Can a stable value fund legally contain equities? I understand that the insurance premiums would be very high, and because most stable value funds are provided by insurance companies it would be unlikely for one to be offered, but is there any law that a stable value funds must only contain fixed income investments?


A Stable Value Fund is defined as :

a managed portfolio of highly rated corporate or government, short-term and intermediate-term bonds with a principal protection wrapper provided by a life insurance company.

Stable Value Funds are regulated by the Department of Labor's Employee Benefits Security Administration and must comply with the federal pension law.

If a Stable Value Fund held equities, then it would not meet the definition of a Stable Value Fund and would therefore fall foul of the regulatory requirements and be in breach of federal pension law.

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