Huge news
Moderator: Aitrus
Huge news
Many of us have been asking for more investment options. Check this out
"A mutual-fund window has been discussed by the TSP and by at least some TSP investors for some time. When fully implemented, this window will be designed to allow TSP participants to invest in mutual funds offered on the platform used by the winning RKSA vendor. These mutual funds will be different from the 5 core TSP Funds that are now available to TSP investors."
https://www.fedsmith.com/2020/09/16/mor ... p-program/
"A mutual-fund window has been discussed by the TSP and by at least some TSP investors for some time. When fully implemented, this window will be designed to allow TSP participants to invest in mutual funds offered on the platform used by the winning RKSA vendor. These mutual funds will be different from the 5 core TSP Funds that are now available to TSP investors."
https://www.fedsmith.com/2020/09/16/mor ... p-program/
Re: Huge news
I'd rather have a 3rd legitimate move each month, or the option to pay for an ITF at a reasonable cost
No clue what I'm doing, but willing to learn.
Re: Huge news
I would prefer them if it could be iShares, but I'm thinking the Tsp isn't setup for ETFs.crondanet5 wrote:Blackrock funds no doubt.
Re: Huge news
LOL, the FRTIB has been talking about this for at least the past five years. Clearly don't have our best interest in mind and should all have been fired years ago. Thanks anyways for the post.
David Tepper - "There is a time to make money and a time to not lose money."
Warren Buffett - "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
Warren Buffett - "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
Re: Huge news
I read that the FRTIB wants to provide:TopNotch wrote:LOL, the FRTIB has been talking about this for at least the past five years. Clearly don't have our best interest in mind and should all have been fired years ago. Thanks anyways for the post.
ESG
Real Estate
Emerging Markets
I would be interested to see if that's all they would offer, but if this "window" does become something, maybe they could offer sector funds too. Of course we would have to see if they would allow the usual 2 moves p/month. I'm guessing that the mutual funds would have to be held for 30 days.
Anyways, we'll see, as you said. I found them talking about it all the way back to 2015.
Thanks,
Bubs
Re: Huge news
Just got this from the FRTIB website:
"Mutual Fund Window
In 2013, to examine the benefits of and concerns with a MFW, the FRTIB
assembled a cross-functional team with representation from its operations, legal,
investment, finance, communications, research, and technology offices. The team
presented its findings on industry offerings, participant interest, costs, and operational
considerations to the Board and ETAC in May 2014. However, there were two areas
where the TSP wanted to do additional research – doing a withdrawal survey and
researching the feasibility of screening the funds offered via the MFW.
In 2014, FRTIB conducted a survey of participants who made post-separation or
age-based withdrawals, in order to better understand the reasons funds are withdrawn
from the Plan. The findings of this survey supported our thesis that one of the reasons
participants withdraw funds from the Plan when eligible is to achieve greater investment
diversification. This finding supports the Agency’s proposal to add a mutual fund window
to the Plan. We also learned that financial need and/or desire for withdrawal flexibility
were the other significant contributors to age-based and post-separation withdrawals.
The FRTIB also conducted additional research on the impact and implications of
screening the number and type of funds that might be made available in the MFW.
Screens might be based on the cost or type of funds. We determined that filters may be
added to the platforms, but would likely cause a significant reduction in the number of
funds available (i.e. limiting access to SRI, emerging managers and sector funds). The
Board requested that further research be performed on the costs of a mutual fund
window, both for implementation and maintenance.
Additional research determined that implementation costs would be roughly $6-
10 million and on-going costs would be roughly $1 million. In July of 2015, the Executive
Director recommended to the Board Members that a mutual fund window be added to
the TSP. The Board concurred, with the understanding that if the Agency’s
understanding of the costs of implementation or maintenance changed significantly that
the Agency would provide that information to the Board before proceeding.
The FRTIB is in the procurement process currently that will yield a new TSP
record keeper, as well as a MFW provider. We currently anticipate a contract award by
October 2020 with full implementation by September 2022."
https://www.frtib.gov/ReadingRoom/Congr ... t_2019.pdf
The breakdown is that we should know by the end of next month who this vendor would be. Kind of neat to communicate about it on our board just a month before this is known (assuming the don't wait additional months to tell us).
I like that they also mentioned sector funds, but I suspect they are referring only to REIT funds. Either way, this would be a huge improvement.
Best,
Bubs
"Mutual Fund Window
In 2013, to examine the benefits of and concerns with a MFW, the FRTIB
assembled a cross-functional team with representation from its operations, legal,
investment, finance, communications, research, and technology offices. The team
presented its findings on industry offerings, participant interest, costs, and operational
considerations to the Board and ETAC in May 2014. However, there were two areas
where the TSP wanted to do additional research – doing a withdrawal survey and
researching the feasibility of screening the funds offered via the MFW.
In 2014, FRTIB conducted a survey of participants who made post-separation or
age-based withdrawals, in order to better understand the reasons funds are withdrawn
from the Plan. The findings of this survey supported our thesis that one of the reasons
participants withdraw funds from the Plan when eligible is to achieve greater investment
diversification. This finding supports the Agency’s proposal to add a mutual fund window
to the Plan. We also learned that financial need and/or desire for withdrawal flexibility
were the other significant contributors to age-based and post-separation withdrawals.
The FRTIB also conducted additional research on the impact and implications of
screening the number and type of funds that might be made available in the MFW.
Screens might be based on the cost or type of funds. We determined that filters may be
added to the platforms, but would likely cause a significant reduction in the number of
funds available (i.e. limiting access to SRI, emerging managers and sector funds). The
Board requested that further research be performed on the costs of a mutual fund
window, both for implementation and maintenance.
Additional research determined that implementation costs would be roughly $6-
10 million and on-going costs would be roughly $1 million. In July of 2015, the Executive
Director recommended to the Board Members that a mutual fund window be added to
the TSP. The Board concurred, with the understanding that if the Agency’s
understanding of the costs of implementation or maintenance changed significantly that
the Agency would provide that information to the Board before proceeding.
The FRTIB is in the procurement process currently that will yield a new TSP
record keeper, as well as a MFW provider. We currently anticipate a contract award by
October 2020 with full implementation by September 2022."
https://www.frtib.gov/ReadingRoom/Congr ... t_2019.pdf
The breakdown is that we should know by the end of next month who this vendor would be. Kind of neat to communicate about it on our board just a month before this is known (assuming the don't wait additional months to tell us).
I like that they also mentioned sector funds, but I suspect they are referring only to REIT funds. Either way, this would be a huge improvement.
Best,
Bubs
Re: Huge news
Bubs, thanks for all of that info. I'm a big fan of sector investing. If they pick Fidelity that would be great as I feel that Fidelity has some of the best sector mutual funds and ETFs.
David Tepper - "There is a time to make money and a time to not lose money."
Warren Buffett - "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
Warren Buffett - "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
Re: Huge news
I would love Fidelity, but they're nasty about the 30 day holding period. Nonetheless, they're a great choice (and my broker too).TopNotch wrote:Bubs, thanks for all of that info. I'm a big fan of sector investing. If they pick Fidelity that would be great as I feel that Fidelity has some of the best sector mutual funds and ETFs.
Re: Huge news
Bubba, i thought the holding period restriction only applies to mutual funds?Bubba wrote:
I would love Fidelity, but they're nasty about the 30 day holding period. Nonetheless, they're a great choice (and my broker too).
Re: Huge news
They're calling it a "mutual fund window," so I'm making the assumption that they will make mutual funds available, but with stipulations. We can get away with 2 moves p/month in index funds, which I suspect is unusual in comparison to other plans (note that I'm not referring to plans that make use of ETFs). For that reason, I don't expect them to allow 2 moves a month in the new mutual funds they will offer. Of course, what do I know? Maybe I'm wrong? There is the other side of the coin that if they offer funds to us that aren't offered to others, then the 2 moves p/month could be allowed because the costs would be much lower (due to capital gains taxes, etc.).bloobs wrote:Bubba, i thought the holding period restriction only applies to mutual funds?Bubba wrote:
I would love Fidelity, but they're nasty about the 30 day holding period. Nonetheless, they're a great choice (and my broker too).
We should know by the end of October who the provider will be of the mutual funds. I'm sure it'll take several months for them to announce what funds would be available. I've seen some documentation mention sector funds and others REITs, ESGs and emerging markets. We'll see. If I had my pick, I would really want sector funds. That would be a game changer for the TSP.
I'm thinking some years after that they would relax the whole idea and include additional funds and/or ETFs. That's a long way down the road though, maybe 5 to 10 years.
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