The Thrift Savings Plan or TSP Fund has a large selection of funds for you to choose from, including both individual and lifecycle funds. You can be offered a broad market diversification with these TSP Fund Options, too. At the same time, you can also choose between multiple options of investing your savings in a number of schemes, from index funds of both international and domestic stocks to a short term U.S. Treasury security. Lets have look on the overall TSP fund performance
To find out the TSP fund performance history to make investment decisions, you can get help from a number of important data tables, including share price history, monthly returns of investment, annual returns of the TSP investment funds, summery of previous returns, and much more such information hub.
Available TSP Funds and Its Performance
There are a number of TSP funds available for your investment plans for you to choose from, namely: G Fund, F Fund, C Fund, S Fund and I Fund. You can find a detailed description of each of these funds below that will hopefully help you to choose the right one for your future. However, here are some tips to follow that will help you to choose:
- You need to consider both the risk and the return of the funds;
- You have to be completely comfortable with the risk you are going to take;
- If you diversify your account into multiple funds, you can actually reduce your risks;
- Your risk is dependent on the horizon of your investment time; and
- You need to review your investment choices every now and then periodically.
G Fund – the Government Securities Investment Fund
The TSP G fund is actually an investment fund that offers you the chance to earn an interest rate that is quite similar to the amount of any United States Government bonds and notes. However, in this investment plan, there will not be any risk of any loss in the principal amount as well as there will be very little loss in the volatile earning.
The main objective of the TSP G fund rate is to maintain a return that will always be higher than the inflation rate, but at the same time, won’t expose the fund to any kind of risk in the market. This is long-term investment plan, usually invested in the exceeds U.S. Treasury securities. It can also be called a “no credit risk” fund option.
**Graphs of Growth of $100 since the Inception (source: tsp.gov)
It is a law that the TSP G fund must be invested within the nonmarketable United States Treasury. All the entries are kept in electronic data and do not involve in any TSP transaction costs. The total earnings consist of interest income of the securities, and nothing else, and the interests on this “G Fund” securities outpace inflation and T-bills (90-day) over a certain amount of time.
F Fund – the Fixed Income Index Investment
With the TSP F fund, you get the opportunity to earn a rate of return that actually exceeds the rate of money market fund over a very long term, especially during certain periods when the interest rate is declining. The main objective of this TSP F fund performance is that it matches the TSP performance of the renowned Barclays Aggregate Bond Index of the United States – a bond that represents the U.S. bond market.
**The above graph is of growth of $100 since the Inception (source: tsp.gov)
The credit risk of non-payment of both principal or interest is comparatively low for “TSP F Funds”. This is because the securities of this fund are only of investment-grade and diversified broadly. Although, you will face some kind of market risks in F Fund, i.e. there will always be a risk that the value of the underlying securities can start to decline. There will also be prepayment risk, i.e. the risk of a security in the fund be repaid before it becomes mature.
C Fund – The Common Stock Index Investment
A TSP C fund allows you to earn a high return on your investment over a relatively longer period of time. You can do this from a broadly diversified consist portfolio from a number of medium- and large-sized companies in the United States.
The sole objective of this TSP C fund performance is to try and match the performance of the 500 Stock Index of Standard & Poor, which is a market index that has been made up with the stocks from 500 US companies, both very large ones and medium-sized ones.
*Growth of $100 since Inception (source: tsp.gov)
You will face a risk of a heavy loss in the TSP C fund, especially if the S&P 500 Index happens to decline because of any kind of change in the economic condition of the market, i.e. market risk, as it is more generally known as. The earning from TSP C fund consists of any gains or losses in the dividend income and the price of stocks.
“S Fund” – The Small Capitalization Stock Index
With the TSP S fund, you will be given an opportunity to earn a relatively high return on your investments over a longer period of time. You can do this by investing in the medium- and small-sized stock companies of the United States of America.
The TSP S fund performances has been designed to match the performances similar to the Dow Jones Index of the U.S. Completion Total Stock Market, or TSM Index. This broad market index has been made up of stocks from the U.S. companies that are not included in the S&P 500 Index companies. However, there is a risk of loss in this investment plan if the TSM Index happens to decline in response to any changes in the economic conditions of the market, i.e. market risk.
** S fund Growth of $100 since the inception (source: tsp.gov)
Any earning you get from “TSP S Fund” is a result of the gains and losses of the pieces of stocks and income from the dividend.
I Fund – International Stock Index Investment
With TSP I fund, you can get the opportunity to earn a high investment return by investing long term in a number of stock of companies that are situated in developed countries outside of the United States of America.
This TSP I fund performance needs to match the performance of the Index of the MSCI EAFE, i.e. the MSCI of Europe, Australasia, and Far East Countries. There can be a risk of loss if the EAFE Index happens to change in response to market risk or overall economic condition, or if there is any change (i.e. increase) in the U.S. currency value.
The earnings from “TSP I Fund” consist of any gains or losses from prices of stocks or changes in currency that are related to the U.S. dollar, and from income from dividend.
TSP Lifecycle Funds – It’s Objectives and Allocation
The TSP Lifecycle Funds or the “L” Funds are investment mixes that have been professionally determined to meet the objectives of certain investment plans. These certain investment objectives have been based on a number of time horizons. The objective here is to strike a balance between the expected risk of each fund and the return from that fund.
Features of TSP Lifecycle Funds
The L fund is one of the best lifecycle funds strategy that is actually a mix of F, G, I, S and C Funds. They are based on a particular time horizon or a targeted retirement date. An unique feature of the L fund is that it becomes more and more conservative as it’s targeted retirement date approaches.
The Strategy of the “L” fund assumes that:
- If you have more number of years between now and the date of retirement, the more you are able to tolerate any kind of risk or fluctuation in your TSP account. This will give you the chance to pursue a high rate of return.
- For a given time horizon and risk level, the right mix of G, C, S, F and I funds can give you the highest return on your expectations.
Every L fund has a specific target allocation, i.e. each lifestyle L fund is made up of a specific combination of the five other TSP funds (G, C, S, F and I funds). This creates a balance between the investment risks and rewards for a specific time horizon.
Under the L fund, all the risks of the G, C, S, F and I funds are also applicable. Your account will not be guaranteed against any loss you may face. Just like any other individual TSP fund, the L Fund can also have temporary periods of loss and gain.
The L fund also happens to be a simplification of all the other funds. You have the option to choose a fund that has the closest date to your target date, or you can also split your account between any number of funds (usually two) that have the closest target dates.
Available lifecycle funds and Its Performance
L Income fund
L Income Fund is for participants who are currently thinking of withdrawing their TSP account in forms of regular monthly payments, or for people who are planning to start withdrawing in monthly payments before 2019 starts. The objective of this fund is to achieve a steady but low growth but with a high emphasis on the preservation of present and future assets.
Unlike all the other L funds, the asset allocation of the L income fund does not change with every quarter. On the other hand, it is balanced almost every day to maintain the target of the investment.
This investment plan is for investors who plan to withdraw all their money within January 2019 to December 20124. The objective of the L 2020 is to achieve a moderate and steady level of growth that will place a moderate emphasis on your preservation of assets.
The L 2020 fund is allocated quarterly just like G, C, S, F and I funds. The details are given in the pie charts in details. In July 2020, the L 2020 Fund will automatically roll into the L income fund. This will happen when the allocation becomes the same as the L income fund allocation.
This plan is for people who want to withdraw their invested amount from 2025 to 2034. This fund places a low emphasis on preservation of assets but will give you a moderate or high level of growth, which is preferable to some. The L 2030 fund is also adjusted quarterly and will roll into the L Income Fund automatically in July 2030. This will happen when the allocation becomes the same as the L income fund allocation.
The L 2040 fund is for people who are planning to withdraw their money any time from the beginning of 2035 to the end of 2044. This fund achieves a high growth but puts a very low emphasis on the preservation of assets.
Like all the other funds, the L 2040 fund is adjusted quarterly. The L 2040 fund will automatically roll into the Income Fund in July 2040. This will happen when the allocation becomes the same as the L Income fund allocation.
People who are planning to withdraw their invested money in the year 2045 or later than that is perfect for L 2050. This fund achieves a high growth but also puts a very low emphasis on the preservation of assets. Like all the other funds, the L 2050 fund is adjusted quarterly, and will automatically roll into the L Income Fund in July 2050. This will happen when the allocation becomes the same as the L Income Fund allocation.
On the basis of the above TSP fund performance take the right decision whether you will be invested for better future!