Stable Value Fund

AAA

DEFINITION of 'Stable Value Fund'

An investment vehicle found in both company retirement plans and, quite recently, IRA accounts. Stable value funds are comprised of mostly 'synthetic GICs' (known also as wrapped bonds) because of their inherent stability. These bonds can be short or intermediate term with longer maturities than other choices such as money market funds. They are paired (or wrapped) with insurance contracts to guarantee a specific minimum return.

INVESTOPEDIA EXPLAINS 'Stable Value Fund'

In times of economic recession, stable value funds can prove to be a most valuable investment to have. While many other investments' returns are much lower in hard times, stable value funds remain just that, stable. The owner of the investment will continue to receive the agreed upon interest rate as well as the full principal regardless of the state of the economy. Generally speaking, funds and pooled investments tend to be less risky as the investment is not reliant on one specific company, stock, etc.

RELATED TERMS
  1. Money Market Account

    An interest-bearing account that typically pays a higher interest ...
  2. Money Market Fund

    An investment fund that holds the objective to earn interest ...
  3. Guaranteed Investment Contract ...

    Insurance contracts that guarantee the owner principal repayment ...
  4. Bond

    A debt investment in which an investor loans money to an entity ...
  5. Volatility

    1. A statistical measure of the dispersion of returns for a given ...
  6. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
Related Articles
  1. Retirement

    Tips On How To Use IRAs To Boost Retirement Savings

    According to the Trustees of the Social Security Fund, the fund will be depleted by 2037. Are you ready?
  2. Investing

    The Ups And Downs Of Investing In Cyclical Stocks

    This strategy can be profitable but only if you know when to dump these stocks.
  3. Investing

    The Advantages Of Bonds

    Bonds contribute an element of stability to almost any portfolio and offer a safe and conservative investment.
  4. Active Trading Fundamentals

    Recession: What Does It Mean To Investors?

    Understanding the business cycle and your own investment style can help you cope with an economic decline.
  5. Retirement

    Stable Value Funds: Risk Less And Earn More

    Stable value funds can provide higher yields and lower risk.
  6. Savings

    7 Ways To Recession-Proof Your Life

    Find out what you can do to prepare and cope in tough economic times.
  7. Options & Futures

    You CAN Retire In A Recession

    Just because you receive your gold watch during a recession, doesn't mean you can't retire on time.
  8. Options & Futures

    Net Worth Nosedive: Can You Still Retire?

    If a dip in the economy has you worried about retirement, you still have options.
  9. Options & Futures

    Pick 401(k) Assets Like A Pro

    Professionals choose the options available to you in your plan, making your decisions easier.
  10. Economics

    How successful is fiscal policy in guiding the national economy?

    See why it is difficult to evaluate the impact of fiscal policy on the national economy and how fiscal tools have failed to live up to expectations.

You May Also Like

Hot Definitions
  1. Multiplier Effect

    The expansion of a country's money supply that results from banks being able to lend. The size of the multiplier effect depends ...
  2. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  3. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  4. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  5. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  6. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
Trading Center