TSP Quarterly Results Beat Private Sector Averages

By on July 7, 2005 in Current Events with 0 Comments

The latest monthly results for the TSP are in and the second quarter of the year has now closed. (You can get detailed performance reports for each fund in the TSP corner.)

Here are the second quarter results for the TSP funds:

  • G fund: 1%
  • F fund: 3%
  • C fund: 1.6%
  • S fund: 5.5%
  • I fund: -1%
  • Most readers believe the TSP is a good investment and are quite happy with their investment returns. Some readers think the TSP should offer more options and give them a chance to increase their returns by making more complex investments available.

    Regardless of your views, here are some statistics that will give you a perspective on the performance of the TSP funds.

    Some of these funds lend themselves to comparison with private sector funds. (The G fund invests in bonds issued to the TSP so it is unique.)

    It is unlikely that the TSP funds will beat the best performing funds for a quarter as some of the highest flyers are often based on much more risky investments than the funds available to TSP investors. So, while some of these current stars may do well for a month or a quarter, they are also likely to crash quickly and most TSP investors don’t want their retirement funds to have that much volatility.

    According to the Wall Street Journal, S&P 500 stock funds had an average return for the second quarter of 1.22%. The C fund is based on this index and it gave TSP investors an edge as the C fund finished with a return of 1.6%.

    Small cap core funds had an average return of 3.3% for the second quarter. TSP investors again finished ahead of this as those readers with money in the S fund saw a return of 5.5%.

    TSP investors with money in the international stock fund (the I fund) probably are not too happy as it was the only fund with a negative return for the second quarter. The average international stock fund also lost money in the second quarter, according to the Journal, with a negative return of 0.74%.

    The average taxable bond fund had a positive return in the second quarter of 2.13%. The TSP’s F fund, which tracks the overall bond market of the United States, returned 3%.

    The TSP does not have a real estate fund and if the TSP does start adding sector funds, the nature of the TSP would change to a more complex investment option and, no doubt, create confusion and uncertainty among some investors. Nevertheless, some have suggested that these real estate funds be added to the TSP. For the second quarter of this year, these funds are up 13.1% and the average real estate fund is up 31.9% for the year.

    Overall, TSP investors have reason to be pleased with their TSP investments. As we have pointed out before, the TSP has a lower cost ratio than the vast majority of mutual funds and gives federal investors an investing advantage over their private sector counterparts. As you can see from the figures above, there is a difference between your funds and their counterparts. Over time, these differences will give TSP investors significantly more money for a more financially secure retirement.

    © 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.


    About the Author

    Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters onĀ federal human resources.