During periods of market turbulence and low-interest rates, many investors struggle to find investment alternatives that aren’t getting hammered. But people saving for retirement may be pleasantly surprised to discover a unique breed of mutual fund known as stable value funds.
These funds, which are typically offered in 401(k) plans, are somewhat similar to money market funds, except they post higher yields with relatively little risk. If you’re considering a stable value fund, here’s a look at how they work so you can weigh their advantages and disadvantages before deciding if they are a good choice for your retirement portfolio.
Key Takeaways
- Stable value funds are typically only offered in defined contribution plans, such as a 401(k).
- They are conservative investments that provide steady income with relatively little risk as your principal is guaranteed.
- However, less…
