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Is There a Good Stable Value Fund?
Old 11-23-2004, 04:25 PM   #1
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Is There a Good Stable Value Fund?

Does anyone know of a good "stable value" fund which has C.D. like yields with a somewhat fixed share price?My former 401k plan offered such a beast. It was a nice
place to park cash. *My IRA is with Vanguard but they do not seem to have an equivalent product available other than low yielding money market funds.
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Re: Is There a Good Stable Value Fund?
Old 11-23-2004, 05:09 PM   #2
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Re: Is There a Good Stable Value Fund?

I can't answer your question as to what might be a good stable value find. But I will comment. I hope you don't find it derisive.

These funds violate the no-free-lunch rule. While it is true that they try to avoid interest rate risk, they are often chock full of questionable credits. Although they may have done well over the recent past, it could be different in a severe recession.

When I park my car, I'll pay up for a lot where the car is likely to be intact when I return.

Same when I park my cash.

Mikey
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Re: Is There a Good Stable Value Fund?
Old 11-24-2004, 07:26 AM   #3
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Re: Is There a Good Stable Value Fund?

I would suggest a blend corporate bond fund, such as Janus Flexible income JAFIX. It has a 10 year return (from today) of 7.85%. As for stability, head over to MSN investor and put JAFIX on a 10-year graph with the chart set to "investment growth" (from an initial $10,000 invested). On that 10 year graph you'll see that JAFIX is quite stable as well... only very slighly wavy line that goes straight up.

7.85% with virtually no volatility is the closest i can get you to the holy grail. If you want more return, we're going to have to talk share price fluctuation :-)
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Re: Is There a Good Stable Value Fund?
Old 11-24-2004, 12:26 PM   #4
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Re: Is There a Good Stable Value Fund?

I might have misunderstood the question. By "stable value fund", I assumed that RocMiner was referring to one of the funds that are in effect passthroughs of floating rate bank loans.

These have specifically been marketed as stable value funds, because they try to neutralize interest rate risk.

Mikey
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Re: Is There a Good Stable Value Fund?
Old 11-24-2004, 02:06 PM   #5
 
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Re: Is There a Good Stable Value Fund?

Would the stable value fund in your 401(K) be considered a GIC (Guaranteed Insurance Contract) which a number of insurers offer?

My company's 401(K) has a GIC and is currently at 4.3% which aint to shabby in this evironment. Have a nice stash parked there since I retired November 1st
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Re: Is There a Good Stable Value Fund?
Old 11-24-2004, 02:37 PM   #6
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Re: Is There a Good Stable Value Fund?

Mikey: Yes, the yield did fluctuate however it was much better than a money market/short term bond fund.

Azanon: Good 10 yr results but I'm after current+stable

George: This sounds like a similar product. I wonder if they can be bought like a mutual fund from within a Vanguard IRA? I'll look into it.

Thanks all.

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