TSP Fund Deep Dive – The G Fund – Free Lunches Do Exist

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There are only five investments available in the Thrift Savings Plan (TSP), so let’s take a detailed look at them one at a time. In this post we’ll cover the G Fund.

The G Fund is proof that free lunches do actually exist because in the G Fund the government is paying you more interest than they actually should. Read on to find out how and why.

Inception Date

1 APR 1987

Fund Management

Unlike the other TSP funds that are managed by Blackrock, the G Fund is managed internally by the Federal Retirement Thrift Investment Board. The G Fund buys a non-marketable U.S. Treasury security that is guaranteed by the U.S. Government. This means that the G Fund will not lose money.

Investment Strategy

The G Fund invests exclusively in a non-marketable short-term U.S. Treasury security that is specially issued to the TSP. The earnings consist entirely of interest income on the security.

The G Fund’s investment objective is to produce a rate of return that is higher than inflation while avoiding exposure to credit (default) risk and market price fluctuations. It is designed to provide investors with interest income without risk of loss of principal.

What is the Risk?

Your investment in the G Fund is subject to inflation risk, meaning your G Fund investment may not grow enough to offset the reduction in purchasing power that results from inflation.

What is the Benefit?

The payment of G Fund principal and interest is guaranteed by the U.S. Government. This means that the U.S. Government will always make the required payments. In other words, your G Fund investment is not subject to credit (default) risk.

The G Fund interest rate calculation is based on the weighted average yield of all outstanding Treasury notes and bonds with 4 or more years to maturity. As a result, participants who invest in the G Fund are rewarded with a long-term rate on what is essentially a short-term security. Generally, long-term interest rates are higher than short-term rates. This is the free lunch that the government periodically talks about getting rid of.

The G Fund is the lowest risk fund in the TSP and will have the lowest volatility, as you can see below. The major benefit is that you are guaranteed not to lose money. In trade for this you are receiving lower returns. Here is all the performance data as of 8 OCT 2019:

Screen Shot 2019-10-08 at 8.10.14 PM

Types of Earnings

The G Fund makes money for its investors with interest paid by the U.S. Government.

Expenses

The net expenses paid by investors is 0.04% or 4 basis points, which like all the TSP funds is ridiculously low and is a major benefit of the TSP. It costs $0.40 for each $1,000 invested. You won’t find a lower cost U.S. government bond fund anywhere.

How Should I Use the G Fund in my TSP Account?

Consider investing in the G Fund if you would like to have all or a portion of your TSP account completely protected from loss. If you choose to invest in the G Fund, you are placing a higher priority on the stability and preservation of your money than on the opportunity to potentially achieve greater long-term growth in your account through investment in the other TSP funds.

It is the TSP equivalent of a U.S. Treasury bond fund you’d find at Vanguard or other investing firms.

Advice from My Favorite Short Investing Book

Here is what my favorite investing book, The Elements of Investing: Easy Lessons for Every Investor, says about U.S. government bond index funds like the G Fund:

The U.S. Treasury issues large amounts of bonds. These issues are considered the safest of all and these bonds are the one type of security where diversification is not essential…High quality bonds can moderate the risk of a common stock portfolio by providing offsetting variations to the inevitable ups and downs or the stock market.

If you want to know how to integrate the G fund into your own TSP investments, read the Crush the TSP series. In particular, step 3 tells you how to figure out how much of your portfolio to devote toward bonds.

NCC Program Director Search – Orthopaedic Surgery

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Here is the announcement/recruitment letter for the Program Director position for the NCC Orthopaedic Surgery Residency.

The memorandum to the Surgeons General requests the widest dissemination of the announcement to ensure that all physicians desiring an assignment as a Program Director have the opportunity to apply.

Here also is the DoD Policy and Selection Criteria for GME Program Directors, as well as the ACGME requirements for this position.

Please note:    Applicants are required to submit a bio in addition to CV and letter of intent, NLT 1 Nov 2019, to CDR Melissa Austin (contact in the global). Applications should have concurrence from their Detailer and Specialty Leader.

An applicant’s CV must include a section about faculty development activities that they have done.

An applicant’s CV must demonstrate at least 3 years of documented education and/or administrative experience, as well as ongoing clinical activity in the (sub)specialty for which they are applying.

An applicant’s CV must demonstrate current board certification in the (sub)specialty in which they are applying.   Current medical licensure must also be documented on the CV.

An applicant’s CV must demonstrate current ongoing scholarly activity.

The Letter of intent must include the candidate’s level of commitment to GME and the Program Director position, including the number of years they are willing to serve, and that if selected, that they will accept the position.  This program is 6 years in length.

BUMED Chief Medical Information Officer

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We are now accepting applications for the BUMED CMIO position.  This is a high visibility opportunity for one of our informaticists – duty is here in beautiful Falls Church, VA.  Candidates should be able to report to BUMED NLT June of 2020 and should have PERS’ concurrence for the move.

Applications, to include CV, Bio and Letter of Intent, should be submitted to CDR Melissa Austin (contact info is in the global) NLT October 25.

The PD (to include qualifications) is here.

Throwback Thursday Classic Post – What are AQDs and How Do You Get Them?

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2019 BLUF – AQDs don’t get you promoted. Competitive EP fitreps get you promoted. If you are looking to maximize your impact, spend your time getting JPME, the Executive Medicine AQD, and your respective warfare device and ignore the rest of the AQDs.

The Original Article

Additional Qualification Designation Codes or AQDs are 3 letter codes that:

  1. Identify special skills required by a billet.
  2. Identify a qualification awarded to an officer for serving in a specially coded billet.

In other words, they are tools used by Navy Personnel Command (PERS) to assign officers to billets.

They also serve another purpose, though, because they feed the “Special Qualifications” section in the lower left of your Officer Summary Record (OSR), which is seen by promotion boards.  Here’s what mine looks like:

Screen Shot 2019-10-05 at 11.46.57 AM

This is why officers sometimes try to get as many AQDs as they can.  The more things are in your Special Qualifications section, the better it looks to a promotion board.

That said, I have to tell you that some officers can get a little carried away with AQDs.  Get as many as you can that make sense for your specialty and career, but don’t chase AQDs because you think they’ll get you promoted.  AQDs, in general, don’t get you promoted.  Competitive EP fitreps get you promoted.  The most impactful AQDs at promotion boards are the ones that are the hardest to get, including Executive Medicine, Joint Professional Military Education (JPME), and any that indicate a warfare qualification.

The full list of AQDs can be found here, and the list of medical AQDs can be found here, but I think a very useful list to have would be a list of all the AQDs that any physician can get irrespective of their specialty.  That list is below, and if you qualify for any of them you’ll have to send your Detailer the proof that you qualify in order to get them added to your record.

If you want to make sure you have all the AQDs you can get, you have to do 4 things:

  1. Review the chart below and see which general AQDs you qualify for.
  2. Review the AQDs for your specialty in this document.
  3. If you had a prior career before you became a Medical Corps officer of any kind, you’re stuck reviewing the complete list of AQDs and seeing if there are any you qualify for that weren’t covered by #1 or #2 above.
  4. For any AQDs you qualify for, you send your Detailer the 3 letter code, the year you qualified, and the proof that you qualify (usually scanned copies of fitreps, certificates, etc.).
CODE TITLE CRITERIA TO GET IT
BT1 Parachutist, Static-line Qualified Qualified IAW MILPERSMAN 1220-030.
BT2 Parachutist, Freefall Qualified Qualified IAW MILPERSMAN 1220-030.
BX2 Fleet Marine Force Warfare Officer Qualified IAW current fleet instructions and SECNAVINST 1412.10A.
BX3 Expeditionary Warfare Successfully completed at least 18 months in an operational expeditionary warfare billet within the Navy Expeditionary Combat Command Force.
JS7 Joint Professional Military Education (JPME) Phase I Successfully completed JPME Phase I from schools defined by the Joint Staff:

(a) Naval War College for classes commencing March 1989 and beyond (to include the Distance Learning, Non- Resident curriculum), OR

(b) Other service colleges for classes commending August 1989 and beyond (to include the Distance Learning, Non- Resident curriculum), OR

(c) Selected Foreign War Colleges, OR

(d) Selected Fellowship programs.

JS8 JPME Phase II Successfully completed JPME Phase II from schools defined by the Joint Staff:

(a) Joint Forces Staff College, Joint & Combined Warfighting School, OR

(b) Senior Level Service War Colleges.

J1M Joint Staff Medical Successfully completed assignment to an Individual Augmentation (Interservice Interagency Coalition) for a minimum period of 6 months.
J2M Multinational HQ Medical Successfully completed assignment to an Individual Augmentation (Interservice Interagency Coalition) for a minimum period of 6 months.
J3M Combatant Commander Level Medical Successfully completed assignment to an Individual Augmentation (Interservice Interagency Coalition) for a minimum period of 6 months.
J4M Fleet/Division Staff Medical Successfully completed assignment to an Individual Augmentation (Interservice Interagency Coalition) for a minimum period of 6 months.
J5M Joint Task Force Medical Successfully completed assignment to an Individual Augmentation (Interservice Interagency Coalition) for a minimum period of 6 months.
J6M Other Medical Successfully completed assignment to an Individual Augmentation (Interservice Interagency Coalition) for a minimum period of 6 months.
LA7 Qualified Medical Department Officer who has qualified
as a Surface Warfare Medical Department Officer IAW OPNAVINST 1412.8.
U1M Joint Staff Medical Successfully completed assignment to an Individual Augmentation (Intra Service) for a minimum period of 6 months.
U2M Multinational HQ Medical Successfully completed assignment to an Individual Augmentation (Intra Service) for a minimum period of 6 months.
U3M Combatant Commander Level Medical Successfully completed assignment to an Individual Augmentation (Intra Service) for a minimum period of 6 months.
U4M Fleet/Division Staff Medical Successfully completed assignment to an Individual Augmentation (Intra Service) for a minimum period of 6 months.
U5M Joint Task Force Medical Successfully completed assignment to an Individual Augmentation (Intra Service) for a minimum period of 6 months.
U6M Other Medical Successfully completed assignment to an Individual Augmentation (Intra Service) for a minimum period of 6 months.
233 White House Fellowship Participant in White House Fellowship Program.
2C1 Continuous Process Improvement (CPI) Green Belt Certified Certified as a Green Belt per local command policy and recommended by the Commanding Officer via the local command’s Certified Black Belt/Master Black Belt. The command’s Certified Black Belt/Master Black Belt (NMSC CPI/LSS PMO for Navy Medicine Corps) will validate completion of the following requirements:

(a) Formal training (A-557-0003 or A-557-3100); AND

(b) The DON approved JQR standards have been met:

– Lead two LSS full DMAIC projects; OR

– Lead two KAIZENs/RIEs; OR

– Lead one full DMAIC project and one KAIZEN/RIE.

2C2 CPI Black Belt Certified Certified as a Black Belt per local command policy and recommended by the Commanding Officer via the local command’s Certified Black Belt/Master Black Belt. The command’s Certified Black Belt/Master Black Belt (NMSC CPI/LSS PMO for Navy Medicine Corps) will validate completion of the following requirements:

(a) Formal training (A-557-0009 or A-557-3005); AND

(b) The DON approved JQR standards have been met:

– Lead two LSS full DMAIC projects and one KAIZEN/RIE; AND

– Mentor two Green Belts through one full DMAIC project each or two KAIZENs/RIEs.

234 Legislative Fellowship Successfully completed at least 9 months in a Legislative Fellow assignment.
24F SECDEF Corporate Fellow Successfully participated in the Secretary of Defense Corporate Fellows program.
6AA Aviation Medical Examiner Medical Corps Officer from the Primary Care medical subspecialty codes who has successfully completed Aviation Medical Examiner training at the Naval Aerospace and Operational Medical Institute.
6AB General Flight Officer Medical Corps Officer who has successfully completed a formal flight surgeon training program and is a designated Naval Flight Surgeon.
6AC Naval Aviator (Naval Flight Officer (NFO))/ Aeromedical Officer Medical Corps Officer who is a designated Naval Flight Surgeon and NFO.
6AE Naval Aviator (Pilot)/ Aeromedical Officer Medical Corps Officer who is a designated Naval Flight Surgeon and Naval Aviator (Pilot).
6AG Aerospace Medicine (Preventive Medicine) Medical Corps Officer who has successfully completed:

a. formal Flight Surgeon Training program at NAMI;

b. a tour as a flight surgeon;

c. an approved Master’s degree program in public health;

and

d. an approved Aerospace Medicine residency program;

or

e. is eligible for the Aerospace Medicine specialty examination offered by the Board of Preventive Medicine.

6FA Marine Corps Medical Department Officer Successfully completed a deployment of 90 or more consecutive days with the Marine Corps.
6FC Fleet Marine Force Medical Logistics (a) Successfully completed the USMC Ground Supply Officer School, AND

(b) Holds AQD 6FA.

6FD Surface Experienced Medical Officer (a) Successfully completed an internship with sufficient primary care training to operate within the needs and operations of the fleet, AND

(b) Has successfully completed a tour of duty with the Surface Fleet.

6FE Senior Marine Corps Staff Officer Successfully completed a senior Marine Corps staff position.

NOTE: Brigade, Group, Wing, Division and Force Surgeons, Force Preventive Medicine Officers, and the Headquarters Director for medical programs qualify.

6OB Shipboard Assignment Successfully completed an assignment of 90 or more consecutive days aboard a ship (other than a hospital ship).
6OC Hospital Ship Assignment Successfully completed an assignment of 90 or more consecutive days aboard a hospital ship.
6OH Humanitarian Assistance/ Disaster Response (1) Served a minimum 90 days in one or more foreign or domestic HA/DR missions and demonstrated operational competence relevant to assigned position in the following HA/DR mission elements: mission leadership and planning (operations, manpower and logistics), international diplomacy, cultural awareness, host nation centered HA/DR health care, IT, communications and administration. AND

(2) Completed two of the following:

(a) Military Medical Humanitarian Assistance Course (MMHAC), (b) Combined Humanitarian Assistance Response Training (CHART),
 (c) Joint Humanitarian Operations Course (JHOC), (d) Joint Operations Medical Managers Course (JOMMC), 
(e) UM-CMCoord IMPACT Course, 
(f) NATO CIMIC Basic Course (NCBC), 
(g) Health Emergencies in Large Populations (H.E.L.P .),
 (h) Joint Planning Orientation Course (JPOC),
 (i) Joint Medical Planners Course (JMPC)
, (j) Joint, Interagency, and Multinational Planner’s Course (JIMPC),
 (k) JTF Senior Medical Leader Seminar,
 (l) Asia-Pacific Orientation Course (APOC),
 (m) SWMI Humanitarian Assistance Course,
 (n) CATF Surgeons Course,
(o) DMRTI Medical Stability Operations (MSO) Course, 
(p) Alternate course(s) deemed to have sufficient didactic content comparable with other qualifying courses by the Mission Commander, T-AH Commander, MTF Commanding Officer, CATF Surgeon, Navy Medical Mission Commander, or USMC Task Force/Group Surgeon or USMC Medical Element Commander.

NOTE: Verification that member has met the above prerequisites must be provided via endorsement by the Mission Commander, T-AH Commander, MTF Commanding Officer, CATF Surgeon, Navy Medical Mission Commander, USMC Task Force/Group Surgeon, or USMC Medical Element Commander.

6OR CATF Surgeon Any Medical Department Officer who has:

(a) Successfully completed CATF Surgeon course; OR

(b) Successfully completed a tour as CATF surgeon; OR

(c) Successfully completed:

1. Surface Warfare Medical Officer Indoctrination course or holds AQD 6OB or 6FA; AND

2. Medical Regulating course; AND

3. Landing Force Medical Staff Planning course; AND

4. Amphibious Indoctrination course.

 

6OU Fleet Hospital Assignment Successfully completed an assignment of 90 or more consecutive days at a deployed fleet hospital/EMF.
6OW Trauma Team Trained Officer Completed formal Navy Trauma training at NHSH-SD (NTCC USC-LAC Hospital) or equivalent Army or Air Force course.
6UD Diver Qualified in Saturation Diving IAW MILPERSMAN 1210-140.
6UM Submarine Qualified in Undersea Medicine IAW MILPERSMAN 1210-130.
6ZA Instructor Medical Department Officer awarded the academic faculty position of instructor by an accredited U.S. University consistent with the officer’s field of training.
6ZB Assistant Professor Medical Department Officer awarded the academic faculty position of instructor by an accredited U.S. University consistent with the officer’s field of training.
6ZC Associate Professor Medical Department Officer awarded the academic faculty position of instructor by an accredited U.S. University consistent with the officer’s field of training.
6ZD Professor Medical Department Officer awarded the academic faculty position of instructor by an accredited U.S. University consistent with the officer’s field of training.
6ZE Medical Ethicist Medical Department Officer who has successfully completed an officially approved program of training in Medical Ethics.
6ZF Researcher (a) Completed an IRB approved research project fully consistent with the guidelines as promulgated by HSETC; AND 
(b) Met the rigorous guidelines of their medical community for publication in a Peer-reviewed journal.
6ZG Residency Program Director Medical Department Officer who has met all the established criteria of the certifying agencies (i.e., Residency Review Committees for conducting an accredited training program for officers in training).
62D Faculty Development (a) Completed an ACGME approved residency, AND 
(b) Completed an accredited advanced residency in Faculty Development.
62L Clinical Epidemiology Established competence in biostatistics, epidemiology, and informatics. Preferably, a Masters in Public Health degree or comparable training/experience.
67A Executive Medicine Met all the competencies of the Joint Medical Executive Skills Program (JMESDP).
67B Expeditionary Medicine Completed the Expeditionary Medicine core operational training courses.
67H Ambulatory Care Administration (ACA) Officer A master’s degree and has successfully completed: (a) 18 months in an ACA officer related position; OR 
(b) 12 months in an ACA officer related position provided master’s degree obtained in concentration in ACA.
68H Health Promotion Coordinator Completed the Navy Environmental Health Center Health Promotion Director Course and one year experience as a coordinator.
68I Health Care Management Completed a Masters of Science in Health Care Management.
68J Public Health Emergency Officer (PHEO) (a) Completed an MPH degree or 4 years of public health experience as outlined by BUMEDINST 6200.17A;
 AND(b) Successfully completed the following distance learning courses:- FEMA IS-100.A, Introduction to Incident Command System- FEMA IS-200.A, Incident Command System for Single Resource and Initial Action Incidents- FEMA IS-700.A, National Incident Management System, An Introduction

– FEMA IS-800.B, National Response Framework, An Introduction; OR

(c) Completed the Defense Medical Training Institute tri-service PHEO training course. AND

(d) Successfully performed as a PHEO for 12 months.

NOTE: Per BUMEDINST 6200.17A, PHEOs must be clinicians, as defined as officers who can diagnose, treat, and prescribe treatment for illness and injury.

68K Alternate
Public Health Emergency Officer (APHEO) (a) Completed an MPH degree or 4 years of public health experience as outlined by BUMEDINST 6200.17A; 
AND(b) Successfully complete the following distance learning courses:- FEMA IS-100.A, Introduction to Incident Command System- FEMA IS-200.A, Incident Command System for Single Resource and Initial Action Incidents- FEMA IS-700.A, National Incident Management System, An Introduction

– FEMA IS-800.B, National Response Framework, An Introduction; OR

(c) Completed the Defense Medical Training Institute tri-service PHEO training course. AND

(d) Successfully performed as an APHEO for 12 months.

68L Clinical Informatics (1) Completed the corps appropriate certification exam or fellowship, OR

(2) Completed a certificate program or graduate degree in Informatics, or the AMIA 10X10, OR

(3) Worked >50% of their time in informatics for at least 12 months.

 

Deputy Command Surgeon, USAFRICOM – O6

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SUBJECT:  Request Nominations for Deputy Command Surgeon for Headquarters
(HQ) U.S. Africa Command (USAFRICOM)

1.  HQ USAFRICOM’s Deputy Command Surgeon is projected to depart May 2020. Request you nominate your most highly qualified officers to fill this highly visible, nominative position.  The following data is provided to assist you in your selection of a fully qualified nominee:

a. Rank: O-6
b. Occupation Specialty: Medical Position/Corps Non-Specific
c. Joint Position #: 00080853
d. Clearance: TS-SCI
e. Education:  Board Certification preferred; Senior service school/professional military education appropriate for service, and graduate education/certification appropriate for AFSC/MOS/ODC
f. RNLTD:  31 May 2020
g. Experience: Previous joint or service component staff experience; previous international or interagency experience; and O-6 level command experience preferred
h. Must have/obtain an official passport

2.  Duty description:  Serves as the COCOM Deputy Command Surgeon, responsible for managing and supervising the daily activities of the Command Surgeon’s Office. Advises the Command Surgeon on all health service support activities and policies for the employment of theater medical resources. Serves as the Command Surgeon during his/her absence.  Directs the Command medical operations cell (MOC) during crisis/contingency.  Leads surgeon staff to provide medical threat assessments and preventive medicine guidance, develop medical input/annexes to the COCOM’s campaign plan, CONPLANs, orders, and theater security cooperation/engagement plans, as well as to design, employ and manage other health service support and patient movement policies and requirements (Theater evacuation policy, theater
health service support plans, development and execution of force health protection policies and requirements.)  Coordinates and integrates service component health service support. Coordinates with the Office of the Secretary of Defense, the Joint Staff, other COCOMs, combat support agencies and service representatives to shape policy, fill requirements and optimize
resources/effects. Synchronizes with the U.S. Government interagency, international agencies and nongovernmental organizations.  Coordinates with, tasks and supports four service components staffs, one joint task force and the theater special operations command to meet CCDR’s objectives.  Maintains oversight of training and implementation of Command Surgeon policies and procedures.

3. Nominations should be submitted NLT 1 Nov 2019 to CDR Melissa Austin (contact info is in the global).  Packages must include biography, career/officer record brief (OSR/PSR), five (or
three years) of the most recent evaluation reports, and photo.  If included, letters of recommendation must be addressed to Commander, U.S. Africa Command, Unit 29951, APO, AE 09751.

TSP Fund Deep Dive – The F Fund

Posted on Updated on

There are only five investments available in the Thrift Savings Plan (TSP), so let’s take a detailed look at them one at a time. In this post we’ll cover the F Fund.

Inception Date

29 JAN 1988

Fund Management

The Federal Retirement Thrift Investment Board currently contracts BlackRock Institutional Trust Company, N.A. (BlackRock) to manage the F Fund assets. The F Fund remains invested regardless of the performance of the securities markets or the overall economy.

Investment Strategy

The F Fund is invested in a bond index fund that invests in government, corporate, and mortgage-backed bonds. The F Fund’s objective is to match the performance of the Bloomberg Barclays U.S. Aggregate Bond Index.

The F Fund is a passively managed fund that remains invested according to its indexed investment strategy regardless of securities market movements or general economic conditions.

What is the Risk?

Your investment in the F Fund is subject to market risk, credit risk, prepayment risk, and inflation risk.

Because the F Fund returns move up and down with the returns in the bond market, your F Fund investment is subject to market risk. For example, when interest rates rise, bond prices (and thus, the returns of the index and the F Fund) fall. Conversely, in an environment of falling interest rates, bond prices, as well as the index and F Fund returns, rise.

As an F Fund investor, you are also exposed to credit (default) risk, or the possibility that principal and interest payments on the bonds that comprise the index will not be paid.

The F Fund is subject to inflation risk, meaning your F Fund investment may not grow enough to offset the reduction in purchasing power that results from inflation.

Your F Fund investment is also exposed to prepayment risk, which is the probability that if interest rates fall, bonds that are represented in the index will be paid back early thus forcing lenders to reinvest at lower rates.

What is the Benefit?

Although there are several types of risks associated with the F Fund, the overall risk is relatively low in comparison to certain other fixed income investments in the market because the F Fund includes only investment-grade securities. As a result, F Fund investors are rewarded with the opportunity to earn higher rates of return over the long term than they would from investments in short-term securities such as the G Fund. Here is all the performance data as of 6 OCT 2019:

Screen Shot 2019-10-06 at 6.44.08 PM

Types of Earnings

The F Fund changes in value as the market price of its bond holdings change. In addition, the F Fund makes money for its investors with capital gains (net of trading costs), interest on notes and bonds, interest on short-term investments, and securities lending income.

BlackRock credits interest income each business day. This income is then reflected in the TSP share prices.

Share Price Calculations

The value of your account is determined each business day based on the daily share price and the number of shares you hold. At the end of each business day, after the stock and bond markets have closed, the total value of the funds’ holdings (net of accrued administrative expenses) is divided by the total number of shares outstanding to determine the share price for that day. The daily change in TSP share prices reflects all investment income (interest on short-term investments, dividends, capital gains or losses, and securities lending income) net of TSP administrative expenses.

Expenses

The net expenses paid by investors is 0.041% or 4.1 basis points, which like all the TSP funds is ridiculously low and is a major benefit of the TSP. It cost $0.41 for each $1,000 invested.

How Should I Use the F Fund in my TSP Account?

In periods of falling interest rates, the F Fund will experience gains from the resulting rise in bond prices. So in the long run, you may expect F Fund returns to exceed those of the G Fund; however, you should also expect greater price volatility (up and down movements).

It is also important to know that higher returns are not guaranteed. This is because losses may occur when interest rates are rising, causing bond prices to fall.

The F Fund can be useful in a portfolio that also contains stocks funds. This is because the prices of bonds and stocks don’t always move in the same direction or by the same amount at the same time. So a retirement portfolio that contains stock funds, like the C, S, and I Funds, along with the F Fund, will tend to be less volatile than one that contains stock funds alone.

Advice from My Favorite Short Investing Book

Here is what my favorite investing book, The Elements of Investing: Easy Lessons for Every Investor, says about investment-grade bond index funds like the F Fund:

If indexing has advantages in the stock market, its superiority is even greater in the bond market. You would never want to hold just one bond (such as an IOU from General Motors or Chrysler) in your portfolio – any single bond issuer could get into financial deficiency and be unable to repay you in full. That’s why you need a broadly diversified portfolio of bonds – making a mutual fund essential. And it’s wise to use bond index funds: They have regularly proved superior to actively managed bond funds.

They also say, “Well-diversified portfolios should have holdings of bonds as well as stocks.”

If you want to know how to integrate the F fund into your own TSP investments, read the Crush the TSP series. In particular, step 3 tells you how to figure out how much of your portfolio to devote toward bonds.