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Thread: S Fund basics

  1. #1

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    Default S Fund basics

    Can someone explain the basics of why the S fund doesn't aways track well with the C fund on a daily basis?

    In additon, I've noticed the C & I have approched their march lows while the S hasn't. Does anyone expect S to hit it's March lows before going back up.

    Why/how does the S lag?

    Thanks... JTH


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  3. #2

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    Default Re: S Fund basics

    the S funds tracks the Wilshire 4500, which is the wilshire 5000 index minus the S&P 500.

    pretty cool huh?...wilshire 5000 - S&P 500 (C fund) = wilshire 4500 (S fund)

    S fund is thought to be more volatile than C fund since it represents smaller cap stocks. So theoretically based on volatility, it will lose more on down days and win more on up days vs. the C fund. Also theoretically, based on volatility, it will start and finish a trend sooner than the C fund and theoretically, while doing so, exceed the gain or loss of the trend vs. the C fund. This is contrary to current conditions however, as you've pointed out. If the market, (c-fund) holds here, then I would suspect the S will also hold and not touch it's march lows.
    Last edited by FUTURESTRADER; 07-06-2008 at 05:45 PM.

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  5. #3

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    Default Re: S Fund basics

    Quote Originally Posted by FUTURESTRADER View Post
    the S funds tracks the Wilshire 4500, which is the wilshire 5000 index minus the S&P 500.

    pretty cool huh?...wilshire 5000 - S&P 500 (C fund) = wilshire 4500 (S fund)

    S fund is thought to be more volatile than C fund since it represents smaller cap stocks. So theoretically based on volatility, it will lose more on down days and win more on up days vs. the C fund. Also theoretically, based on volatility, it will start and finish a trend sooner than the C fund and theoretically, while doing so, exceed the gain or loss of the trend vs. the C fund. This is contrary to current conditions however, as you've pointed out. If the market, (c-fund) holds here, then I would suspect the S will also hold and not touch it's march lows.
    Good explanation.
    Socrates: "Democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequaled alike."

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  7. #4

    Question Re: S Fund basics

    Someone add to the answer for me. Doesn't the content of the S&P vs
    W4500 (ie....Financial Socks,,,,Energy & Oil Stock) have a large effect
    on the different returns each receive.

    Example, if the S&P is weighted heavier in Financial and that sector takes
    a hit, it is like that the S&P could go down more then the W4500 if the
    other sectors (stock content) break pretty much even on that day.

    Note: The example above is just that, an example. I don't know what the
    actual breakdown of each by sectors are. I just thought I read this on a
    thread some time ago.


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  9. #5

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    Default Re: S Fund basics

    Quote Originally Posted by squalebear View Post
    Someone add to the answer for me. Doesn't the content of the S&P vs
    W4500 (ie....Financial Socks,,,,Energy & Oil Stock) have a large effect
    on the different returns each receive.

    Example, if the S&P is weighted heavier in Financial and that sector takes
    a hit, it is like that the S&P could go down more then the W4500 if the
    other sectors (stock content) break pretty much even on that day.

    Note: The example above is just that, an example. I don't know what the
    actual breakdown of each by sectors are. I just thought I read this on a
    thread some time ago.

    good point,...my assumption, which is only that, is that the S&P 500 and the wilshire 4500 are fairly evenly diversified relative to each other. I.e., maybe the 4500 has 20% in small and midcap financials, and the S&P also has 20%, albeit large cap financials. Just more assuming here. Caveat Emptor
    wilshire 4500:

    By Sector Number of Companies % Market Value of Companies wilshire 4500:

    Capital Goods 189 5.59
    Consumer Durables 142 2.14
    Consumer Non-Durables 721 13.49
    Energy 165 11.40
    Finance 771 18.60
    Materials & Services 1404 28.89
    Technology 650 12.04
    Transportation 76 1.70
    Utilities 134 6.16
    ----------------------------------------

    Sector No. of Companies S&P 500 % S&P 500 EWI %
    Consumer Discretionary 86 8.60% 16.86%
    Consumer Staples 40 10.50% 8.05%
    Energy 36 14% 7.63%
    Financials 92 17.10% 17.75%
    Healthcare 51 11.30% 10.24%
    Industrials 56 11.80% 11.41%
    Information Technology 71 16.00% 14.19%
    Materials 28 3.60% 5.79%
    Telecommunications 9 3.40% 1.80%
    Utilities 31 3.60% 6.28%
    Figure 2: Sector weight comparison as of April 30, 2008



    wilshire 4500 financials = 18.6%
    s&p 500 " = 17.10

    w4500 energy = 11.4%
    s&p energy = 14%


    they look fairly closely diversified
    Last edited by FUTURESTRADER; 07-06-2008 at 07:44 PM.

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  11. #6

    Exclamation Re: S Fund basics

    SPY CONTENT

    FINANCIALS17.31%
    TECHNOLOGY14.98%
    OIL & GAS13.66%
    INDUSTRIALS13.08%
    HEALTH CARE11.09%
    Consumer Services10.45%
    CONSUMER GOODS9.62%
    UTILITIES3.97%
    TELECOMMUNICATIONS3.37%

    This is a close comparison to the S&P500. Time for work, gotta run.
    Hope this helps, see if you can find w4500 content for comparison.
    OOOOPS,,,,,YOU ADDED IT,,,,,DISREGARD. I'LL CHECK BACK LATER

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  13. #7

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    Default Re: S Fund basics

    Good discussion points on S versus C. Keep in mind the S&P500 is heavily weighted in favor of a handful of stocks. Even if the entire market is green and just a handful of S&P500 stocks are red (the heavily weighted ones like financials), down goes the C fund. I don't trade much in the C anymore. The C was destroyed recently by the collapse of the financials. I like to stick with S and I depending on which is doing better. Right now, the I is looking very weak to me. I am 25 in I, 25 in S and 50 in G. May shift to either 50 S 50 G, 100 S or 100G. My limit of making two trades in August is handcuffing me right now. I really want to move to 50S 50G but would waste a move! TSP board is a bunch of idiots for handcuffing us like this.

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  15. #8

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    Default Re: S Fund basics

    Quote Originally Posted by Ed the Fed View Post
    Good discussion points on S versus C. Keep in mind the S&P500 is heavily weighted in favor of a handful of stocks. Even if the entire market is green and just a handful of S&P500 stocks are red (the heavily weighted ones like financials), down goes the C fund. I don't trade much in the C anymore. The C was destroyed recently by the collapse of the financials. I like to stick with S and I depending on which is doing better. Right now, the I is looking very weak to me. I am 25 in I, 25 in S and 50 in G. May shift to either 50 S 50 G, 100 S or 100G. My limit of making two trades in August is handcuffing me right now. I really want to move to 50S 50G but would waste a move! TSP board is a bunch of idiots for handcuffing us like this.
    The S Fund has been holding back the past 2 weeks and it looks like the C Fund has had better gains but I am 100% S Fund and refuse to move looking at $19.00 - $19.25 and then move out but this is a bear market and any sign of a fall on Monday with my 2 moves intact I may more to the I Fund for a few days. Then back to the S Fund
    Keep me true to my best self, guarding me against dishonesty in purpose. Semper Fidelis

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  17. #9

    Post Re: S Fund basics

    Why Small Caps Are "Shining"
    Posted By:Bob Pisani
    Topics:Investment Strategy | Stock Market

    This post is from CNBC producer Robert Hum.
    Many of the trends seen last week continue at the midway point of today’s trading session. Stocks have moved to their highs of the day as the dollar rally/commodity drop continues. Airlines and consumer discretionary stocks lead the way, benefiting from oil falling over $2, to under $113.

    On the flip side, the declining commodity prices are moving energy and material stocks sharply lower. Gold stocks headline this weakness, posting a 6 percent decline today. In fact, they have now been down three days in a row, posting a 12% decline during that time.

    Once again, the small cap Russell 2000 index is shining. Its 2 percent gain is outperforming the 1 percent gains that the other major indices are seeing. Recall that the dollar strength generally hurts the larger U.S. multinational companies more as their exports become more expensive overseas. With a more U.S.-centric focus, the small cap companies listed on the Russell 2000, however, typically don’t have this international exposure and are less affected by a rally in the dollar.


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  19. #10

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    Default Re: S Fund basics

    what's up with the S equivalents today? BigCharts has VXF (vanguard ext market) up big today +2.94%, but Sharpcharts has EMW (4500 Wilshire complete) down -2.67% right now?????
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard

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  21. #11

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    Default Re: S Fund basics

    Quote Originally Posted by alevin View Post
    what's up with the S equivalents today? BigCharts has VXF (vanguard ext market) up big today +2.94%, but Sharpcharts has EMW (4500 Wilshire complete) down -2.67% right now?????
    Looks like the previous close is actually the close from Thursday. VXF is actually down today.
    Weatherweenie's Account Talk
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