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TSP conversion
Posted: Fri May 19, 2017 9:09 pm
by Jokerswild
Can anyone help me understand the mathematical conversion from the index stocks to the TSP funds? For example, as of closing today the S and the C funds according to tspcenter match the exact percentage of gains to the Dow and S&P respectively. However, the F fund says it went down .04% but the index shows it closed out at zero. I know which index moves each fund, but what is the mathematical conversion?
Re: TSP conversion
Posted: Fri May 19, 2017 9:53 pm
by usps2013
The public funds are an approximation.
Re: TSP conversion
Posted: Fri May 19, 2017 10:57 pm
by mjedlin66
It doesn't work that way. An index is just a weighted list of companies. Tradeable funds attempt to mimic the index. When they do this, they sometimes have to buy a little more of one company and a little less of the other than the index suggests. So the TSP funds are not exactly matched to the indexes they attempt to mimic. Also, the I fund has currency conversion rates and a certain amount of hand waiving magic involved. The I fund diverges from its index the most of all of them due to those extra factors.
Re: TSP conversion
Posted: Sat May 20, 2017 12:17 am
by Jokerswild
mjedlin66 wrote:It doesn't work that way. An index is just a weighted list of companies. Tradeable funds attempt to mimic the index. When they do this, they sometimes have to buy a little more of one company and a little less of the other than the index suggests. So the TSP funds are not exactly matched to the indexes they attempt to mimic. Also, the I fund has currency conversion rates and a certain amount of hand waiving magic involved. The I fund diverges from its index the most of all of them due to those extra factors.
Thanks. So the F fund of zero gains equals -.04% today... makes sense
I like the hand waiving magic though.
Re: TSP conversion
Posted: Sat May 20, 2017 1:54 am
by Five-O
Jokerswild wrote:mjedlin66 wrote:It doesn't work that way. An index is just a weighted list of companies. Tradeable funds attempt to mimic the index. When they do this, they sometimes have to buy a little more of one company and a little less of the other than the index suggests. So the TSP funds are not exactly matched to the indexes they attempt to mimic. Also, the I fund has currency conversion rates and a certain amount of hand waiving magic involved. The I fund diverges from its index the most of all of them due to those extra factors.
Thanks. So the F fund of zero gains equals -.04% today... makes sense
I like the hand waiving magic though.
LOL.