

At its core, stable value is a fixed income investment, so it stands to reason that plan sponsors, consultants, and stable value investors may be concerned about the prospect of rising interest rates. However, we believe that the unique protections provided by stable value will benefit investors in a rising rate environment.

In this issue of Fixed Income Perspectives, Karl Tourville and Carrie Callahan discuss how a disciplined adherence to guiding investment principles has allowed Galliard to generate consistent, value-added performance over time.

Crediting rates are a key component of stable value investing. We address how a stable value crediting rate works and the role that the crediting rate plays in determining the overall blended yield of a stable value fund. Our focus is on the crediting rate for synthetic guaranteed investment contracts (GICs also known as security backed investment contracts), although much of what we cover also applies to participating separate account GICs as well. The discussion is less relevant to traditional GICs and non-participating separate account GICs, since these are typically fixed or floating rate fixed maturity contracts and are not addressed.

Stable value was created specifically for use in retirement plans and is the only fixed income investment option available that seeks to provide contract value payouts (principal plus accrued income) for participant transactions instead of market value payouts. The contract value protection feature is a key reason why stable value has been and remains among the most popular investment choices of retirement plan participants since the 1970s.
Galliard has extensive experience evaluating investment contract issuers, as well as negotiating and managing a variety of types of stable value investment contracts for its clients. Following is an overview of three commonly used types of stable value investment contracts available in the market today: Traditional GICs, Separate Account GICs and Synthetic GICs (also called Security Backed Investment Contracts).