Stock indices ended down in May so the Thrift Savings Plan (TSP) funds were down for the month as well. In fact, the leading index of stock prices had its worst month in two years.
The international stock fund (I fund) was hit the hardest losing 11.4% for the month. The S fund was down 6.91% and the C fund went down 5.99%. The TSP’s F fund had the best return for the month giving investors a return of 0.91%. The G fund was also up slightly.
The federal government also revealed this week that the gross domestic product (GDP), which is the broadest measure of all goods and services produced in the economy, was not as good as previously reported. Growth in the first quarter of the year grew at an annualized at 1.9% and not the 2.2% growth previously estimated.
Despite the drop, take a close look at the chart below and you will see that the TSP funds are generally faring well for the year-to-date. (You can see the YTD figures for the TSP funds on the main TSP Corner page.) Here are the return rates for the underlying TSP funds for May and also for the year-to-date. To see the actual rate of return for each fund, just place the arrow on the bar of the fund for which you want to see the return rate.
All of the lifecycle funds were down for May as well. Here are the results for each of the L funds and their year-to-date returns:
While the return rate of the G fund is not very good, any positive return is better than losing money. As noted this week in the Wall Street Journal, commenting on the low yield for the rate of return on U.S. Treasury bonds: “After denial, anger, bargaining and depression, investors seem ready to enter the final stage of grief over low yields: acceptance.” But the rate of return may not get better. “[I]nvestors’ attitude toward record-low Treasury yields is quickly moving to a realization that, as low as they are, yields on Uncle Sam’s bonds could fall further.”
TSP Investors Move Money into G Fund in April
TSP investors in April may have anticipated the change in stock market prices. For the first time in four months, more money was moved into the G fund by investors and money was moved out of the C, S and I funds. In April, TSP investors moved $446 million into the G fund and $162 million into the F fund.
The number of participants with accounts in the lifecycle funds hit a new high in April. 809,731 TSP participants now have money in at least one lifecycle fund. For comparison, at the end of April 2011, there were 779,089 participants in at least one lifecycle fund.