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Thread: Any advantage to using a daily rebalanced fund?

  1. #1

    Default Any advantage to using a daily rebalanced fund?

    I’m looking for a 30/70 allocation like the L2020 funds. However, I don’t like the 4% S and 10% I allocation in L2020. Hence, I’m creating a modified L2020 allocation to be 64%G, 6%F, 15%C, 10%S and 5%I.

    Is there any advantage to using the L2020 funds because it balances the allocation every day? If I balance my TSP allocation to be my modified L2020 funds
    twice a month, would this be to a lesser advantage than a daily rebalacing?

    Thank you.


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  3. #2

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    Default Re: Any advantage to using a daily rebalanced fund?

    You could do a daily rebalance by using the <1% move. The first two moves would be your normal IFT's and you would be out of IFT's for the month if you wanted to make a major change. Your rebalance would also depend on your allocations and what funds they are distributed to.
    May the force be with us.

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  5. #3

    Default Re: Any advantage to using a daily rebalanced fund?

    Quote Originally Posted by nasa1974 View Post
    You could do a daily rebalance by using the <1% move. The first two moves would be your normal IFT's and you would be out of IFT's for the month if you wanted to make a major change. Your rebalance would also depend on your allocations and what funds they are distributed to.
    Good answer nasa! Here's a link to how that works...

    https://www.tsptalk.com/mb/members-a...read-only.html
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor. Do your own due diligence.

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  7. #4

    Default Re: Any advantage to using a daily rebalanced fund?

    Thank you for your prompt reply. Just to make sure that I understand your recommendation. I would do a <1% ITF twice a month (1st and 16th of the month) since each <1% move counts as an ITF. Though with the ~15 day interval, the changes in the percentage may be >1%.

    Hence, I might as well just reset the allocation to my target allocation at the 1st and 16th of each month.

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  9. #5

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    Default Re: Any advantage to using a daily rebalanced fund?

    Quote Originally Posted by dtech77 View Post
    Thank you for your prompt reply. Just to make sure that I understand your recommendation. I would do a <1% ITF twice a month (1st and 16th of the month) since each <1% move counts as an ITF. Though with the ~15 day interval, the changes in the percentage may be >1%.

    Hence, I might as well just reset the allocation to my target allocation at the 1st and 16th of each month.
    You could do a <1% move every other day if you wanted to. Just remember if you do that then you will have used up your 2 IFT's within the first week of the month. Or you could use your IFT's on the 1st and 16th of the month to rebalance after your allocation and then do the <1% the 18th through the end of the month.
    May the force be with us.

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  11. #6

    Default Re: Any advantage to using a daily rebalanced fund?

    Quote Originally Posted by nasa1974 View Post
    You could do a <1% move every other day if you wanted to.
    Is it every day, or every other day? I never tried it.
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor. Do your own due diligence.

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  13. #7

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    Default Re: Any advantage to using a daily rebalanced fund?

    You can do it every day if you wanted to.
    May the force be with us.

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