Which TSP Fund has Highest Return YTD and Lowest Participation Rate?

Which TSP fund has the highest rate of return among TSP funds so far in 2015 and tied for last place among investment options selected by TSP investors?

As noted in a recent article on the Thrift Savings Plan (TSP), total plan assets in the TSP have passed $450 billion for the first time and the participation rate by federal employees in the FERS retirement system is up to 88.1%. The average Roth account balance for FERS employees was $6,005 as of February according to the TSP Board.

The participation rate for CSRS employees is 59.6% and it is 41% for military personnel.

34% of TSP investments are in the G fund followed by 28% in the C fund and 17% in the lifecycle funds. The lowest participation rates are in the F fund and the I fund—both of which have 5% of TSP assets. The S fund has 11% of TSP investments.

Despite its relative unpopularity with TSP investors, the I fund is ahead of all other TSP funds for the year-to-date with a return of 5.7%. 2012 was the last year that the I fund came out ahead of the larger C fund. In 2012, the I fund returned 18.62% while the C fund had a return of 16.07% for the year.

Although the C fund has a higher rate of return that the I fund in many recent years, the I fund can provide diversification in an investment portfolio for TSP investors as foreign stocks often have a different rate of return that the broad index of the U.S. stocks in the C fund.

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