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Stabe value funds used to be called GIC's. The funds are invested in corporate paper or debt. The "guarranteed" investment contract means that the fund has contracts with insurance companies to cover loss of principle in case of losses due to interest rate rises, for example.

I have a stable value fund in my 401k which has remained stable now for many years. If you have seen a drop in the principal value, something is very wrong. You should immediately check into what has happened and move your money if necessary.

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