Back in December 2005, there were about 218,000 Thrift Savings Plan (TSP) plan participants who owned one of the TSP’s lifecycle funds. In 2005, the crashing stock market was still in the future and all of the TSP funds were making money. In fact, the C fund went up about 16% more in 2006 and up another 5.5% in 2007. (Check out the annual return for all of the TSP funds.)
The number of lifecycle fund participants has continue to go up. At the end of 2007, there were about 566,000 TSP investors in one of the L funds. The C fund dropped about 37% in 2008 and the number of participants in the lifecycle funds has continued on an upward trend. At the end of April, there were almost 695,000 participants in one of these funds.
In fact, says the TSP board, a record 17% of TSP investors who are under the FERS system are now invested in one of the lifecycle funds as of April 30th. 11% of TSP investors who are under the CSRS system have money in at least one of the lifecycle funds. That 11% figure is also a new high for CSRS employees but that level was reached in March 2010.
G Fund Withdrawals in April
In April, TSP investors withdrew more than $1.3 billion from the G fund and another $277 million from the F fund. These withdrawals were on top of about $1.3 billion that was also withdrawn in March from the G fund.
Where did that money go?
A lot of it went into the C fund which saw an influx of $316 million in April and the S fund which received $958 million in the same month. Investors were apparently hoping that the rise in the stock market would continue in May. With the benefit of hindsight, we know that the C fund actually declined about 8% in May while the S fund dropped 7.5%. (See TSP Funds Take a Hit in May)
While the transfer may still prove profitable in the near future, so far in June, both the C and S funds are down. While the month is still young, the C fund has declined about 10 cents per share and the S fund is down about 45 cents.