Changes coming to the L- Funds

[tsptalk]

Changes coming to the Lifecycle (L) Funds

Changes coming to the Lifecycle (L) Funds — (November 29, 2018) We are planning adjustments to the L Funds in an effort to improve your investment outcomes. Effective in January 2019, we will increase exposure to international stocks (the I Fund) from 30% to 35% of the overall stock allocation in all L Funds. The L Income Fund stock allocation (C, S, and I Funds combined) will increase from 20% to 30% over a period of up to 10 years. The L 2030, L 2040, and L 2050 overall stock allocations will hold steady for a period of years before resuming their transitions from stocks to bonds. In addition to improving investment outcomes, this pause will align the L 2030, L 2040, and L 2050 Funds with the L 2060 Fund, which will be introduced in 2020 with an initial stock allocation of 99%. Visit Lifecycle Funds to learn more.

https://www.tsp.gov/whatsnew/Content/index.html#lifecyclechanges

 

[James48843]

I read their discussions a couple of weeks ago on this subject. I’m not sure THEY- the FTRIB, actually fully understand the L-Fund concepts and what they are trying to do. Some of what I read was that they decided to change the makeup the makeup in order to put more stocks in the portfolio earlier- hence the 99% stocks to begin with in that L-2060 to be. And more “I”, because they think that foreign stocks ought to have a bigger part.

They are correct that foreign stocks DO play a bigger part now in the world overall. However, the current “I” fund ONLY represents the developed world, and not emerging markets. And I is overweighted in Japan, and has no exposure to mainland China, India, or any number of Asian emerging markets.

Unfortunately, there isn’t a good world-wide fund index yet that adequately reflects the entire world, while also being large enough to represent TSP investors.


I need to work on developing that fund someday....


Sent from my iPhone using TSP Talk Forums

 

[Valkyrie]

I read their discussions a couple of weeks ago on this subject. I’m not sure THEY- the FTRIB, actually fully understand the L-Fund concepts and what they are trying to do. Some of what I read was that they decided to change the makeup the makeup in order to put more stocks in the portfolio earlier- hence the 99% stocks to begin with in that L-2060 to be. And more “I”, because they think that foreign stocks ought to have a bigger part.

They are correct that foreign stocks DO play a bigger part now in the world overall. However, the current “I” fund ONLY represents the developed world, and not emerging markets. And I is overweighted in Japan, and has no exposure to mainland China, India, or any number of Asian emerging markets.

Unfortunately, there isn’t a good world-wide fund index yet that adequately reflects the entire world, while also being large enough to represent TSP investors.


I need to work on developing that fund someday....


Sent from my iPhone using TSP Talk Forums

I fund is a joke since it is tied to the highly volatile dollar movements. all to make their fund managers very wealthy and tsp members not.