What is the Best Performing Fund in the TSP?

Bonds often help an investment portfolio to be less volatile, but they also have the lowest returns over the long term. The fund that is currently outpacing all of the others inside of the TSP may surprise you.

U.S. equities markets remained in positive territory in the first half of 2016 despite some major shock waves. The first half performance for stocks is also a good sign for the second half of 2016.

Since 1950, the Dow Jones Industrial Average has ended the first half of the year positive 42 of the 66 years (64%), according to the Wall Street Journal. Of those 42 years with positive returns in the first six months, it has continued to go up 32 times (75%). Overall, regardless of first half performance, the index has gained in the second half 45 times.

The C fund is up 3.87% after the first six months of the year and eked out a small gain in June as a result of large gains in the last few days of the month and despite the turmoil in the stock market after voters in the United Kingdom voted to leave the European Union.

International stocks are not having a good year. The I fund is down 9.81% for the last 12 months, -3.44% in the first half of 2016 and -3.33% in June. With the turmoil in Europe as a result of the British election, “The epicenter of the fallout will be in the U.K. and Europe…which are likely to face the greatest economic, financial markets and political repercussions.”

Bond investors have had gains that have beat stock returns while many investors are still waiting for the bond bubble to pop. The F fund has had the best returns of any TSP fund for the month (1.8%), for the year-to-date (5.5%) and for the past 12 months (6.41%).

Here is how the individual funds in the Thrift Savings Plan performed for the first half of the year:

G Fund F Fund C Fund S Fund I Fund
Month 0.15% 1.8% 0.26% -0.13% -3.33%
YTD 0.93% 5.5% 3.87% 2.71% -3.44%
12 Month 2.02% 6.41% 4.07% -5.00% -9.81%


L Income L 2020 L 2030 L 2040 L 2050
Month 0.11% -0.12% -0.31% -0.43% -0.58%
YTD 1.46% 1.63% 1.75% 1.76% 1.68%
12 Month 1.92% 0.74% 0.16% -0.39% -1.05%


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