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TSP announced additional information about the I Fund, which will be based on different indexes of international stocks, but was not specific about timing other than to say it would be completed by the end of the year, as previously announced.
According to the post, based on the Trustees’ decision last year, the fund will continue to invest in the MSCI All Country World Investable Market Index (excluding U.S., China, and Hong Kong) index (MSCI ACWI IMI, excluding U.S., China, and Hong Kong). The index will be changed to follow the MSCI Europe, Australia and Far East (MSCI EAFE) index, rather than the MSCI Europe, Australia and Far East (MSCI EAFE) index.
“This change will further diversify investments in the I Fund and give TSP participants access to more markets and companies. Based on a thorough analysis, the Board believes that the new index We expect this to provide an opportunity to earn higher returns without significantly increasing returns.”
It said the current index reflects the stocks of about 800 large and mid-sized companies in 21 developed countries, representing about 55% of the non-U.S. stock market. In contrast, the new index reflects more than 5,000 large, midsize, and small companies from the same countries, plus 23 emerging market countries that account for 90% of the market outside the United States.
It is noteworthy that the new index does not include mainland Chinese stocks, which has led to further declines in stocks in the Hong Kong market, which is reflected in the current index. These moves could end years of controversy over the TSP fund’s investments in the latter and the possibility of investments in the former with the fund’s long-planned expansion to reflect additional country stocks. There is sex.
To migrate, TSP fund managers will have to sell some stocks and buy others to migrate to the new benchmark index. To minimize costs, managers must We strategically choose the dates and times of these transactions over several months,” the post states.
“Due to the need to protect the Fund from the possibility that other investors may gain an unfair trading advantage, we are unable to disclose the exact timing in advance. “We plan to make an announcement by December 31, 2024 at the latest.”
The I Fund is the second smallest of TSP’s five core funds, and the Fixed Income F Fund is smaller, accounting for 9.2 percent of the total at the end of 2023, taking into account the Lifecycle L Fund’s share. occupies .
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