Stable Value Investments
Safety and stability are the key benefits of stable value investment. While similar to money market funds, stable value funds preserve principal and accumulated earnings but offer significantly higher returns for tax-deferred assets. The returns are comparable to intermediate bonds, but investors are shielded from the associated volatility of bond portfolios.
Another key advantage of stable value investment is that investors can buy into and sell out of the product at book value.
For these reasons, stable value funds are appropriate for defined contribution plans. In fact, approximately $400 billion in assets are currently invested by defined contribution retirement plans in stable value funds.
