What are stable value funds? How do they work? What are the benefits? What are the risks? These are some of the basic questions most have. Below we will answer these questions and others to help you increase your knowledge and understanding of stable value funds.
Stable value generally refers to a relatively low-risk asset class that focuses on capital preservation and liquidity, while providing steady, positive returns to participants within certain types of savings plans.
» Read the full answerStable value is usually offered by a plan sponsor in a defined contribution plan as a low-risk investment that focuses on capital preservation and liquidity, while providing steady, positive returns to a plan’s participants.
» Read the full answerYes, there are a variety of types of stable value investment options offered to the market. They may be offered by investment managers, trust companies, or insurance companies in a variety of structures.
» Read the full answerIn stable value investing, GICs and wraps are essentially two of several types of investment contracts.
» Read the full answerAlthough stable value has a long, well established track record of preserving capital, providing liquidity, and generating steady, positive returns, it is important to recognize that all investments have risks.
» Read the full answerOver a business cycle, most stable value investment options have historically provided gross returns similar to short- to intermediate-maturity bond strategies but without the daily mark-to-market volatility.
» Read the full answerAn equity wash is a contractual provision in a stable value investment option that requires any transfer a participant makes from the stable value investment option to a competing option to first be directed to any other investment option for a period.
» Read the full answerYes, stable value investment options, investment contracts, investment managers, and other service providers such as insurance companies involved in stable value have multiple layers of regulatory oversight.
» Read the full answerStable value investment options do not exist in publically available investment vehicles, such as mutual funds.
» Read the full answerBecause of regulatory rules, stable value as an asset class is not available in either IRAs or taxable accounts.
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