Federated Investors last week became the latest fund adviser to introduce a stable value fund, a move which comes as investors increasingly are looking for the stability of money market fund- style investments.
Federated's Ultrashort Bond fund will seek yields higher than money market funds while trying to keep fluctuations in the fund's $2 per share net asset value (NAV) to a minimum. Federated joins several other fund advisers who in recent weeks have begun offering stable value funds, so named because fund managers try -- but do not promise -- to keep fund NAVs constant. Bankers Trust in September introduced BT Preservation Plus, a stable value fund for retirement accounts. And last month, Dreyfus filed a registration statement with the SEC for a stable value product, the Dreyfus Retirement Income Fund.