The Thrift Savings Plan (TSP) rates are in for April and investors should be very pleased with the results.
TSP Fund With Highest Returns YTD
So far in 2019, the S fund is up 20.27%. The C fund comes in second at 18.25%. For the past 12 months, the C fund has the best return overall with this fund providing a return of 13.48% for TSP investors.
For the lifecycle funds, the L 2050 is up 13.93% so far in 2019 which is the best return among the L funds.
The TSP returns reflect the overall vibrant results of the stock market. The American stock indexes have just experienced their best four-month start in a year since 1999.
These results are likely due to the Federal Reserve backing off significant raising of interest rates and the promising economic prospects for our economy. Market analysts generally credit the Federal Reserve’s move to hold interest rates steady with stopping one of the most punishing selloffs of the long-running bull market late in 2018.
The Dow Jones Industrial Average finished April up 14% so far in 2019. This is the best four-month start since 1999. The S&P 500 (on which the TSP C fund is based) is up 18% this year which is the best return at this point of the year for the S&P 500 since 1987.
Here are the results for all of the TSP funds through April.
Monthly and 12 Month TSP Returns
|G Fund||F Fund||C Fund||S Fund||I Fund|
|L Income||L 2020||L 2030||L 2040||L 2050|
TSP Facts of Interest
There are now more than 3.4 million FERS employees investing in the TSP. They have an average TSP balance of $142,512. The average Roth balance is $13,517 for the 554,242 FERS participants with a Roth plan in the TSP.
There are almost 311,000 CSRS plan participants in the TSP and their average balance is $150,467. The average Roth balance is $20,778 for the 10,000 or so participants with a Roth plan.
There are now more than 1.4 million uniformed services participants in the TSP and their average TSP balance is $26,630. There are 522,294 uniformed personnel with a Roth plan and their average balance is $9,005.
How TSP Participants Invest
TSP investors are conservative in selecting funds for their investments. While stock funds have the best overall returns, the G fund is the most popular fund as of March 31, 2019. The C fund is in second place with a participant allocation percentage of 38.5%.
In the annual TSP rates of return since 1988, the C fund has come out ahead of the G fund 22 times. The G fund has had a better annual return than the C fund 8 times since 1988.
The G fund is often thought of as the safer fund though because it never loses money in any year. So, while an investor would have been much better off financially since 1988 putting all investment dollars into the C fund, the thought of investing in the safer G fund is the most likely reason TSP investors still put more of their investment dollars into the G fund.
The best year for the G fund was in 2008 when this fund had a return of 3.75% while the C fund lost almost 37%. The best years for the C fund coming out on top were 2013 (32.45% for the C fund and 1.89% for the G fund and a similar differential in 1993.)
Here is how TSP investors have allocated their investments among the TSP funds as of March 31, 2019.
While the overall average favors the C fund, how will TSP investors do in 2019?
So far, the C fund has a return of 18.25% while the G fund comes in with a return of 0.88%. We do not, of course, know how the market returns will look by the end of the year.