Federal Retirement Thrift Investment Board, Washington, completed its addition of State Street Global Advisors as one of two managers for three index funds, the board announced at its monthly meeting Tuesday.
State Street now manages roughly $57 billion of the $762.3 billion Thrift Savings Plan.
The contract to add SSGA was awarded in October 2020, with each manager having a two-year base period and four two-year extension options.
Previously, the index funds were solely managed by BlackRock. The concept of reducing "organizational concentration risk" started years ago, and was fully implemented as of June 14, executive adviser Ernest Witherspoon said at the virtual meeting.
TheThrift Savings Plan, the retirement system for 6 million federal employees and members of the uniformed services, offers participants five investment funds: four index funds and the G fund of specially issued Treasury securities that is managed internally by the board.
The I Fund, with $66.9 billion in assets, is a stock index fund that tracks the MSCI EAFE (Europe, Australasia and the Far East) index and is managed by BlackRock.
The F Fund, with $37.5 billion in assets, is a bond index fund that tracks the Bloomberg Barclays U.S. Aggregate Bond index; the C Fund, with $284.8 billion in assets, is a stock index fund that tracks the S&P 500 index; the S Fund, with $108.9 billion in assets, is a stock index fund that tracks the Dow Jones U.S. Completion Total Stock Market index.
State Street Global Advisors has about 20% of F Fund assets, 10% of C Fund assets and 20% of S Fund assets.
In the two-week period from May 14 to market close May 31, the Small Mid Cap index rose 2.87%, S Fund assets managed by BlackRock gained 2.86% and those managed by State Street gained 2.84%, according to meeting materials.
Year-to-date, BlackRock's performance for the F Fund beat the fixed-income index by 9 basis points, primarily due to securities lending, while its performance for the C Fund was in line with the large cap index. For the S Fund, BlackRock exceeded the small- and midcap index by 7 basis points, primarily resulting from securities lending.
Aon Hewitt Investment Consulting helped FRTIB officials with transitioning State Street's portion of assets for the three funds.
