C Fund Providing Best Investor Returns in July and YTD
The S&P 500 index (the index on which the C Fund in the TSP is based) has gone up for six straight months. This is the longest winning streak for this index since 2018. It finished the month of July only 0.6% off its record high set earlier in the last week of the month.
In July, the C Fund was up 2.37%. This was the best return among the core funds in the Thrift Savings Plan (TSP). The last month in which the C Fund showed a negative return was in January when it declined -1.01%. For all of 2020, the C Fund had an annual return of 18.31%.
So far in 2021, this Fund is up 17.98%.
S Fund Slips—But Up 51.07% in 12 Months
The S Fund has been on a tear for a number of months. This Fund finished ahead of all others in 2020 with a return of 31.85%. That followed a gain of 27.97% in 2019. So far in 2021, the S Fund is up 14.04%. For the past 12 months, it is up 51.07%—far ahead of the second-place C Fund with a return of “only” 36.42%.
G Fund Returns 0.77% in 2021
The G Fund is one of the most popular funds in the Thrift Savings Plan. Readers often invest in it as it is considered the safest fund for retirement assets.
The return for investors in the Fund has never been negative. But, with inflation rapidly going up and stoking memories of inflation raging in the early 1980s, a year-to-date return of 0.77% is still a loss of purchasing power for the money in this fund.
For comparison, the L Income Fund is a conservative Fund with some of its assets in the stock funds. For the year-to-date, the Income Fund has a return of 3.77% and for the past 12 months, it has provided investors with a return of 8.17%. Compared with the G Fund returning 1.09% over the past 12-months, with the benefit of hindsight, the L Income Fund looks much better.
Of course, when the market drops again, the G Fund will continue to provide a positive return. With stock index funds sitting at or close to all-time highs, a drop in the market in the coming months would not be a big surprise.
Here are all of the returns for all of the TSP Funds for July, for the past 12-months, and for the year to date. TSP investors can check out all TSP Fund returns at any time in the TSPDataCenter.
TSP Returns for All Funds
| | G Fund | F Fund | C Fund | S Fund | I Fund |
| Month | 0.13% | 1.15% | 2.37% | -1.24% | 0.72% |
| 12 Month | 1.09% | -0.52% | 36.42% | 51.07% | 30.49% |
| YTD | 0.77% | -0.37% | 17.98% | 14.04% | 9.77% |
| | L Income | L 2025 | L 2030 | L 2035 | L 2040 |
| Month | 0.47% | 0.75% | 0.92% | 0.99% | 1.05% |
| 12 Month | 8.17% | 16.95% | 21.24% | 23.38% | 25.57% |
| YTD | 3.77% | 7.09% | 8.91% | 9.70% | 10.51% |
| | L 2045 | L 2050 | L 2055 | L 2060 | L 2065 |
| Month | 1.10% | 1.15% | 1.26% | 1.26% | 1.26% |
| 12 Month | 27.50% | 29.45% | 36.39% | 36.38% | 36.38% |
| YTD | 11.19% | 11.89% | 14.42% | 14.42% | 14.42% |
Stock Market Concerns
While the stock market was up for the month, the gains were not consistent. Small-company stocks have slowed as can be seen in the negative returns for the S Fund in July. Larger company stocks often pay dividends and can provide a better return than bonds during an inflationary period. It is not surprising the C Fund went up in July while the S Fund had a small decline.
While another pandemic is probably not on the horizon, there are increasing concerns about the COVID virus and its variants. New pronouncements from the Biden Administration about the rapid spread of the virus and new policies requiring the wearing of masks and possible mandates for vaccinations are not positive news for the stock market.
There is also news that market conditions for housing, vehicles, and other household durables are at their lowest level since the early 1980s.
The Thrift Savings Plan has been very good to its investors as the stock market has gone up. The increasing number of TSP millionaires is an indication of how much this program has helped investors.
With stocks recently setting performance records, it is a good time to consider your TSP investments and, if necessary, consider if your investments match your long term financial goals.
We wish all readers and TSP investors the best of luck in their investments through the rest of 2021!
