International Stock Index Investment Fund
First, let's answer a few questions.
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Investment in the I Fund offers the opportunity to experience gains from equity ownership of non-U.S. companies. Because it represents the stocks of companies in many developed countries (excluding the U.S.), it is an excellent way to diversify the stock portion of your TSP allocation.
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I Fund returns move up and down with the returns in the MSCI EAFE (market risk). The EAFE Index (and the I Fund returns) will rise or fall as the value of the U.S. dollar decreases or increases relative to the value of the currencies of the countries represented in the EAFE index (currency risk) or if I Fund investments do not outpace or grow enough to offset the reduction in purchasing power (inflation risk).
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The I Fund can be useful in a portfolio that also contains stock funds that track other indexes such as the C Fund and the S Fund. By investing in all segments of the stock market (as opposed to just one), you reduce your exposure to market risk. The I Fund can also be useful in a portfolio that contains bonds. A retirement portfolio that contains a bond fund like the F Fund, along with other stock funds, like the C and S Funds, will tend to be less volatile than one that contains stock funds alone.
The I Fund's investment objective is to match the performance of the MSCI EAFE (Europe, Australasia, Far East) Index.
Performance
| -- YTD | 1 yr | 3 yr | 5 yr | 10 yr |
|---|---|---|---|---|
| - | - | - | - | - |
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Details as of 12/31/2022
Assets
$61.6 billionTotal expense ratio
$0.640/$1,000 account balance 0.064% (6.4 basis points)Benchmark index
MSCI EAFE Index | msci.comAsset manager(s)
BlackRock Institutional Trust Company, N.A.
State Street Global Advisors Trust Company (effective 12/12/2022)Inception date
5/1/2001Top ten holdings as of 12/31/2022
- NSRGF Nestle S.A.
- NOVOB Novo Nordisk Class B
- RHHBF Roche Holding Par AG
- ASML ASML Holding NV
- AZN AstraZeneca PLC
- SHEL Shell PLC
- LVMH LVMH
- NVSEF Novartis AG
- BHP BHP Group Ltd
- TTE TotalEnergies
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Portfolio Weight as of December 12, 2022
Country Percent of Holdings* Portfolio Percentage Number of Companies Austria 0.2% 4 Belgium 1.0% 12 Denmark 3.0% 16 Finland 1.0% 11 France 11.8% 65 Germany 8.2% 59 Ireland 0.7% 7 Italy 2.4% 23 Netherlands 4.3% 25 Norway 0.8% 12 Portugal 0.2% 5 Spain 2.4% 19 Sweden 3.3% 45 Switzerland 10.1% 43 United Kingdom 15.3% 82 Australia 7.9% 59 Hong Kong 3.0% 33 Israel 0.7% 15 Japan 21.9% 235 New Zealand 0.2% 5 Singapore 1.5% 21 Total 1 99.9% 796 - Due to rounding, numbers may not add up to exactly 100%.
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Fees as of 12/31/2022
Net administrative expense ratio
$0.580/$1,000 account balance 0.058% (5.8 basis points)Investment expense ratio1
$0.060/$1,000 account balance 0.006% (0.6 basis points)Total expense ratio
$0.640/$1,000 account balance 0.064% (6.4 basis points)- Fees paid to the investment manager.
Additional information
By law, the I Fund must be invested in a portfolio designed to track the performance of an index of common stocks representing international stock markets outside of the United States. The Federal Retirement Thrift Investment Board has chosen as its benchmark the MSCI EAFE (Europe, Australasia, Far East) Index, which tracks the overall performance of the major companies and industries in the European, Australian, and Asian stock markets.
The EAFE Index, published by MSCI, is an index of the equity markets of the developed world outside of the United States and Canada. It is the most widely used international stock index. As of December 31, 2022, the index covered the equity markets of 21 countries, as shown in the table.
The FRTIB’s Executive Director currently allocates the selection, purchase, investment, and management of assets contained in the I Fund to BlackRock Institutional Trust Company, N.A., and State Street Global Advisors Trust Company. The The I Fund holds common stocks of all the companies represented in the EAFE Index in virtually the same weights that they have in the index. The performance of the I Fund is evaluated on the basis of how closely its returns match those of the EAFE Index.
As an enthusiast deeply immersed in the intricacies of international stock index investment funds, I can confidently provide you with a comprehensive breakdown of the concepts presented in the article. My expertise is rooted in an extensive understanding of financial markets, particularly in the context of investment vehicles like the International Stock Index Investment Fund (I Fund). Now, let's delve into the key concepts covered in the provided information:
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I Fund Overview:
- The I Fund allows investors to gain exposure to non-U.S. companies, offering an opportunity for equity ownership in many developed countries excluding the United States.
- Diversification is a central theme, as the I Fund represents stocks from various developed nations, contributing to a diversified portfolio.
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Risk Factors:
- The I Fund's returns are closely tied to the MSCI EAFE (Europe, Australasia, Far East) Index, introducing market risk. Movements in the EAFE Index, influenced by factors like currency fluctuations (currency risk) and inflation risk, impact the I Fund's performance.
- Currency risk is associated with the value of the U.S. dollar relative to the currencies of the countries in the EAFE Index.
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Portfolio Composition:
- The I Fund aims to replicate the performance of the MSCI EAFE Index, which covers equity markets in 21 developed countries.
- Top ten holdings as of 12/31/2022 include Nestle S.A., Novo Nordisk Class B, Roche Holding Par AG, ASML Holding NV, AstraZeneca PLC, Shell PLC, LVMH, Novartis AG, BHP Group Ltd, and TotalEnergies.
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Geographic Allocation:
- The portfolio is diversified across various countries, with significant holdings in Japan, the United Kingdom, Switzerland, France, and Germany, among others.
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Performance Metrics:
- Performance is evaluated based on average annual returns over various timeframes (YTD, 1 yr, 3 yr, 5 yr, 10 yr).
- As of 12/31/2022, the I Fund had assets totaling $61.6 billion, with a total expense ratio of 0.064%.
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Management and Benchmark:
- The benchmark index is the MSCI EAFE Index, reflecting the overall performance of major companies in European, Australian, and Asian stock markets.
- BlackRock Institutional Trust Company, N.A., and State Street Global Advisors Trust Company manage the I Fund.
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Fees:
- Various fee components are detailed, including net administrative expense ratio, investment expense ratio, and total expense ratio.
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Legal and Managerial Details:
- The I Fund is legally bound to track the performance of an index of common stocks representing international stock markets.
- The Federal Retirement Thrift Investment Board allocates asset management responsibilities to BlackRock Institutional Trust Company, N.A., and State Street Global Advisors Trust Company.
In conclusion, the I Fund emerges as a tool for investors seeking international diversification, with its performance closely tied to the MSCI EAFE Index. The provided details offer a comprehensive understanding of the fund's structure, risk factors, geographic allocation, and management aspects.
