What type of return did you get from your 401K STABLE VALUE FUND in 2020 and 2021

[Digital Nomad]

My wife's 401K is with Vanguard and I saw that they are now offering a STABLE VALUE FUND as an option. I looked at it but was confused about how it worked and what type of return it was giving.

Is it like TIAA Traditional where you get a guaranteed return but have strict requirements for withdrawing the money? (Like over ten years)

Do you have a STABLE VALUE FUND option in your company 401K? Do you use it as an alternative to a Bond Fund? How does it work? If it pays a guaranteed 2% maybe it would be a great alternative to a bond fund with the expected terrible returns in bond in the next few years.

 

[Dtail]

I have a Stable Value fund in my 401k. The current rate which changes every 6 months is gross 3.11% and after fees it is 2.97%.
I consider this fund to be a valuable component in my Fixed Income allocation and I have 50% of my fixed income allocated to it.

 

[Masquernom]

From Fidelity:

2011 2012 2013 2014 2015 2016 2017
2018 2019 2020 2021
Interest Income Fund
3.48% 2.69% 2.08% 1.91% 2.09% 2.01% 2.05% 2.34% 2.48% 2.11% 1.18%

 

[pb4uski]

You can think of a stable value fund as similar to a money market fund... pays interest, no interest rate risk and you can add or withdraw at anytime. Under the hood it is different:

Stable value funds invest in high-quality government and corporate bonds, short-term, and intermediate-term. They are no different from any bond fund, except they are insured. An insurance company or bank is contractually obligated to protect the fund's investors from any loss of capital or interest.

The bonds in such a fund are sometimes called "wrapped" bonds, referring to the fact that they are insured. The insurance is commonly issued in the form of a so-called synthetic guaranteed investment certificate (GIC).

A stable value fund is inherently as safe an investment as a money market fund. Historically, such funds provide a slightly higher rate of return than money market funds.

I'd kill to have access to a good stable value fund paying a reasonable rate of interest.

 

[jfn111]

I have an Interest Income Fund, in my 401K, that is at 2.17% for the last year and 2.53% for a 3 year average.

 

[latexman]

Average Annual Returns in my company's Fixed Income Fund are:

YTD (Daily)* +1.04%

1 Yr +1.38% 3 Yrs +1.91% 5 Yrs +1.88% 10 Yrs +1.78%

It's okay. I also have VIPIX +3.89% YTD and FXNAX -2.2% YTD.

 

[pb4uski]

Is VIPIX minimum initial investment really $5 million? How much of it do you have?

https://investor.vanguard.com/mutual-funds/profile/VIPIX

 

[OldShooter]

A bit apples/oranges I know but our TIPS are up 4.39% for the year beginning 9/30/2020.

 

[NW-Bound]

I just looked at my wife's 401k Stable Value Fund. For the trailing 12 months, Oct 2020 to Oct 2021, it returned around 5.5%. I don't know how they did it.

 

[latexman]

Is VIPIX minimum initial investment really $5 million? How much of it do you have?

I wish! It's 11% of my 401k account. Part of my 40% bond allocation.

My company's 401k is through Fidelity. Maybe at the Fidelity level or the company level they have $5 million.

 

[jollystomper]

I have a stable value bond fund in my 401K, and it is 99% of my bond allocation. Its YTD return (annualized) is 2.51%. Last year the return was 2.74%.

 

[OldShooter]

A bit apples/oranges I know but our TIPS are up 4.39% for the year beginning 9/30/2020.

Ack! I did what I always try to avoid -- looked at sticker price and not total return. Adding interest payments adds about 2.28% to the return, so total return is about 6.7%.

 

[Dtail]

I have a stable value bond fund in my 401K, and it is 99% of my bond allocation. Its YTD return (annualized) is 2.51%. Last year the return was 2.74%.

If I knew better before I retired, I would have transferred more monies into my 401k and have a possibility for the Stable Value fund to be 100% of my bond allocation instead of 50%. The 401k fund also had the low cost Vanguard equity funds, thus a perfect allocation scenario.

 

[yakers]

Federal TSP Fund, something like a stable value fund but no risk of loss: 1 year 1.20%
3 year 1.66%
5 year 1.98%
10 year 1.94%

 

[jazz4cash]

My SVF has been disappointing for the last decade. The returns are 1.35/1.8/2.24/2.15/2.14 for YTD/1/3/5/10 yrs. Still decent compared to a MM find but it used to be 3-4 %. No restrictions on withdrawals. It is one reason I plan to keep this 401k forever but currently I’m using CD/MYGA for most of my cash and a bit in Hi Yield Savings.

 

[RetireAge50]

I'd kill to have access to a good stable value fund paying a reasonable rate of interest.

Rather than kill maybe get a job with a company with a good stable value fund then transfer your money to it and then quit.

 

[jazz4cash]

Federal TSP Fund, something like a stable value fund but no risk of loss: 1 year1.20%
3 year1.66%
5 year1.98%
10 year1.94%

I think you are referring to the G Fund within the TSP. Stable Value funds have no risk of loss either.

 

[Koolau]

Mine has been running right around 2% for past 2 or 3 years. It's been very, well, stable. YMMV