EFA results vs I Fund results

[SeaBear]

This has probably been covered before but why does the EFA gains differ significantly from the I fund gains? Looking at the gains for the past couple of days they have been way off. For example today the I fund returned .75% but the EFA returned 1.16%. That is a pretty big difference. Yesterday the EFA was positive but the I fund was negative. Does anyone know the reason?

[usps2013]

US dollar gains and losses. ($USD).

Purchase power.

[SeaBear]

So help me understand:

As the dollar declines: Like it did today by 0.78% then that impacted the I Fund investment by driving it negative below the EFA? But if the TSP I fund is supposed to match the EFA in investment and distribution wouldn't the decline in the dollar have the same effect on the EFA?

[blackops]

Not even gonna try to keep the I fund straight. Too many variables.

[usps2013]

The EFA fund is an imperfect instrument to track the I fund.

EFA YTD returns = 12.68
I Fund YTD returns = 13.71
USD YTD returns = ~5% loss

The USD losses can likely explain some of the I fund's outperformance of the EFA.

Because the I fund gets corrected a day behind, timing the I fund is simply unwise. Trade the I fund's long term trend to avoid these issues.

[evilanne]

It also depends how much TSP has to buy or sell in a day based on all the IFTs and contributions for a particular fund. F, S & C are usually really close to the closing price. Reinvestment of dividends increases # shares of stocks in the fund, may sometimes have an impact. For the I Fund, European & Asian markets are closed from 12:00 to 4:00 EST so I'm sure that the closing price may be less firm (guesstimate or SWAG) for the I Fund based on the dollar exchange rates and the direction of the foreign markets. https://eresearch.fidelity.com/eresearc ... ours.jhtml

[SeaBear]

I was wondering if the TSP shifted all the IFTs around internally first and then adjusted their holdings. I would make sense that as prices on the I fund stocks went up then if TSP had to "go out and buy them" later that would account for some of the difference and then you have the dollar getting weaker on top of that which makes the buying power even less. It's interesting because you think the I fund is doing really well (looking at the EFA) when that really isn't the case. Thanks all for the comments.

[CajunJoe]

Too hard to follow EFA.

[Heat]

Yep.

[JudgeTina]

It also depends how much TSP has to buy or sell in a day based on all the IFTs and contributions for a particular fund. F, S & C are usually really close to the closing price. Reinvestment of dividends increases # shares of stocks in the fund, may sometimes have an impact. For the I Fund, European & Asian markets are closed from 12:00 to 4:00 EST so I'm sure that the closing price may be less firm (guesstimate or SWAG) for the I Fund based on the dollar exchange rates and the direction of the foreign markets. https://eresearch.fidelity.com/eresearc ... ours.jhtml

Good point.

[ValleyGirl]

Agree.