In the first scenario of a steady, extended climb in rates, the firm found that investors would likely see the value of investments in mutual funds that hold short-term or medium-term bonds decline over a three-year period, while holders of stable-value accounts would see their balances continue to grow steadily.
Even if share prices fall, he says, the higher yields mean these investments are likely to provide higher returns over the next two to three years than short-term bonds.