What Is A Stable Value Fund?

Stable value funds are typically available only through defined contribution plans such as a 401(k). Savers can decide to participate in a stable value fund as it provides a combination of benefits:

  • Principal preservation
  • Consistent, positive returns
  • Liquidity for participant benefit payments

How Does A Stable Value Fund Work?

Stable value products provide an attractive principal preservation investment, protecting participants from day-to-day market volatility while providing steady returns and readily available liquidity for plan participants. Stable value products commonly provide plan participants with the flexibility of daily liquidity for benefit payments. 

Typically the only restriction on a participant's stable value transitions is a prohibition of direct transfers from a stable value investment directly into another investment product that provides a similarly low-risk profile such as a money market fund. 

Who Uses A Stable Value Fund?

Stable value investors have historically included those with conservative risk tolerance, as many tend to be near or in retirement. Stable value products’ principal preservation objective, steady rate of return, and compelling risk/return profile make stable value investments ideally suited for plan participants seeking to protect their retirement savings and provide a source of income during retirement.

If you have any questions regarding Stable Value Funds please speak to your qualified financial professional.