February a cold month for the TSP

Growth in the Thrift Savings Plan slowed in February, with the dependable government securities (G) fund delivering the largest gains at a modest 0.36 percent.

The TSP is a 401(k)-style retirement savings program for federal employees. The funds that invest in small and international companies were both in the red last month, after especially strong showings in January. The S Fund, which invests in the stocks of small- and mid-sized American companies, lost 0.98 percent, and the international (I) fund lost 0.27 percent.

Despite negative performances in February, these two remain the biggest earners for the past twelve months. The I Fund grew 17.48 percent in that time, and the S Fund gained 18.39 percent.

The I Fund's strong performance over the past year has led increasing numbers of TSP participants to invest in it. In January, for example, participants added $753 million to the I Fund through interfund transfers, making it the only stand-alone fund to log an increase.

By contrast, participants that same month removed $1.2 billion from the C Fund, which invests in the stocks of the 500 largest domestic companies. In February, the C Fund increased 0.22 percent, bringing its twelve-month growth to 8.4 percent.

The F Fund, made up of fixed-income bonds, gained 0.28 percent last month, bringing its twelve-month total to 2.78 percent.

The G Fund's 0.36 percent gain leaves it with a 4.46 percent growth over twelve months.

In keeping with the performance of the underlying funds, the TSP's five Lifecycle funds, which are composites of the stand-alone funds, automatically adjusted to become more conservative as employees draw nearer to retirement, had poor months as well.

The L Income fund, which is designed for employees expecting to retire in the next few years and is most reliant on the G fund, grew the most at 0.25 percent. The L 2010 fund, meant for employees anticipating retirement around the year 2010, showed 0.15 percent growth, the L 2020 fund gained 0.07 percent, the L 2030 fund stayed steady and the L 2040 fund was down 0.07 percent.

This is the first time since the L funds' inception last summer that the L 2040, the most aggressive of the group, has not been the highest performing fund. The reversal fits with the lifecycle philosophy, which is that employees with longer to go until retirement can afford to invest in riskier funds and ride out low performances in return for the potential of higher long-term gains.