Should TSP Invest in Real Estate Fund?

[Aggie76]

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http://www.fendonline.com/

Several key members of the House Government Reform Committee have asked the chairman of the Federal Retirement Thrift Investment Board (FRTIB) to look into the possibility of adding a Real Estate Investment Trust (REIT) index fund to the Thrift Savings Plan (TSP). Congressman Thomas M. Davis, R-Va., John Porter, R-Nev., Henry Waxman, D-Calif., and Danny Davis, D-Ill., have called on FRTIB Chairman Andrew Saul to retain a professional investment consultant as soon as possible to look at adding the fund. Under the legislation creating TSP, only Congress has the power to add funds. The congressmen have asked that the consultant look into not only REITs, but also Treasury inflation-protected securities, emerging market equities, growth and value indexes, commodities and high-yield debt.

 

[Birchtree]

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If they end up adding all those various investment alternatives - you'll really be able to separate the boys from the men. The more choices the more complications one has to deal with in making the correct decisions - there are still too many people even today sitting in the shelter of the infamous G fund. JMHO.

 

[mlk_man]

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I'm sure fees would increase also. But still would be a nice alternative. Personally, I'd add it and get rid of the "I" fund................:^

 

[Pete1]

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Yes, TSP should add a REIT index and all of the other options mentioned above.

 

[Guest]

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FYI
Here's a copy of an old post on the topic and here's a link to the whole thread > http://www.tsptalk.com/mb/view_topic.php?id=1797&forum_id=22&jump_to=24074#p24074

I listened to both the Federal News radio program on the interview with Gary Amelio and the C-Span interview. I thought peeps might be interested in some of these statements that were made:

Federal News radio
We (TSP board) have tested and found there are only 142 participants that move funds more than twice a week and they lose money doing this. We do not feel we have a problem with frequent movers of funds. We call them "day traders."

We are not recommending to Congress the addition of a REITS Fund. The C and the S Funds already have Reits in them and we currently are the 13th largest holder of REITS in the country.

The L Funds will be ready for implementation in July or August.

C-Span
There are 3.4 million participants. Barclays in San Fransico won the last competitive bid to manage the 4 Funds for a 4 year period which will be re-bid next year. The G Fund is managed by the government. Congress selects the funds through statute and defines the broad-based indexes. The board monitors that the statutes are implemented and followed.

TSP expenses are paid 100% by the participants. The TSP is the world's cheapest legal investment.

By the end of 2005, it is anticipated that the administrative expenses for TSP will be .50 per $1000 invested or 5 basis points which is "netted out daily."

PS However, I don't know if we can trust the public statements of the board.