CNBC writes "This low-​risk 401(​k) investment is guaranteed to not lose your money." They explain, "For investors nearing retirement or already retired who need the certainty of cash but want to squeeze out a bit more yield, a certain investment in your 401(​k) plan may fit the bill. It'​s called a stable value fund (​or something similar) and typically is available only through defined contribution plans such as a 401(​k). In simple terms, these low-​risk funds aim to protect your principal and give you a bit more in earnings than you'​d get in a money market fund." The piece comments, "However, they also don'​t provide much growth, so they come with inflation risk -- which means the value of your money could lose purchasing power. That makes these funds largely impractical for young savers whose retirement is decades away.... Roughly $​908 billion is invested in these funds, according to the Stable Value Investment Association. Older investors are more likely to use them as they head toward retirement: Among 401(​k) participants in their 60s, about 9.​1% of assets are invested in stable value funds, research from the Employee Benefit Research Institute shows. That compares to 1.​3% of investors in their 20s." It adds, "Stable value funds generally use short- to intermediate-​term fixed income investments, but differ from bond funds in that the share price is a constant $​1. There'​s also an insurance component to these funds, assuring the per-​share value won'​t go below that amount -- which translates into no loss of principal regardless of what the broader markets are doing. In comparison, investing directly in bond funds comes with interest rate risk -- as rates rise, bond prices fall <​b:>~​_. This year, amid rising rates, `​short-​term bond funds have lost about 4% year to date."

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