All TSP Funds Up in November

By on December 2, 2014 in Current Events with 8 Comments

All 10 of the Thrift Savings Plan (TSP) funds had a positive return in November. This is the first month since June that all of the TSP fund returns have been positive. (See the monthly returns at TSPDataCenter.com.)

The C fund had the biggest gains in November with a return of 2.70%. The C fund is up 14.06% for the year. As might be expected in a month when the stock market is up, the fund with the lowest gain was the G fund which had a return of 0.17%. The G fund is up 2.12% for the year.

For the year to date, the only fund that is down is the I fund which is off 1.19% through November. TSP investors have been more pessimistic about returns for the I fund with $263 million transferred from the I fund in September. $384 million was also transferred out of the G fund in September and another $295 million was transferred from the F fund.

The C fund received transfers into the fund of of $391 million and the L funds received another $255 million in September.

Foreign stocks have generally not done as well as American stocks in the past few years. In fact, the I fund has lagged behind the C fund for five of the past six years. In 2013, the I fund had a positive return of 22.13% while the C fund had a return of 38.35%. In 2011, both the C fund and the I fund had negative returns but the I fund was down almost 12% while the C fund was down less than 4%.

In a broader context, over the past five years U.S. stocks have done well compared to foreign stocks. By one measure, U.S. stocks  have outpaced foreign stocks in developed countries by about 80%. This differential is unusual. It also means that if you have a diversified portfolio that includes a large percentage of foreign stocks by investing in the I fund, your returns over the past five years are probably behind the returns of TSP funds that are primarily invested in the C fund.

Of course, there will be cycles when foreign stocks perform better than U.S. stocks. For example, the I fund did much better than the C fund from 2004 – 2007. Predicting when the current cycle will switch is impossible to predict with accuracy but we do know that some foreign stocks, including those in Europe, are now often less expensive than U.S. stocks which have benefited from significant gains over the past several years.

Here are the returns for all of the TSP funds for November as well as for the year-to-date (YTD) and for the past 12 months:

L 2050

G Fund F Fund C Fund S Fund I Fund
Month 0.17% 0.74% 2.70% 1.33% 0.51%
YTD 2.12% 6.52% 14.06% 6.74% -1.19%
12 Month 2.32% 5.92% 16.96% 9.87% 0.30%
L Income L 2020 L 2030 L 2040 L 2050
Month 0.55% 1.04% 1.27% 1.42% 1.55%
YTD 3.81% 5.59% 6.46% 7.03% 7.38%
12 Month 4.42% 6.92% 8.11% 8.93% 9.50%

What will happen to stock prices in December? If historical precedent holds, stock prices are likely to go up again this month. According to the Wall Street Journal, for the past 117 years, the Dow has posted its best average performance in December.

Miscellaneous TSP Data

The total TSP plan balance exceeded $431 billion during the month of October while total Roth balances reached over $1.9 billion (an increase of 6.9% from last month). The average balance in the TSP for federal employees in the FERS system is now $113,934. For CSRS employees, the average TSP balance in the latest month is $113,057.

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

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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 on federal human resources.

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