TSP Has Another Strong Month in October

All the funds in the Thrift Savings Plan made gains in October, marking the second consecutive month of across-the-board growth.

The C Fund, invested in common stocks, had the strongest October, increasing 4.6 percent. The I Fund, which invests in international stocks, saw a 3.38 percent jump, though that figure is down from a more than 7 percent increase in September. The C and I funds have both climbed 27.2 percent over the last 12 months.

The TSP saw expansive movement in October, as government employees reorganized their portfolios in light of the government shutdown and the threat of the U.S. Treasury defaulting on its debts. Participants made 128,000 inter-fund transfers during the 16-day shutdown, a “significant” number of which went into the government securities (G) fund, according to the Federal Thrift Retirement Investment Board. Thousands of federal employees also took hardship withdrawals from their accounts during the shutdown, meaning they cannot contribute to their plans for six months.

After the shutdown ended on Oct. 17, feds began moving their investments back into equity, transferring more than $1 billion into the S Fund alone on the first day of the government’s reopening. The S Fund, which is invested in small and midsize companies and tracks the Dow Jones Wilshire 4500 Index, was up 2.94 percent in October. It has been TSP’s strongest performer over the last 12 months, increasing 36.72 percent.

The G Fund once again rose 0.19 percent last month, and has gained 1.75 percent over the last year. Though the Treasury temporarily suspended investments into the G Fund as a part of “extraordinary measures” taken to delay the date at which the government would default on its debts, all payments have been restored.

Fixed income funds also saw modest growth in October, increasing 0.89 percent. The F Fund is the TSP’s only investment in the red over the last 12 months, down 0.75 percent.

Lifecycle funds -- designed to move investors to less risky portfolios as they near retirement -- also yielded positive returns, albeit slightly lower increases than in September. The L Income Fund for TSP participants who have already started withdrawing money ended October up 1.01 percent. L 2020 increased 2.23 percent for the month, L 2030 gained 2.75 percent, L 2040 was 3.11 percent in the black and L 2050 saw a 3.47 percent boost.

The lifecycle funds all have remained in the black for the last 12 months. L Income was up 6.6 percent; L 2020, 15.42 percent; L 2030, 19.35 percent; L 2040, 22.3 percent; and L 2050, 25.22 percent.

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