TSP SHARE PRICE

[MR CARLO]

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

:dah:

[tsptalk]

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]

Tom thanks,

I think I understand the I fund.

I wonder what indices they are following?

Must be a government secret!!!

[tsptalk]

Here is more info on the funds ... www.tsptalk.com/funds.html (http://www.tsptalk.com/funds.html)

[MR CARLO]

This isthe answergot from TSP.GOV.
OC 03-11 (8/2004)
What is a “share”?
A share is a unit of ownership in a
company or fund. As a TSP participant,
you own shares in the funds in which
you are invested.
The balances for each fund in your account
are stated in shares as well as in
dollar amounts. Each TSP fund has a
different share price.
How are daily share prices determined?
At the end of each business day, each
TSP fund is revalued. As a result, the F,
C, S, and I Funds each have a new value
that reflects the closing prices for that
day’s stock and bond markets, minus the
fund’s share of the TSP’s daily administrative
expenses. Then a new share price
is determined by dividing the fund’s new
value by the total number of outstanding
shares in the fund.
Unlike the F, C, S, and I Funds, the
G Fund is not affected by daily market
volatility. Instead, it gains earnings
through the constant accrual of interest.
A new interest rate is determined at the
beginning of each month by the U.S.
Treasury. It takes several days for the
fund to accrue enough interest to show a
share-price increase.
When do share prices change?
Share prices are updated each business
day at approximately 7:00 p.m., eastern
time.
Does the TSP use the new share
prices for my daily transactions?
Yes. Once the new daily share prices for
each fund are established, they are applied
to your account. Any transactions
in your account on that day (that is, contributions,
interfund transfers, loan disbursements
and payments, withdrawals)
are processed using the new share
prices. (Your transactions must be accepted
by 12:00 noon eastern time in
order to be processed that night using
that day’s new share prices.)
Are the earnings for the TSP
funds I’m invested in used to purchase
additional shares in
those funds?
No. Because the increase or decrease in
the value of a fund (that is, earnings) is
reflected in the share price, earnings are
not reported separately or used to purchase
additional shares. An increase or decrease in
the value of a fund does not affect the number
of shares you own — just their value.
Example:
Number of Number of
Shares Shares
Purchased Purchased
Contribution Share Before After
Source Price Rounding Rounding
Employee: $294.50 ÷ $10.43 = 28.23586 28.2359
Agency
Automatic
(1%): 58.90 ÷ 10.43 = 5.64717 5.6472
Agency
Matching: 235.60 ÷ 10.43 = 22.58869 22.5887
Total: $589.00 56.4718

contribution to the C Fund is calculated by source,
as described above. The sum of the rounded shares
purchased through all three sources is 56.4718.
This represents a difference of .0001 from the result
you would get by simply dividing the participant’s
total overall contribution ($589.00) by the share
price (10.43) to arrive at 56.4717 ($589.00 ÷ $10.43
= 56.47172 shares, rounded to 56.4717 shares).
What is dollar-cost averaging?
Dollar-cost averaging is a system of purchasing
shares at regular intervals with a fixed dollar
amount. The number of shares may change with
each purchase, based on the share price at the time
of purchase. The fixed dollar amount buys more
shares when the share price is low and fewer shares
when the share price is high. If you are investing
regularly in the F, C, S, or I Funds through payroll
deductions, you are already dollar-cost averaging.
How does dollar-cost averaging benefit
me?
The example below illustrates how dollar-cost averaging
benefits you.
In this example, you made regular contributions of
$200. Since there was a different share price each
time you made a contribution, you received a different
number of shares for each $200 contribution
you made. With your four contributions, you invested
a total of $800 and purchased a total of 24
shares. Your average share price (that is, the sum of
the four share prices divided by the number of contributions,
or $150 ÷ 4) was $37.50. However, because
of dollar-cost averaging, your cost per share was
only $33.33 — the sum of your contributions divided
by the number of shares you purchased ($800 ÷ 24).
Contri- Investment Share Shares
bution Amount Price Purchased
1 $200 $50 4
2 $200 $40 5
3 $200 $20 10
4 $200 $40 5
Totals $800 $150 24
• Average share price of the four contributions: $150 ÷ 4 = $37.50
• Participant’s cost per share: $800 ÷ 24 = $33.33

[MR CARLO]

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

[tennisguy]

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

[GGal]

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]

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!