Silverbird
Well-known member
I frankly have no clue, that's why I jumped to G even though it meant I'm below 1% annual gains on my TSP account again (but I didn't fall into a hole).:embarrest:
-
The Forum works well on MOBILE devices without an app: Just go to: https://forum.tsptalk.com
-
Please read our AutoTracker policy on the IFT deadline and remaining active. Thanks!
div>
$ - Premium Service Content (Info) | AutoTracker Monthly Winners | Is Gmail et al, Blocking Our emails?
Find us on: Facebook & X | Posting Copyrighted Material
Join the TSP Talk AutoTracker: How to Get Started | Login | Main AutoTracker Page
The Forum works well on MOBILE devices without an app: Just go to: https://forum.tsptalk.com ...
Or you can now use TapaTalk again!F Fund where will it go ?
- Thread starter Braveheart
- Start date
poolman
Top Return 2008
There will be better possibilities IMO, Possibilities of One Day Hail Marie's within the month.
XL-entLady
Well-known member
Just a quick MB visit (I'm away from the internet tomorrow through Thursday, which may not be a bad thing
) but I'm wondering.
Everybody has a "deer in the headlights, can't look away" focus on the TSP equity funds. When equities funds tank is usually a great time to be in F Fund, especially with a rate cut on the horizon. Sometimes Corepuncher's 3-month F Fund candles look reasonable, depending on where the daily rollercoaster is. ("F Fund rollercoaster" - that phrase is just WRONG!)
So is F Fund worth a look? Or will the bail-out mess up the yields so much that the humble G penny is still the shiniest?
I'm getting tired of G but I don't think we're at bottom yet on the equity funds. I'm looking closely at F. But I don't want to move just for the sake of moving somewhere....
Thoughts?
Lady
Silverbird
Well-known member
I don't think either will move until the Libor moves.A question on where did the F Fund go?
Comparing F value (~4% haircut) to Lehman Agg Bond Index (15% haircut) over last 30 days there is a notable difference. Differences yesterday very distinguished.
Are these two indexes that disconnected??
Still trying to understand this fund...
Note: I held no position in F during this time (wary of corporate bond strength), just wondering why the large difference.
Thanks for any education on this that you can provide.
alevin
Well-known member
N answers for Babo but another question for F fund experts that goes along with q's I just posed to SB re I fund. Perhaps the AGG current discount (-8.86%) relative to underlying index has some relationship to the disconnect between F fund and Lehman index and defacto the answer to that q may help answer Babo's q?
iShares Lehman Aggregate Fund (AGG)Index ETF
Fund Quick Facts
As of 10/10/2008 Closing NAV:$96.99Current Distribution Rate:5.29%Closing Share Price:$88.40Premium/(Discount):-8.86%
http://http://www.etfconnect.com/select/fundpages/fixed_etf.asp?MFID=118409#Premium/Discount HistoryLast edited:
coolhand
Well-known member
XL-entLady
Well-known member
Thank you, Coolhand! Over the past few weeks, I've been overloading my frail brain trying to understand why F Fund was moving the way it was, and I wasn't making any headway.
It was easy to absorb the base facts: The F Fund is invested in the Barclays U.S. Debt Index Fund, which tracks the Lehman Brothers U.S. Aggregate (LBA) Index, and does so by purchasing shares of the Barclay's U.S. Debt Fund Index "E", which in turn holds shares of the Barclay's U.S. Debt Index Master Fund. The F Fund is invested in investment-grade fixed-income securities with maturities of more than one year, with a break-out of approximately 45% asset-backed securities, 35% government or government related securities, and 20% credit.
And I understand that in today's financial market, the 20% credit could fluctuate, and even the 45% asset-backed securities are only worth what current fair market value says they are. But I didn't think anyone would be doing a mark to market on them to account for some of the wild swings we're seeing.
So I read your linked article with great interest, especially the last part:
"Finally, this must be an embarassment to Barclays, which runs iShares. They have a large vested interest in making sure that investors don't come to view ETFs as having this type of NAV discount risk.
"This is an opportunity certainly for longer-term fixed-income investors (buying "the market" at a large discount), but it is certainly potentially an opportunity for a trader. Yes, in this crazy market, an anomaly that might ordinarily not persist for long could end up taking a while to reverse, but this one, given the redemption process, seems unlikely to endure.
"Disclosure: Long AGG"
Finally something that makes sense to me and explains what I'm seeing! And confirms something I was thinking of doing with my TSP account as well! Thanks again!
Lady
coolhand
Well-known member
Thank you, Coolhand! Over the past few weeks, I've been overloading my frail brain trying to understand why F Fund was moving the way it was, and I wasn't making any headway.
It was easy to absorb the base facts: The F Fund is invested in the Barclays U.S. Debt Index Fund, which tracks the Lehman Brothers U.S. Aggregate (LBA) Index, and does so by purchasing shares of the Barclay's U.S. Debt Fund Index "E", which in turn holds shares of the Barclay's U.S. Debt Index Master Fund. The F Fund is invested in investment-grade fixed-income securities with maturities of more than one year, with a break-out of approximately 45% asset-backed securities, 35% government or government related securities, and 20% credit.
And I understand that in today's financial market, the 20% credit could fluctuate, and even the 45% asset-backed securities are only worth what current fair market value says they are. But I didn't think anyone would be doing a mark to market on them to account for some of the wild swings we're seeing.
So I read your linked article with great interest, especially the last part:
"Finally, this must be an embarassment to Barclays, which runs iShares. They have a large vested interest in making sure that investors don't come to view ETFs as having this type of NAV discount risk.
"This is an opportunity certainly for longer-term fixed-income investors (buying "the market" at a large discount), but it is certainly potentially an opportunity for a trader. Yes, in this crazy market, an anomaly that might ordinarily not persist for long could end up taking a while to reverse, but this one, given the redemption process, seems unlikely to endure.
"Disclosure: Long AGG"
Finally something that makes sense to me and explains what I'm seeing! And confirms something I was thinking of doing with my TSP account as well! Thanks again!
Lady
You're welcome. Glad I could help.
alevin
Well-known member
Many thanks for the link, Coolhand. It sounds like people are sellng madly to raise cash to meet margin, or just simply cashing out because they're afraid of bond defaults, period. The key trend following indicator I've been using lately has kept me out of harms way the last few weeks, it's starting to change a little, indicating a risky very shortterm pop is setting up, maybe as soon as next week. I'm going to wait til I see the setup developing a little more definitively. The risk is lower than normal given the steep discount that's occurring-in AGG, and probably in F as well, which means I'll probably move in for the shortterm pop if I see clearer development of the indicator, which is a trend follower indicator-the ADX. But I would also likely bail within a day or 2 due to whipsaw potential.
View attachment 4872
When the ADX is over 40 and the DM- is headed up, you are in a strong downtrend. when the ADX and DM- are in strong downtrend and ADX is over 50 but starts to lose steam and turn down along with DM-that is-NOT the best time to jump in, but it IS a short-term risky opportunity because its moving down into whipsaw range between 40 and 20. As long as ADX is over 40 with DM- higher than DM+, danger, danger Will Robinson! :worried:
XL-entLady
Well-known member
Alevin, I've copied the above notes to my TSP OneNote workbook. Thanks for the information. ADX is one of those things that still feels arcane to me. You're so good!
LadyCoolhand,
Read over your link ref.. Thanks
Given F-value trends which have been dampened in mapping to the AGG, does this imply that TSP and/or Barclay's are already providing the missing arbitrage, possibly taking and paying the discount themselves ??
And/or possibly dividends explaining part of this??
Wondering if it means there is extra risk at this point for actual F fund, no effect, or there is less risk than current AGG prices suggest (i.e., is the NAV discount possibly not yet paid for in the TSP if bonds truly settle lower)?
coolhand
Well-known member
I'm no expert on bonds, but there was obviously some perceived risk by investors who wanted out at lower costs. There's also a shortage of cash to cover the difference. It's happening to other ETF bond funds as well. I would watch these for a possible entry, but since this is an unprecedented situation here, risk may be higher than we might think.
Here's another article. Hope it helps.
http://tinyurl.com/3rxjkx
XL-entLady
Well-known member
My two cents is that all bets are off on F Fund until we see how the bail-out is affecting bonds. I'm not sure anyone can call anything until then. But I could be so wrong!
LadyBraveheart
Member
Right now the FRTIB needs to explain how this fund is measured. We are now in a World Market so where the 10 Year Note moves is anyones guess but for now I would stay clear of this F Fund. The rates were to reset today at 1:00 PM EST from what I heard. What does that mean to the F Fund ----- If you don't know what is causing you to lose or make money stay away. Once again FRTIB needs to tell us what they are using the AGG is no longer accurate and won't be again. BEWARE !!!!!!!!!!!!!
XL-entLady
Well-known member
Oh-h-h-h. Ouch.
2Easy, You're the master, and yesterday you did it again! Congratulations!
So now I have to ask. Is your move a short term pop or will you park it for a while?
LadySimilar threads
