Q. You wrote, “the presence of the G Fund allows you to configure portfolios that produce risk/return characteristics that are superior to those available anywhere else.” I’m not aware that you could configure your own portfolio in the Thrift Savings Program, other than the index funds and L funds. Are you saying one shouldn’t own even no-load, low-fee mutual funds, more narrowly targeted than broad index funds, in an IRA?
A. I was referring to configuring a portfolio using the five basic TSP funds. I know of no reason to use anything other than low-cost index funds for retirement investing. While breaking down the TSP’s stock and bond funds into more narrowly defined segments might have some advantage, this advantage is not large enough to outweigh the TSP’s low cost and G Fund option.