Keeping Your Money Safe, with Caveats

The stock market’s recent gyrations sent retirement investors scurrying for shelter. Galliard Capital Management’s stable-value funds, offered in 401(k) and other retirement plans, drew more than four times the usual inflows in August. Investors in retirement plans administered by Wells Fargo moved $850 million into the funds that month, while at Aon Hewitt, a benefits manager, about $1 of every $5 transferred by plan participants was put in a stable-value fund.

Why the stampede? In unpredictable times, stable-value funds seem like an unbeatable deal, offering better returns than money-market funds without the volatility of stocks. The average stable-value fund yielded 2.55 percent at the end of August compared with 0.02 percent for the average taxable money market fund, according to data from Hueler Cos. and iMoneyNet. In August the funds had a total return of 0.22 percent, compared with the 5.68 percent decline in the Standard & Poor’s 500-stock index.