TSP SHARE PRICE

[MR CARLO]

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I was wondering if some could explain how TSP.GOV arrives a there price per share?

:dah:

 

[tsptalk]

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My guess is they go up and down based on the percentage gains of the indices they track. In the case of the I fund, it is the EAFE index inUS dollars.

 

[MR CARLO]

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Tom thanks,

I think I understand the I fund.

I wonder what indices they are following?

Must be a government secret!!!

 

[tsptalk]

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Here is more info on the funds ... [url]www.tsptalk.com/funds.html[/url]

 

[MR CARLO]

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[align=left][/align]
[align=left]This isthe answergot from TSP.GOV.[/align]
[align=left]OC 03-11 (8/2004)[/align]
[align=left]What is a “share”?[/align]
[align=left]A share is a unit of ownership in a[/align]
[align=left]company or fund. As a TSP participant,[/align]
[align=left]you own shares in the funds in which[/align]
[align=left]you are invested.[/align]
[align=left]The balances for each fund in your account[/align]
[align=left]are stated in shares as well as in[/align]
[align=left]dollar amounts. Each TSP fund has a[/align]
[align=left]different share price.[/align]
[align=left]How are daily share prices determined?[/align]
[align=left]At the end of each business day, each[/align]
[align=left]TSP fund is revalued. As a result, the F,[/align]
[align=left]C, S, and I Funds each have a new value[/align]
[align=left]that reflects the closing prices for that[/align]
[align=left]day’s stock and bond markets, minus the[/align]
[align=left]fund’s share of the TSP’s daily administrative[/align]
[align=left]expenses. Then a new share price[/align]
[align=left]is determined by dividing the fund’s new[/align]
[align=left]value by the total number of outstanding[/align]
[align=left]shares in the fund.[/align]
[align=left]Unlike the F, C, S, and I Funds, the[/align]
[align=left]G Fund is not affected by daily market[/align]
[align=left]volatility. Instead, it gains earnings[/align]
[align=left]through the constant accrual of interest.[/align]
[align=left]A new interest rate is determined at the[/align]
[align=left]beginning of each month by the U.S.[/align]
[align=left]Treasury. It takes several days for the[/align]
[align=left]fund to accrue enough interest to show a[/align]
[align=left]share-price increase.[/align]
[align=left]When do share prices change?[/align]
[align=left]Share prices are updated each business[/align]
[align=left]day at approximately 7:00 p.m., eastern[/align]
[align=left]time.[/align]
[align=left]Does the TSP use the new share[/align]
[align=left]prices for my daily transactions?[/align]
[align=left]Yes. Once the new daily share prices for[/align]
[align=left]each fund are established, they are applied[/align]
[align=left]to your account. Any transactions[/align]
[align=left]in your account on that day (that is, contributions,[/align]
[align=left]interfund transfers, loan disbursements[/align]
[align=left]and payments, withdrawals)[/align]
[align=left]are processed using the new share[/align]
[align=left]prices. (Your transactions must be accepted[/align]
[align=left]by 12:00 noon eastern time in[/align]
[align=left]order to be processed that night using[/align]
[align=left]that day’s new share prices.)[/align]
[align=left]Are the earnings for the TSP[/align]
[align=left]funds I’m invested in used to purchase[/align]
[align=left]additional shares in[/align]
[align=left]those funds?[/align]
[align=left]No. Because the increase or decrease in[/align]
[align=left]the value of a fund (that is, earnings) is[/align]
[align=left]reflected in the share price, earnings are[/align]
[align=left]not reported separately or used to purchase[/align]
[align=left]additional shares. An increase or decrease in[/align]
[align=left]the value of a fund does not affect the number[/align]
[align=left]of shares you own — just their value.[/align]
[align=left]Example:[/align]
[align=left]Number of Number of[/align]
[align=left]Shares Shares[/align]
[align=left]Purchased Purchased[/align]
[align=left]Contribution Share Before After[/align]
[align=left]Source Price Rounding Rounding[/align]
[align=left]Employee: $294.50 ÷ $10.43 = 28.23586 28.2359[/align]
[align=left]Agency[/align]
[align=left]Automatic[/align]
[align=left](1%): 58.90 ÷ 10.43 = 5.64717 5.6472[/align]
[align=left]Agency[/align]
[align=left]Matching: 235.60 ÷ 10.43 = 22.58869 22.5887[/align]
[align=left]Total: $589.00 56.4718[/align]
[align=left][/align]
[align=left]contribution to the C Fund is calculated by source,[/align]
[align=left]as described above. The sum of the rounded shares[/align]
[align=left]purchased through all three sources is 56.4718.[/align]
[align=left]This represents a difference of .0001 from the result[/align]
[align=left]you would get by simply dividing the participant’s[/align]
[align=left]total overall contribution ($589.00) by the share[/align]
[align=left]price (10.43) to arrive at 56.4717 ($589.00 ÷ $10.43[/align]
[align=left]= 56.47172 shares, rounded to 56.4717 shares).[/align]
[align=left]What is dollar-cost averaging?[/align]
[align=left]Dollar-cost averaging is a system of purchasing[/align]
[align=left]shares at regular intervals with a fixed dollar[/align]
[align=left]amount. The number of shares may change with[/align]
[align=left]each purchase, based on the share price at the time[/align]
[align=left]of purchase. The fixed dollar amount buys more[/align]
[align=left]shares when the share price is low and fewer shares[/align]
[align=left]when the share price is high. If you are investing[/align]
[align=left]regularly in the F, C, S, or I Funds through payroll[/align]
[align=left]deductions, you are already dollar-cost averaging.[/align]
[align=left]How does dollar-cost averaging benefit[/align]
[align=left]me?[/align]
[align=left]The example below illustrates how dollar-cost averaging[/align]
[align=left]benefits you.[/align]
[align=left]In this example, you made regular contributions of[/align]
[align=left]$200. Since there was a different share price each[/align]
[align=left]time you made a contribution, you received a different[/align]
[align=left]number of shares for each $200 contribution[/align]
[align=left]you made. With your four contributions, you invested[/align]
[align=left]a total of $800 and purchased a total of 24[/align]
[align=left]shares. Your average share price (that is, the sum of[/align]
[align=left]the four share prices divided by the number of contributions,[/align]
[align=left]or $150 ÷ 4) was $37.50. However, because[/align]
[align=left]of dollar-cost averaging, your cost per share was[/align]
[align=left]only $33.33 — the sum of your contributions divided[/align]
[align=left]by the number of shares you purchased ($800 ÷ 24).[/align]
[align=left]Contri- Investment Share Shares[/align]
[align=left]bution Amount Price Purchased[/align]
[align=left]1 $200 $50 4[/align]
[align=left]2 $200 $40 5[/align]
[align=left]3 $200 $20 10[/align]
[align=left]4 $200 $40 5[/align]
[align=left]Totals $800 $150 24[/align]
[align=left]• Average share price of the four contributions: $150 ÷ 4 = $37.50[/align]
[align=left]• Participant’s cost per share: $800 ÷ 24 = $33.33[/align]

 

[MR CARLO]

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I see the share value for the G fund @10.81. Does the share price of the G fund ever go down?

 

[tennisguy]

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yep thats correct. The G fund does not go down. But it is the only one of the five that does not. :^

 

[GGal]

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Tom,



Why does the front page show share prices for 6/19? Shouldn't that be for 6/21? 6/18 and 6/19 were Saturday and Sunday.

Thanks

Gawga

 

[tsptalk]

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GeorgiaGal wrote:

Why does the front page show share prices for 6/19? Shouldn't that be for 6/21? 6/18 and 6/19 were Saturday and Sunday.

:'

Thanks!