F Fund Results 9/20/11

[goldenyears]

I am hoping someone can answer my question. According to the TSP website, on the Fund Comparison Matrix page, the objective of the F Fund is "To match the performance of the Barclays Capital U.S. Aggregate Bond Index." Yesterday, 9/20/11, at the 4PM EDT closing, Barclays Index was up 0.22. TSP showed a loss of 0.0110. There is either something I do not understand or this is a serious discrepancy. Look forward to your feedback.

 

[RealMoneyIssues]

Take a quick look at a few of the threads below this one you created...

http://www.tsptalk.com/mb/showthread.php?9795-F-fund

http://www.tsptalk.com/mb/showthread.php?6557-F-fund-vs-AGG

Among others.

Once you read those (as they, in total, cover your question), then ask in those threads if it's unclear. Otherwise, someone might be nice and answer your question again here...

 

[goldenyears]

Thanks, RealMoney. I am new at this stuff. From what you sent me it looks like the F Fund tracks some mysterious funds that are a secret to the shareholders. This account along with others is managed by BlackRock Institutional Trust Co, N.A. I wonder who oversees them. It just seems strange to me that the TSP website says this fund matches Barclays. At least some sort of rewording on the TSP website seems in order. I guess when you enter the F Fund you do so on blind faith.

 

[RealMoneyIssues]

Thanks, RealMoney. I am new at this stuff. From what you sent me it looks like the F Fund tracks some mysterious funds that are a secret to the shareholders. This account along with others is managed by BlackRock Institutional Trust Co, N.A. I wonder who oversees them. It just seems strange to me that the TSP website says this fund matches Barclays. At least some sort of rewording on the TSP website seems in order. I guess when you enter the F Fund you do so on blind faith.

Unfortunately, it does seem that way. As soon as the folks that have been here for a long time wake up, they can clarify; but I think you got the gist...

Try reading up on the I fund... that one is horribly "adjusted" with the FV crap... I don't use I at all because of it.

 

[goldenyears]

Thanks again, RealMoney. I really appreciate your feedback. I wonder too if anyone has ever addressed this issue directly with the TSP Service Office?

 

[nnuut]

Bond Markets close at 3:00PM EST but the charts keep going for after hours trading that doesn't count for the day, this and the Fair Value make it difficult to relate the end of day prices with the settle in TSP. Just my thoughts I'm NO EXPERT on the "F" Fund.

 

[Frixxxx]

From the F Fund Fact Sheet available on tsp.gov:

BlackRock’s U.S. Debt IndexFund —​

The F Fund is invested in the U.S. Debt Index Fund. Because the U.S. Aggregate Index contains such a largenumber of securities, it is not feasible for the U.S. Debt Index Fund to invest in each security in the index. Instead, BlackRock selects a large representative sample of the various types of mortgage-backed, U.S. Government, corporate, and foreign government securities included in the overall index. Within each sector, BlackRock selects securities that, as a whole, are designed to match important index characteristics such as duration, yield, and credit rating. The performance of the U.S. Debt Index Fund is evaluated on the basis of how closely its returns match those of the U.S. Aggregate Index.​

They don't match for that reason. Hope this helps!
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[goldenyears]

Thank you both, nnuut and Frixxxx. This is my first time in the F Fund and I had tracked it for awhile before I got in. I never saw such wide swings when I was tracking it. The other funds I was in are still a little wobbly for me. It's hard to make buck these days.

 

[tsptalk]

Thanks for helping folks! They pretty much covered it. Let me add that I look at it as: the international stock markets and the bond market close before the EFA and AGG are closed for trading so the TSP has to make some decisions. Especially if there are big moves late in the trading day. Any share price "guesses" that are off have to get readjusted so the next share price may look a little out of whack. In the long run it all seems to work out but I'm sure someone, somewhere is benefitting from this situation.

By the way, welcome goldenyears!

 

[goldenyears]

Thank you too, tsptalk. Everyone has been nice to me and I appreciate it.