CREF Stock: More than it Seems

Many of TIAA-CREF’s variable annuities are broad funds that cover several asset classes. Investors who place money in these accounts must be careful to understand which asset classes are included. After all, if you want a large-cap growth fund, it should be invested in large-cap growth.  Otherwise, the integrity of the asset allocation of your portfolio can be compromised.   With this in mind, we take an x-ray in this article of the largest of all the variable accounts offered by TIAA-CREF, the CREF Stock Account.

In 1952, TIAA-CREF pioneered the innovation of the first variable annuity – CREF Stock. Since that time, the account has grown into a monster account with over $125 billion in assets. Although Morningstar has classified this account as Large Blend, it is much, much more.

The core of the account includes close to 70% invested in U.S. Equity. However, it is important to understand over 30% of this account is invested in International Equity.  Along with both domestic. and international exposure, the account also contains  close to 66% large-cap stocks, 27% mid-cap stocks, and 7% small-cap stocks.  Given the domestic and international exposure along with the variance in the size of stock capitalization, it does not make sense to hold CREF Stock as a portion of your allocation. It is truly an account that should be used as a core equity holding or not at all.

Kevin McNab

This article is written by Kevin J. McNab. Kevin is President of ACE Wealth Partners, LLC and is a CFP®, ChFC®, and CRPC®. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by ACE Wealth Partners, LLC unless a client service agreement is in place. If you have any questions regarding this Blog Post, please Contact Us. Please read our website DISCLOSURE carefully for additional information.