labor day F-fund fiasco

[Griffin]

At least ten of us posting moves, moved in all or part to the F-fund. The fund as reported by at least a dozen different sites all showed the AGG (which is the ishares version of the F-fund and attempts to mirror the exact same index as the F-fund) as closing on Thursday at 99.55. However, on Friday morning the fund opened on all the sites at 99.15, with many of these sites showing the previous close at 99.15 (i.e. someone screwed up some database and changed the previous close price). Therefore, the AGG showed positive all day as it moved up and back down, finally closing at 99.17 - a price difference of .02 for a total gain for the day (from open to close) of .02%. However, the F-fund moved up a penny for a GAIN of .09%. This I can not figure out.....how could they bump the fund up after such a poor performance, even if they did not catch the previous close error? This is piss poor quality control on the part of TSP.

Now, what is the real sticking point of this whole deal is that (as reported by Reuters and a couple other sites) the AGG actually dropped by .38% (99.55 to 99.17). Will TSP go back and adjust the price for Friday, or will they try to cover the mistake on Tuesday by factoring todays drop then? In the later case, anyone who moved into the F fund today (Friday) would be out .47% as a result of this error.

 

[Show-me]

Griffin,

I have a horrible memory but I do remember an adjustment the the tsp.gov did within the last year to a fund. Don't know for what reason, it may have just been an share price human error.

Maybe if one of us that is articulate could draft a short protest with a link to your reference. We can copy and paste an email to tsp.gov. Squeaky wheel gets the oil.

 

[nnuut]

I believe the "F" fund uses a form of Fair Value like the "I" Fund, if you check it out on winning days that are less than .09% we get nothing, but may FV it at a future time. I always wondered what they did with the extras. Some days the fund may make, like .12% and they give is .09, a penny, do they ever make it up?

 

[fabijo]

If you go to stockcharts.com and look at stock symbol:
$BNDUS
You will see that bonds were up on Friday. AGG is a stock that tries to track the bond market, so its price will also be determined by stock traders buying and selling. Over the long term, the charts will be similar, but day to day price changes will not be exact between the actual bonds and the AGG stock.

Another place to look for the closing price of the Lehman Index is from their website:
http://www.lehman.com/LL_S/public/publicsite/bondindex.html

There, you'll see under the U.S. and Canadian Indices that the U.S. Aggregate was up 0.07% Friday.

 

[Griffin]

If you go to stockcharts.com and look at stock symbol:
$BNDUS
You will see that bonds were up on Friday. AGG is a stock that tries to track the bond market, so its price will also be determined by stock traders buying and selling. Over the long term, the charts will be similar, but day to day price changes will not be exact between the actual bonds and the AGG stock.

Fabijo,

I appreciate the link. I don't watch the f-fund that closely, but it always seemed that the AGG and F-fund operated within a +/- .10% of each other. I had not realized that the AGG had a speculation component.

However, I 'm still not convinced that the odditity's with the pricing posted on the internet and the unusally large discrepency between the AGG and the F-fund are merely coincidence. What I can conclude from this is that TSP basis there numbers off of what Lehman Brother's generates. So I recind my earlier statement about incompetence at TSP.

This is a big help. Thanks.

 

[Wheels]

I believe the "F" fund uses a form of Fair Value like the "I" Fund, if you check it out on winning days that are less than .09% we get nothing, but may FV it at a future time. I always wondered what they did with the extras. Some days the fund may make, like .12% and they give is .09, a penny, do they ever make it up?

Nnuut. This is simple rounding. The fund can only go up or down in increments of 1 cent. So yes it always gets made up (or as close as they can come).

 

[nnuut]

Yes AGG was +.02 Sept 1st and we got a penny +.09. Maybe FV wasn't what happened but there was a carry over from the previous days gains. Yes should have called it something else, but wasn't it fair?

 

[SkyPilot]

I despise the F fund...

 

[nnuut]

Likewise, always have, but I think it's probably because I really don't quite understand how it works in relation to stocks. I KNOW, it's simple but when you're simple minded sometimes the reasoning escapes you. I never seem it be able to figure out what the "F" is going to do next, erratic is the word.

 

[The_Technician]

At least ten of us posting moves, moved in all or part to the F-fund. The fund as reported by at least a dozen different sites all showed the AGG (which is the ishares version of the F-fund and attempts to mirror the exact same index as the F-fund) as closing on Thursday at 99.55. However, on Friday morning the fund opened on all the sites at 99.15, with many of these sites showing the previous close at 99.15 (i.e. someone screwed up some database and changed the previous close price). Therefore, the AGG showed positive all day as it moved up and back down, finally closing at 99.17 - a price difference of .02 for a total gain for the day (from open to close) of .02%. However, the F-fund moved up a penny for a GAIN of .09%. This I can not figure out.....how could they bump the fund up after such a poor performance, even if they did not catch the previous close error? This is piss poor quality control on the part of TSP.

Now, what is the real sticking point of this whole deal is that (as reported by Reuters and a couple other sites) the AGG actually dropped by .38% (99.55 to 99.17). Will TSP go back and adjust the price for Friday, or will they try to cover the mistake on Tuesday by factoring todays drop then? In the later case, anyone who moved into the F fund today (Friday) would be out .47% as a result of this error.

The AGG paid a dividend of $0.393 on Friday morning, the result was the AGG which closed $19.55 on Thursday, opened 0.39 cents lower on Friday.....19.15 or so.....

 

[Show-me]

The AGG paid a dividend of $0.393 on Friday morning, the result was the AGG which closed $19.55 on Thursday, opened 0.39 cents lower on Friday.....19.15 or so.....

Aha! Seems like we talked about this before because your explanation rung a bell. Thanks Tech!

 

[Griffin]

The AGG paid a dividend of $0.393 on Friday morning, the result was the AGG which closed $19.55 on Thursday, opened 0.39 cents lower on Friday.....19.15 or so.....

That's good to know...based on this, then I do not have to fear some kind of price adjustment coming down tonight...other then the days action.

Thanks Tech.

 

[airlift]

At least ten of us posting moves, moved in all or part to the F-fund. The fund as reported by at least a dozen different sites all showed the AGG (which is the ishares version of the F-fund and attempts to mirror the exact same index as the F-fund) as closing on Thursday at 99.55. However, on Friday morning the fund opened on all the sites at 99.15, with many of these sites showing the previous close at 99.15 (i.e. someone screwed up some database and changed the previous close price). Therefore, the AGG showed positive all day as it moved up and back down, finally closing at 99.17 - a price difference of .02 for a total gain for the day (from open to close) of .02%. However, the F-fund moved up a penny for a GAIN of .09%. This I can not figure out.....how could they bump the fund up after such a poor performance, even if they did not catch the previous close error? This is piss poor quality control on the part of TSP.

Now, what is the real sticking point of this whole deal is that (as reported by Reuters and a couple other sites) the AGG actually dropped by .38% (99.55 to 99.17). Will TSP go back and adjust the price for Friday, or will they try to cover the mistake on Tuesday by factoring todays drop then? In the later case, anyone who moved into the F fund today (Friday) would be out .47% as a result of this error.

I need some help in understandic the rationale of the F fund vs. the G fund. I will appreciate your thoughts on how to play the F vs. the G funds. I ususally go into G for safety, because it is almost cash, but I guess I don't understand the rationale for choosing one over the other. Is there a rule of thumb, such as going into F when interest rates are rising or declining? I am aware of all of the problems unvolved in the F thread. Thank you in advance!

 

[Griffin]

I need some help in understandic the rationale of the F fund vs. the G fund. I will appreciate your thoughts on how to play the F vs. the G funds. I ususally go into G for safety, because it is almost cash, but I guess I don't understand the rationale for choosing one over the other. Is there a rule of thumb, such as going into F when interest rates are rising or declining? I am aware of all of the problems unvolved in the F thread. Thank you in advance!

I have no real knowledge of the F fund, I can only tell you what my experiences with it has been. My reasons for using the F-fund this year, stemmed from a refusal to believe that it could keep going lower, (I was wrong). When interest rates are going up - the F-fund is going down and vise versa. There is no bottom to this sucker.

Read what Show-me wrote in his thread today, I think he very effectively hit the nail on the head.

I did have a couple of good runs with the F. Basically you have to catch it right after it has taken a nice nose dive to get anything out of it. What I have concluded is never go straight from stocks to bonds (I just did the same thing again because of the dividend fiasco), when the market tops, go G, and wait for a couple of down days to let it bottom out in it's channel, then, use it.

 

[James48843]

I need some help in understandic the rationale of the F fund vs. the G fund. I will appreciate your thoughts on how to play the F vs. the G funds. I ususally go into G for safety, because it is almost cash, but I guess I don't understand the rationale for choosing one over the other. Is there a rule of thumb, such as going into F when interest rates are rising or declining?

My rule of thumb and experience is that when interest rates are generally falling, the "F" fund returns are HIGHER that normal returns for the "F" Fund, and that the "F" fund generally is higher return than the "G".

When interest rates are RISING, then the "F" fund takes a hit and generally does NOT return better- in fact it's losses can be significant.

But even then, "F" moves are LESS radical than stocks.

So- here is what works for me (more or less):


IN an interest rate FALLING environment- I use the "F" fund as my parking account, and seem to pick up better than "G" fund returns.

In an interest rate RAISING environment- I use the "G" fund as my parking account, as the "F" seems to loose money as well.

In an interest rate NEUTRAL environment- I may use both a "F" component and a "G" component to be my "parking fund".

Right now I am using both- as I term what we are in as a generally neutral environment- the FED having stopped raising interest rates for now.

Hopes that makes sense.

 

[airlift]

It makes quite a lot of sense! Thank you.

My rule of thumb and experience is that when interest rates are generally falling, the "F" fund returns are HIGHER that normal returns for the "F" Fund, and that the "F" fund generally is higher return than the "G".

When interest rates are RISING, then the "F" fund takes a hit and generally does NOT return better- in fact it's losses can be significant.

But even then, "F" moves are LESS radical than stocks.

So- here is what works for me (more or less):


IN an interest rate FALLING environment- I use the "F" fund as my parking account, and seem to pick up better than "G" fund returns.

In an interest rate RAISING environment- I use the "G" fund as my parking account, as the "F" seems to loose money as well.

In an interest rate NEUTRAL environment- I may use both a "F" component and a "G" component to be my "parking fund".

Right now I am using both- as I term what we are in as a generally neutral environment- the FED having stopped raising interest rates for now.

Hopes that makes sense.

 

[The_Technician]

In a note to all who play the F fund....it pays a dividend on the first of the month, that is, the first day of the month that falls on a business day.....

Hope that helps you Nnuut....

 

[airlift]

Thanks Tech! I am relatively new to this site, but I have read references yo Carnac's corner and to waiting in the G fund for the next penny, next Tuesday. Can you please post some sort of explanatory post that explains when the F and G funds pay the respective dividends? Thanks! --

In a note to all who play the F fund....it pays a dividend on the first of the month, that is, the first day of the month that falls on a business day.....

Hope that helps you Nnuut....

 

[nnuut]

In a note to all who play the F fund....it pays a dividend on the first of the month, that is, the first day of the month that falls on a business day.....

Hope that helps you Nnuut....

Actually not a bit! Sorry Tech, I've tried following your advise on the "F" before and didn't have much luck, old buddy!

 

[airlift]

Thanks for your views! --

Actually not a bit! Sorry Tech, I've tried following your advise on the "F" before and didn't have much luck, old buddy!