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 Prices2024-11-12

FundPriceDayYTD
G $18.65 0.05% 3.80%
F $19.52 -0.71% 1.55%
C $94.36 -0.19% 26.88%
S $94.25 0.53% 22.25%
I $42.75 -1.60% 6.40%
L2070 $10.63 -0.58% 6.31%
L2065 $17.94 -0.58% 18.67%
L2060 $17.94 -0.58% 18.67%
L2055 $17.95 -0.58% 18.68%
L2050 $35.47 -0.52% 15.88%
L2045 $16.11 -0.49% 15.12%
L2040 $58.57 -0.46% 14.38%
L2035 $15.39 -0.42% 13.52%
L2030 $50.96 -0.37% 12.66%
L2025 $13.79 -0.19% 8.54%
Linc $26.78 -0.16% 7.51%

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