How to represent total U.S. market capitalization in TSP

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Blue_Radio
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Joined: Fri May 05, 2023 10:36 am

How to represent total U.S. market capitalization in TSP

Post by Blue_Radio »

I think others might have posted similar data in the past. If so, consider this an update...

I recently rebalanced my TSP account, and in doing so, I allocated dollars between the C and S Funds to collectively represent the total US market capitalization and in the correct proportion between large-, mid- and small-cap companies. I did this by allocating $1 of S Fund to every $6.06 of C Fund. Here's why:

The C Fund is based on the S&P 500 Index (large-cap). The S Fund is based on the Dow Jones U.S. Completion Total Stock Market Index (mid- and small-cap). In trillions of dollars (T), the market capitalizations for these indices are $44.35T and $7.32T, respectively. The ratio of these numbers is 6.06.

The capitalization data for the indices are at the following links:

https://www.spglobal.com/spdji/en/indic ... -500/#data
https://www.spglobal.com/spdji/en/indic ... ndex/#data
Last edited by Blue_Radio on Mon May 20, 2024 6:38 pm, edited 1 time in total.

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Aitrus
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Re: How to represent total U.S. market capitalization in TSP

Post by Aitrus »

Hey, BR. Your numbers seem pretty good.

Various sources, from Dave Ramsey to Motley Fool, have advised a heavier allocation towards C if one is trying to reflect the US market. As I recall, Ramsey's advice is something like 60/40 C and S for an ideal long-term high-risk growth portfolio using the TSP Funds only.
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Blue_Radio
Posts: 7
Joined: Fri May 05, 2023 10:36 am

Re: How to represent total U.S. market capitalization in TSP

Post by Blue_Radio »

Thanks! I was just passing along info I though others might find useful.

I agree there are other valid allocations between the C and S Funds, depending on one's objective. Willing to take more risk for growth? Yup -- dial-up your S Fund allocation.

My objective was to mimic a total market ETF, such as Vanguard’s Total Stock Market ETF (ticker VTI) for use in a classic Boglehead three-fund portfolio. Based on the market capitalization argument above, this means a mix of 85.8% C Fund and 14.2% S Fund = VTI... because 85.8/14.2 is nearly equal to 6.06.

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Fund Prices2024-11-07

FundPriceDayYTD
G $18.63 0.01% 3.74%
F $19.62 0.70% 2.08%
C $94.16 0.75% 26.62%
S $93.11 0.36% 20.77%
I $43.87 1.05% 9.18%
L2070 $10.70 0.79% 6.97%
L2065 $18.05 0.79% 19.41%
L2060 $18.05 0.79% 19.41%
L2055 $18.06 0.79% 19.41%
L2050 $35.66 0.70% 16.51%
L2045 $16.19 0.67% 15.71%
L2040 $58.84 0.63% 14.92%
L2035 $15.45 0.58% 14.01%
L2030 $51.16 0.53% 13.10%
L2025 $13.82 0.29% 8.74%
Linc $26.82 0.26% 7.67%

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