S Fund Scores Big in April: TSP Investors Moved Out of G Fund in March

For the third month in a row, investors in the federal Thrift Savings Plan (TSP) are enjoying positive returns in most of the TSP funds. In March, some TSP investors decided to move money into the small company fund. The gamble paid off in April.

For the third month in a row, investors in the federal Thrift Savings Plan (TSP) are enjoying positive returns in most of the TSP funds.

For the month of April, all of the underlying TSP funds and the L funds had a positive return with the exception of the I fund. That fund lost 2.35% for the month and is down 1.52% for the year—but it is up 34.76% for the past 12 months.

The fund with the best return last month was the S fund with a return of 4.82% in April. It is up 15.21% for the year (it is also the fund with the best return year-to-date) and it is up 50.87% for the past 12 months (it is also the fund with the best return over the past 12 months).

International stocks have been troubled by a volcanic eruption from beneath a glacier in Iceland and concerns about the debt of European nations, particularly Greece. But, while the news media was covering the bomb dropped on Goldman Sachs by the administration, problems in Athens and tracking flight cancellations in London, the American economy was forming into a classic recovery from a recession. Company earnings have been better than expected (although companies often play down expectations) and the gross domestic product was up about 3.2% in the first quarter.

March TSP Transfers

Some TSP investors benefited more than others from April’s profitable returns in the S fund.

In March, TSP investors transferred more than $1.3 billion from the G fund and another 56 million from the F fund. These are the two more conservative underlying TSP funds. $799 million went into the S fund and $51 million went into the C fund. Another large chunk of money, $699 million, was moved into the L funds. Another $146 million was transferred out of the I fund.

Growing Popularity of the Lifecycle Funds

Another trend that is apparent in the Thrift Savings Plan is the growing popularity of the lifecycle funds. As investors get more comfortable with the performance of these funds, and probably as a result of the rapid changes in the stock market, more TSP investors are putting their money into these funds.

12% of FERS TSP account balances are now in the L funds. Also, there are now about 681,000 participants in the L funds. By comparison, the number of L fund participants at the end of December 2008 was less than 585,000.


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. Follow Ralph on Twitter: @RalphSmith47