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Tiaa-creff Poor Performance?

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Recently a large employer ruled out TIAFF-CREF right immediately because the consulatant told the group that their (TIAA-CREF) funds, when compared to other mutual funds available with other companies lagged the market. In this analysis, the following was taken into account:

 

1) 3 and 5 year historical performance

2) relative performance with peers based on value added i.e. the percent that a manager OVER performs the relevant index. (excess return)

 

In this scenario, if a fund consistently overperforms an index by, 5 % or more, let's say, then a .50 fee differential becomes potentially meaningless.

 

What is the actual analysis of the TIAA-CREF funds relative to other mutual fund offerings when EXCESS RETURN over a long period of time is factored in?

 

I know this has a potential level of emotionality for many of the posters here. Can we keep it objective?

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Tiaa-Cref mutual funds are not available for employer sponsored programs like 403(b) so I assume you are referring to their variable annuity menu. Can you tell us which family of funds or insurance company this large employer finally adopted? Is it no-load?

 

Peace and "objectivity"

Joel L. Frank

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Joel. I've been talking with TIAA-CREF and they now offer their mutula funds as an option to add to ones 403(b) plan. They also offer other funds that can be added too: two Vanguard funds and four DFA funds.

 

Garry

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Garry,

 

Cref mutual funds plus two Vanguard funds plus four DFA funds for most seasoned observers would amount to an excellent platform. Would you not agree? Also, as a reminder please tell us which family of funds or insurance company did this large employer settle on. Is it a no-load offering?

 

Peace,

Joel

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We were looking at TIAA-CREF (and had them in here a few weeks ago), but my HR department needs a lot of hand holding and TIAA-CREF is located about 2 hours away. They don't have an office in town. We have gotten use to having a Valic Rep close by. HR has relied on him to do a lot of the paperwork. So, now I'm looking at vendors that are located in town, but not insurance companies. I found a regional bank that offers 403(b) plans to non-for-profits. Their plan contains all mutual funds, not annuities. Some of their fund offerings are with Fidelity, American Century and Dreyfus (good low cost companies). The bank has some administrative fees, but still a better value than Valic. And they can offer us the face-to-face customer service that the employees and HR department need. I'll keep this forum posted on future developments.

 

Garry

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Hi,

 

This consultant was referring to TIAA-CREF's Variable annuities and that they have had sub-par performance relative to similar funds/indices. A major negative was that they were late to the game adding the mutual funds and that they didn't have enough of a history (the mutual funds, not the VA's.)

 

Has anyone looked at their VA funds and their RELATIVE performance? I don't mean how many "stars" they get, I am referring to a more sophisticated anaylsis taking into account factors like "excess investment return" and performance relative to peers.

 

Thanks for our discussion of this. I have a very difficult time getting objective performance info on variable annuities.

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