If an
asset in a stable value fund defaults, the fund will likely temporarily suspend withdrawals while it pursues one or two courses of action.
then put the
rest in some stable value fund and watch it's value get slowly washed away by inflation while your stock investments rise through violent swings.
Among other issues, plaintiffs claimed this lack of prudence and monitoring
resulted in the stable value fund purchasing excessive wrap insurance that unnecessarily dampened return prospects and resulted in conflicts of interest.
So, while the value of the investments
in a stable value fund can fluctuate on a daily basis, a participant is guaranteed to transact at «book value» by virtue of the fund's insurance purchase.
Your opportunity to invest
in stable value funds outside of 401 (k) / defined contribution world has gone away, but given that there is over $ 200 billion invested in stable value funds, and not much has been written on them from a third party point of view, I'll describe them in more detail.
He had 60 % invested in a broad bond fund which had a high exposure to investment grade corporates and high yield (and AAA CMBS), and 40 %
in a stable value fund.
I continued to keep my 401K investment
in the stable value fund and continued to direct new 401K contributions to the stable value fund.