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Analyzing the TIAA-CREF Equity Index Fund’s Retail Exposure

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YTD performance

The TIAA-CREF Equity Index Fund-Retail (TINRX) returned 2.2% for the YTD period ending November 19, 2015. Its benchmark, the Russell 3000 Index, returned 0.5% in the same period.

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TINRX’s retail exposure

The TINRX has retail exposure of 22.2% of net assets, which is high compared to its peers in this review. The consumer discretionary sector has a weight of 13.6% in the fund’s portfolio and the consumer staples sector has a weight of 8.6% in the fund’s portfolio. Meanwhile, the consumer discretionary and consumer staples sectors form 15% and 7.8% of the fund’s benchmark, the Russell 3000 Index.

Jobs added in October

The Bureau of Labor Statistics reported that 271,000 non-farm jobs were added in October, and the unemployment rate was down to 5%. According to the report, average hourly earnings in October grew 6% on a month-over-month basis and 2.5% on a year-over-year basis. The report further strengthens the possibility that the FOMC (Federal Open Market Committee) will hike rates at the next policy meeting on December 16, 2015. The TINRX has a 22.2% exposure to retail companies, which is the most exposure to the sector out of all mutual funds we cover in this review. Thus, the fund will benefit from higher sales for retail companies.

TINRX’s retail stocks

For September 2015, TINRX’s top holdings in retail stocks included Amazon (AMZN), which makes up 0.9% of the fund’s assets, Coca-Cola (KO) with a portfolio weight of 0.8%, Altria Group (MO) with a portfolio weight of 0.5%, and McDonald’s (MCD) with a portfolio weight of 0.5%.

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