Any advantage to using a daily rebalanced fund?

[dtech77]

I’m looking for a 30/70 allocation like the L2020 funds. However, I don’t like the 4% S and 10% I allocation in L2020. Hence, I’m creating a modified L2020 allocation to be 64%G, 6%F, 15%C, 10%S and 5%I.

Is there any advantage to using the L2020 funds because it balances the allocation every day? If I balance my TSP allocation to be my modified L2020 funds
twice a month, would this be to a lesser advantage than a daily rebalacing?

Thank you.

 

[nasa1974]

You could do a daily rebalance by using the <1% move. The first two moves would be your normal IFT's and you would be out of IFT's for the month if you wanted to make a major change. Your rebalance would also depend on your allocations and what funds they are distributed to.

 

[tsptalk]

You could do a daily rebalance by using the <1% move. The first two moves would be your normal IFT's and you would be out of IFT's for the month if you wanted to make a major change. Your rebalance would also depend on your allocations and what funds they are distributed to.

Good answer nasa! Here's a link to how that works...

https://www.tsptalk.com/mb/members-account-talk/7825-less-than-1-percent-option-read-only.html

 

[dtech77]

Thank you for your prompt reply. Just to make sure that I understand your recommendation. I would do a <1% ITF twice a month (1st and 16th of the month) since each <1% move counts as an ITF. Though with the ~15 day interval, the changes in the percentage may be >1%.

Hence, I might as well just reset the allocation to my target allocation at the 1st and 16th of each month.

 

[nasa1974]

Thank you for your prompt reply. Just to make sure that I understand your recommendation. I would do a <1% ITF twice a month (1st and 16th of the month) since each <1% move counts as an ITF. Though with the ~15 day interval, the changes in the percentage may be >1%.

Hence, I might as well just reset the allocation to my target allocation at the 1st and 16th of each month.

You could do a <1% move every other day if you wanted to. Just remember if you do that then you will have used up your 2 IFT's within the first week of the month. Or you could use your IFT's on the 1st and 16th of the month to rebalance after your allocation and then do the <1% the 18th through the end of the month.

 

[tsptalk]

You could do a <1% move every other day if you wanted to.

Is it every day, or every other day? I never tried it.

 

[nasa1974]

You can do it every day if you wanted to.