The I Fund must be invested in a portfolio that is designed to track the performance of an index of common stocks representing international stock markets outside of the United States. This requirement is mandated by law. The MSCI EAFE (Europe, Australasia, Far East) Index, which tracks the overall performance of the major companies and industries in the European, Australian, and Asian stock markets, has been selected as the benchmark by the Federal Retirement Thrift Investment Board.
The EAFE File, distributed by MSCI, is a record of the value markets of the created world beyond the US and Canada. It is the international stock index that is used the most. As of December 31, 2022, the file covered the value markets of 21 nations, as displayed in the table.
The FRTIB’s Leader Chief right now apportions the determination, buy, venture, and the board of resources contained in the I Fund to BlackRock Institutional Trust Organization, N.A., and State Road Worldwide Guides Trust Organization. The I Fund holds normal supplies of the relative multitude of organizations addressed in the EAFE List in essentially the very loads that they have in the record. The exhibition of the I Fund is assessed based on how intently its profits match those of the EAFE Record.
International Stock Index Investment Fund Investments
- The I Fund is invested in a separate account that is managed by BlackRock Institutional Trust Company, N.A. The I Fund holds common stocks of all the companies represented in the EAFE Index in virtually the same weights that they have in the index. The return on the I Fund will differ from that of the EAFE Index on days when BlackRock makes a “fair valuation” adjustment to the price of the securities held by the fund. Fair valuation adjustments are made on days when there are large movements in either U.S. equity markets or currency exchange rates after the foreign markets have closed. Fair valuation prevents traders from exploiting “stale” prices, thus diluting the returns of other TSP participants who invest in the I Fund.
- The performance of the I Fund is evaluated on the basis of how closely its returns match those of the EAFE Index. A portion of the I Fund’s assets is reserved to meet the needs of daily client activity. This liquidity reserve is invested in international equity futures contracts.
Note: A fund reallocation is the total redistribution of a participant’s existing account balance among the TSP funds. A fund transfer means moving money from one or more TSP funds to one or more other TSP funds, or moving money to and from the mutual fund window. After the first two of either type of transaction, for the remainder of the month, a
participant can only move money into the G Fund. For participants with more than one TSP account, this rule applies to each account separately.
I Fund Frequently Asked Questions
1) Is the I Fund worth my money?
A) Gains from equity ownership in non-U.S. businesses can be realized through investment in the I Fund. Since it addresses the loads of organizations in many created nations (barring the U.S.), it is a fantastic method for differentiating the stock part of your TSP allotment.
2) Do I accept the risk of the market and inflation?
A) In the MSCI EAFE, fund returns fluctuate in tandem with market risk. The EAFE Record (and the I Asset returns) will rise or fall as the worth of the U.S. dollar diminishes or expands comparative with the worth of the monetary standards of the nations addressed in the EAFE record (money risk) or on the other hand on the off chance that I Asset speculations don’t dominate or develop to the point of balancing the decrease in buying influence.
3) How might I utilize the I Fund in my TSP?
A) The I Fund can be valuable in a portfolio that likewise contains stock finances that track different files, for example, the C Fund and the S Fund. You can reduce your exposure to market risk by investing in all stock market segments as opposed to just one. The I Fund can likewise be valuable in a portfolio that contains bonds. A retirement portfolio with bond funds like the F Fund and stock funds like the C and S Funds typically has lower volatility than one with only stock funds.
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