Mutual Fund Window Question

[Bubba]

Dear all,

Just a quick question about the mutual fund window. I haven't used it, but I'm considering doing so. My issue is that the fees are extremely high, which is why I haven't jumped at it yet. For the moment, I'm working on creating a very simple strategy that will (hopefully) provide for a great return. Either way, I will need to trade ETFs and not mutual funds. In looking here (https://www.tsp.gov/publications/tspfs28.pdf) and (https://www.tsp.gov/new-tsp-features/su ... f-changes/) all they talk about are mutual funds.

The question is, may you trade in ETFs?

If so, what is the cost?

Also, does each purchase/sale constitute one move from your 2 monthly move allotment?

Please respond with experience or a link with info.

Thanks!

Bubba

[Bubba]

I'm curious to the few responses. Maybe no one uses the mutual fund window?

So, as an update, I e-mailed the TSP hotline. I asked some questions. Here are the most "interesting" questions and answers:

1. Can you provide me with a listing of the mutual funds available via the mutual fund window?

Ans: We do not a list that we can mail out to you. If you go to Tsp. gov and go to Fund options and then scroll down to Mutual fund window it will provide you with the information that we have available for the Mutual funds or you can call the Thriftline and be transferred to a financial advisor.

2. Can I buy ETFs with the mutual fund window?

Ans: We apologize for the inconvenience. We are unclear as to what you mean when you mention ETF'S if you could provide more information on that or you do have the option to call the Thriftline and we can transfer you to the investors that would be able to assist you.

After seeing the 2nd response...I filled with fear...

Have a great day.

Best,

Bubba

[Aitrus]

Bubba, most of us here have concluded that the mutual fund offerings by the TSP are not worth it.

Mostly we don't like them due to the costs associated. In addition to annual fees that are higher than the TSP's core Funds, there are fees are applied during every trade. It may be that there are mutual funds made up of ETFs, but you'd need to sift through the thousands of offerings to figure out which ones contain them.

Personally, I feel that the Mutual Funds are a sucker's bet that lobbyists / Blackrock instituted to make some extra money from the gullible. They're relying on people who listen to advisors like Dave Ramsey and Suze Orman who preach investing in mutual funds. People who are financially illiterate don't know the difference between indexes and mutual funds, and so look only for investment vehicles that sound familiar. Mutual funds have been preached for decades as the go-to vehicle, so that's what they've asked for - not realizing that they usually underperform index-based investing and have higher costs than necessary.

Dave and Suze often have good advice, but I wish they'd make one slight adjustment: index investing instead of mutual funds.

[Bubba]

Bubba, most of us here have concluded that the mutual fund offerings by the TSP are not worth it.

Mostly we don't like them due to the costs associated. In addition to annual fees that are higher than the TSP's core Funds, there are fees are applied during every trade. It may be that there are mutual funds made up of ETFs, but you'd need to sift through the thousands of offerings to figure out which ones contain them.

Personally, I feel that the Mutual Funds are a sucker's bet that lobbyists / Blackrock instituted to make some extra money from the gullible. They're relying on people who listen to advisors like Dave Ramsey and Suze Orman who preach investing in mutual funds. People who are financially illiterate don't know the difference between indexes and mutual funds, and so look only for investment vehicles that sound familiar. Mutual funds have been preached for decades as the go-to vehicle, so that's what they've asked for - not realizing that they usually underperform index-based investing and have higher costs than necessary.

Dave and Suze often have good advice, but I wish they'd make one slight adjustment: index investing instead of mutual funds.

Agreed. I thought it could be interesting, because I've developed investing models using ETFs that have a lower SD and higher CAGR than what's available via our usual funds. I had hoped this was an option. Either way, the fund window has been a massive disappointment. It also feels like they instituted the window to "claim" there were many more options. Sadly, that's not the case.

So, as a final update for those that might be interested, I received a note yesterday:

"Good Morning,

In the mutual fund window you can only purchase mutual funds.

Thank you,"

So there you go. No ETFs...

Also, after much Googling, I did find a place that provides info on the mutual funds:
https://www.tspfolio.com/mfw/mutualfundlist

I'm not sure of its veracity, but based on what I know of the site, it should be pretty credible.

Thanks again for responding.

Best,

Bubba

[Bubba]

Apologies for the double post, however, I think this question is interesting and not related to my previous points. The TSP presently costs 0.059 for the C fund. I checked and there are index funds (e.g. Schwab) that are 0.02. My question is, at what point, including the mutual fund window costs, is it more interesting to pay for those index funds than the TSP C fund (or other funds)? I'm not sure if anyone ever checked that out...