How can my 401K fixed fund pay so much?

[rmcelwee]

This is probably a very easy question for some of you to answer but I never have quite understood how I am getting 3.6% on my Mass Mutual fixed fund (MassMutual SAGIC Core II). I think it is a stable value fund and which I am assuming is some kind of insurance product but I just don't know. Reading the prospectus just confuses me. I have a few short duration bond funds (not much money in them) in non-401K investments and they are getting around 2.5% from what I remember. I know the MM fixed fund has an expense ratio of 0.42% but it makes such good money that I am thinking of leaving my money in it post retirement as the bond side of my AA.

I would appreciate any light you guys could shed or comments/suggestions you have. Thanks!

[brewer12345]

It is a stable value fund that likely has a bunch of mbs and corporates. A blended rate of about 4% gross on the bonds was very doable recently and that is about what you are getting after expenses.

[jazz4cash]

I used to be very curious how my former mega corp 401k stable value fund could consistently average >4% also. I guess I was never inclined to look a gift horse in the mouth, but eventually it dropped down below 2% in the ZIRP era and never recovered. Its the main reason I never transferred out of the plan.