I Fund Lag

This topic contains 6 replies, has 3 voices, and was last updated by  12squared 3 years ago.

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  • #18235

    Anne
    Participant

    Anyone notice how I fund seems to lag in comparison to benchmark EFA? Below are this past week’s EFA price, %change and I Fund %change:
    02/19/16 EFA=$53.92 (-$0.06) -0.11% I -0.75%
    02/18/16 EFA=$53.98 (-$0.28) -0.52% I +0.14%
    02/17/16 EFA=$54.26 (+$0.92) 1.72% I +1.83%
    02/16/16 EFA=$53.34 (+$1.06) 2.03% I +1.99%
    02/12/16 EFA=$52.28

    On the 18th, the I fund went up although the EFA fund was down .52% Not sure if it is because of the time difference between our market and overseas, but I have noticed lag for some time now.

    https://www.google.com/finance?q=NYSEARCA:EFA&ei=OJJiVMHAKYyTqwG0xoBw

    #18259

    TS Paul
    Keymaster

    You have way too much time on your hands. 😉

    The TSP Allocation Guide www.TSPallocation.com

    #18267

    Anne
    Participant

    Perhaps you are right TS! If you are thinking of increasing or decreasing your position in the I fund, however, it may be beneficial to know. If the lag is consistent, as it appears to me, it would be better to buy day after down day and sell day after up day. I know you don’t try to time your purchases but I still believe it’s advantageous to buy low & sell high

    #18281

    12squared
    Participant

    Anne,

    It is not your imagination. Since the beginning of the year, the delta between the daily change in EFA and I fund has been nearly +/- 1 percentage points.

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    #18286

    Anne
    Participant

    Thank you 12squared, good to know I’m not going crazy. On your other post/attachment you are correct in that the I Fund has performed worse than the other stock funds. I hasn’t really outperformed C or S since 2006 to mid 2008, but I got lost on your spreadsheet on the other thread. It doesn’t make sense to me to divide one fund by the other. I look at the charts on Google Finance and you can compare the funds over different period, which makes more sense to me. I use iShares MSCI EAFE Index Fund (ETF) as equivalent, which actually shows dividend paid; whereas the index phones do not. Not sure what impact, if any, that has as I know the stocks in the indexes do pay dividends.

    #18287

    Anne
    Participant

    funds (not phones)

    #18289

    12squared
    Participant

    Anne,

    It may help to consider price ratios like currency exchange rates. See “Changing Lanes…” thread for more on this.

    The S/I exchange rate bottomed out (I was strongest) around 0.77 in Jan. 2008, and peaked at 1.52 in Jan & Sept 2015. However, there are 5 periods since 2008 where S backslid by more than 0.10, and many more in the 0.05-0.10 range.

    I only use sites like iShares, Google or TSPcenter which show relative performance of funds against themselves from a date when I made an IFT as a quick check. If one fund is down 8% and another 10%, I know that the 2nd is doing relatively ~2% worse than the other. Over long time periods, this is much more difficult to make sense of , because the delta is tied to the prices on a specific date. Changing the date changes the prices , which changes the deltas. In contrast, price ratios normalize the differences such that they can be compared and statistically analyzed over any time interval.

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