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Small and international stocks, two of the riskier and increasingly popular fund options in the Thrift Savings Plan, led the pack in March for earnings, while only fixed-income bonds lost ground.

The S Fund, which invests in the stocks of small- and mid-sized American companies, grew the most at 3.84 percent last month. The fund tracks the Dow Jones Wilshire 4500 Index, which invests in the 4,500 next-largest domestic companies after the 500 tracked by the common stock, or C Fund. March's growth brings the S Fund's 12-month gains to 25.26 percent -- also the highest increase.

The TSP is federal employees' 401(k)-style retirement savings plan. It offers five basic fund options (S, I, C, G and F) and a number of life cycle funds, which represent a mix of the five funds, with the blend growing more conservative as investors age.

International stocks, the second highest earner, grew 3.33 percent in March, for a 12-month total gain of 24.53 percent, also the second highest. The I Fund invests in stocks in Europe, Australia and some countries in Asia.

TSP administrators have reported a jump in I Fund investments over the past year, as plan participants respond to the relatively higher gains that option has posted.

The C Fund, which tracks Standard & Poor's 500 Index, gained 1.29 percent for March. Its 12-month gain is 11.71 percent.

The government securities, or G Fund, which is the most reliable TSP fund with a guaranteed small but steady growth, earned 0.36 percent last month for a yearlong 4.44 percent increase.

The F Fund, the lone loser among the five basic fund options for March, dropped 0.93 percent. Made up of fixed-income bonds, the F Fund's 12-month earnings are still positive, at 2.31 percent.

All of the TSP's life cycle fund options, which automatically adjust as investors near their target retirement date, saw gains this month. The funds designed for younger employees grew the most, because they include larger proportions of investments in the S and I funds.

The L 2040 fund, designed for TSP participants anticipating retirement around the year 2040, grew 1.98 percent in March. The L 2030 Fund gained 1.71 percent; the L 2020 rose 1.56 percent; the L 2010 increased 1.19 percent; and the L Income, designed for employees with planned retirements in the very near future, gained 0.67 percent.

March's performance marked a reversal from February, when the G Fund delivered the largest gains at 0.36 percent and the S and I funds were both in the red. January, however, had the S and I funds out in front, in keeping with their high 12-month performance levels.

COMMENTS

• A few notes: 1. Please remember that for the first couple of years of the S and I funds, any money put in there got smaller by the month. While currently doing well, those are the most volatile of all the funds. 2. Please note "the pendulum swing." 95 percent of the time, when the stocks are up the F Fund is down, and vice versa. So saying, my money's headed for the F Fund the next time the stock funds tank out. That is the primary reason I am not in the L Funds. I feel the overall economy is still rising and any money in the F Fund will decrease. Tip out. Tip Posted April 5, 2006 3:34 PM
• "Senior special agent" and “Taxpayer,” you both have valid points, but I ask you to consider… 1. Most economic plans and cycles have a five- to seven-year span, and the stock funds have been going relatively strong for the past three and a half years. 2. Previously I felt strongly about the strength of our economy and thought we would be secure with an aggressive posture for the next year or two. This worked out, coincidently, with the next presidential election; no credit to the incumbent. I back my thoughts with my actions and currently have 95 percent stock funds, with the majority in S and I funds but the largest single in the C Fund. However, with the looming UAW strike, the possible domino-effect on the heavy metals industry (substitute the Dow), and the trickle down effect on supporting businesses (substitute the small caps), I recommend y’all keep your eyes on the June negotiations. Please remember, like Taxpayer says indirectly, where our economy goes, the international follows (and there’s that I Fund). If the UAW can foresee the results of their actions and work with the business managements for an equitable solution, I still see good things for the before mentioned time period. Looking to the other side, much of it will depend on how much leverage the auto industry feels and how greedy they get. Remember, life’s a gamble. Tip off. Tip Posted April 4, 2006 4:31 PM
• Hit it right on the nail, Taxpayer. Too bad the government won't start paying us in British pound or Euros. The dollar will continue to fall further. GovExec.com reader Posted April 4, 2006 8:59 PM