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Stable Value Funds -- Specifically, Morley Stable Value Fund
Old 10-01-2014, 12:59 PM   #1
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Stable Value Funds -- Specifically, Morley Stable Value Fund

I am seeking the collective wisdom here since this is a subject I know little about, stable value funds, and even less about the one I can now access: The Morley Stable Value Fund.

Until recently, I have not had access to a stable value fund; now, the Morley Stable Value Fund is available to me in a 401(k); and, I am wondering if I should take advantage of it.
  • At the risk of sounding like a market timer, bond prices frighten me at current levels.
  • CD's and savings accounts pay almost nothing currently as we have discussed here for some time.
  • I have been purchasing I Bonds, even at these levels; but, they take a very long time to accumulate under current rules.
The Morley Stable Value Fund has a gross expense ratio of 0.56% which seems a bit high but not too outrageous. I honestly don't know what else, if anything, I should be concerned about with this vehicle.



Mods: Please feel free to move this to Stock Picking (Individual Security Analysis) if you think that is a more appropriate forum for this thread.



Thank you all in advance.
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Old 10-01-2014, 02:25 PM   #2
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What is it currently paying? I wish I had access to one that pays a decent rate. Focus on the return to you rather than the expense ratio. I would look at it as a CD alternative.
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Old 10-01-2014, 02:51 PM   #3
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What is it currently paying? I wish I had access to one that pays a decent rate. Focus on the return to you rather than the expense ratio. I would look at it as a CD alternative.
Current YTD return is an anemic 0.70% (apologies for that important omission in my original post).
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Old 10-01-2014, 03:05 PM   #4
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Some split the difference for the fixed income portion: 50% bond fund, 50% stable value fund. I did that until recently but reverted back to 100% bond fund once the stable value fund return dropped below 1.5%. I don't know what to do either.

The expense ratio of the stable value fund available to you sounds high to me.

But then, as I always note, I'm not a financial advisor...
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Old 10-01-2014, 03:14 PM   #5
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I have 3 different stable value funds, and I have 75 percent of my 401k money in them. They each have an ER of about 0.5 percent. After the ER is deducted, one gets 2.9 %, one gets 2.3% and one gets 1.1 %. I keep most of my $ in them since I don't like risk, and also don't like plunging stocks and/or bond funds. I don't like the low interest rates, but..... what's the alternative, right?
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Old 10-01-2014, 03:24 PM   #6
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I have about 2/3 of my fixed income in a stable value fund from Nationwide in my 457k earning 3%. There is no expense ratio for this. The other 1/3 is in Pen Fed 5 yr. CD earning 3% also. So I guess I am pretty lucky and out of bonds completely.
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Old 10-01-2014, 04:20 PM   #7
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My stable value (called stable return) fund is getting 0.97% net year-to-date. I will pay ordinary income tax on withdrawals, but for now it doesn't go down. I think of It like a second-tier emergency fund, not an investment.
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Old 10-01-2014, 06:04 PM   #8
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My stable value fund is Vanguard Retirement Savings Trust - currently paying around 1.85% and ER of .53.
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Old 10-01-2014, 06:13 PM   #9
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We have access to a SV fund via DW's employer, but I've always avoided it because the ER is 0.83% and it has some very harsh trading restrictions. But I just checked the yield, which is 1.83% YTD. That seems not-so-horrible by comparison to other numbers quoted in this thread. Is that a decent yield for SV?
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Stable Value Funds -- Specifically, Morley Stable Value Fund
Old 10-01-2014, 06:17 PM   #10
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Stable Value Funds -- Specifically, Morley Stable Value Fund

Quote:
Originally Posted by Cobra9777 View Post
We have access to a SV fund via DW's employer, but I've always avoided it because the ER is 0.83% and it has some very harsh trading restrictions. But I just checked the yield, which is 1.83% YTD. That seems not-so-horrible by comparison to other numbers quoted in this thread. Is that a decent yield for SV?

I compare to what I would get in a money market fund. You don't know that numbers people post here are accurate.
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Old 10-01-2014, 10:17 PM   #11
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I have access to stable value funds in 401 and 457 plans. During the last year , both have been in the low 2% range. The rate changes every quarter. They seem to lag general interest rates by about a year , both on the up , and , down.Remember stable value funds are not gov. guaranteed.
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Old 10-02-2014, 10:40 AM   #12
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Lest I forget, everything you ever wanted to know about stable value funds, but were afraid to ask:

Life, Investments & Everything: Stable Value Funds: 8th Wonder Of The World Or Smoke And Mirrors?
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Old 10-02-2014, 12:42 PM   #13
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My whole bond allocation is in stable value, whereas it used to be split evenly between international and domestic bond funds. In August the stable value fund paid .2843%, so if I multiply that by 12 (months), it looks like 3.4% or so.
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Old 10-02-2014, 03:47 PM   #14
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Thanks to all who have contributed.

My thoughts so far:
1) A good stable value fund would be useful to reduce my portfolio volatility.
2) The only stable value fund which I currently have available is not particularly good (comparing its yield to that of others in this thread).

I was just notified of coming changes to one of my 401(k) plans; so, I am hoping for a better option soon.

Thank you all again.
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Old 10-02-2014, 04:22 PM   #15
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Good vs bad in an SV fund is no different than any other investments. Some hold only short term treasuries while others will be mostly GIC's etc. Some with longer duration holdings may place restrictions on withdrawals to protect the fund. Lot's of variables beyond the yield.
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Old 10-02-2014, 11:40 PM   #16
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Quote:
Originally Posted by brewer12345 View Post
Lest I forget, everything you ever wanted to know about stable value funds, but were afraid to ask:

Life, Investments & Everything: Stable Value Funds: 8th Wonder Of The World Or Smoke And Mirrors?

Super explanation, thanks Brewer.

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Old 10-03-2014, 06:34 AM   #17
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Super explanation, thanks Brewer.

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Old 10-03-2014, 11:54 AM   #18
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100% of our bond allocation is currently in a Stable Value Fund, paying 1.85% with a 0.44% ER.
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Old 10-04-2014, 08:58 PM   #19
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When I retired early at 52 I moved half of my bond allocation to the stable value fund in my 457 plan. It's one year return is 2% with an ER of 0.4%. I have enough in it to cover my expenses until I reach 59.5, I don't want a market crash to force me to sell low. If equites do well I use those for income, if not I'll tap the stable value fund.
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