Stable value funds have become a dominant fixture within the 401(k) marketplace. Unfortunately, the information available on the underpinnings of these funds has not risen in step with their increased popularity.

Further, while it is tempting to think that stable value funds are all the same the reality is that they come in all shapes and sizes with significantly different underlying portfolios, expenses and risk profiles. It is extremely difficult to prepare an apples-to-apples comparison of stable value funds. Here is a brief list of some of the major variations:

• Pooled vs. separate account structure
• Credit quality of underlying portfolio
• Cash flow
• Wrap coverage via external insurers or instead via the sole insurer sponsoring the fund
• Participating vs. Non Participating wrap insurance
• 12 month put vs. market value adjustment exit policies

We routinely evaluate these products on behalf of our clients and have a substantial data base of information readily available. We have also authored several articles on the topic which are posted on our website and can be found at the following links:

• What is a Stable Value Fund?
• What should I expect from my Stable Value Fund in 2009?
• Bathing in Risk - the 90 Day Equity Wash

An external source of information on these products can be found at the Stable Value Investment Association.