Lackluster Performance of Core TSP Stock Funds in First Quarter
2022 has not been a good year so far for the TSP. Despite a better performance in March, the returns overall are down so far in 2022 based on the latest monthly TSP returns.
The first quarter of the stock market ended on March 31st. It is the worst-performing quarter for stocks in the past two years.
The reasons are easy to understand. Inflation is the highest it has been in 40 years, Russia has invaded Ukraine and that war is now spilling over into Russian territory as well, and we know the Federal Reserve is going to raise interest rates. What we do not know is how much interest rates will be going up, how fast the Federal Reserve will increase interest rates, and whether its actions will slow down the increasing rate of inflation while also heading the economy into a recession.
Q1 2022 Performance for Core TSP Funds
What TSP fund is performing the best so far in 2022? Here is a summary of the core TSP funds’ performance in the first quarter of 2022:
- C Fund: -4.59%
- S Fund: -9.24%
- I Fund: -6.77%
- G Fund: 0.44%
- F Fund: -5.79%
C Fund is Best Performing TSP Fund Over 12 Months
The TSP’s C Fund bounced back in March with a return of 3.72% after losing 2.99% in February. The C Fund is still down 4.59% for the year-to-date but it is up 15.63% for the past 12 months.
The G Fund, sometimes thought to be the safest TSP fund, is up 1.56% over the past 12 months and up 0.44% for the year-to-date.
Among the core TSP funds, the fund with the worst performance over the past twelve months is the S Fund which is down 5.31%. The G Fund is up 1.56% over the past twelve months.
The S Fund also finished the month with a positive return of 0.90%. The Fund had a negative return of 5.31% over the past 12 months.
TSP Performance for March 2022, Past 12 Months, and Year-to-Date
Here are the TSP returns for all of the TSP Funds for March 2022 and for the past 12 months.
| | G Fund | F Fund | C Fund | S Fund | I Fund |
| Month | 0.17% | -2.73% | 3.72% | 0.90% | -0.33% |
| 12 Month | 1.56% | -3.95% | 15.63% | -5.31% | 0.37% |
| YTD | 0.44% | -5.79% | -4.59% | -9.24% | -6.77% |
| | L Income | L 2025 | L 2030 | L 2035 | L 2040 |
| Month | 0.49% | 0.85% | 1.14% | 1.21% | 1.29% |
| 12-Month | 2.77% | 4.29% | 4.93% | 5.16% | 5.41% |
| YTD | -1.30% | -2.54% | -3.65% | -4.08% | -4.49% |
| | L 2045 | L 2050 | L 2055 | L 2060 | L 2065 |
| Month | 1.34% | 1.42% | 1.88% | 1.88% | 1.87% |
| 12-Month | 5.55% | 5.77% | 6.95% | 6.94% | 6.94% |
| YTD | -4.86% | -5.19% | -5.93% | -5.93% | -5.94% |
What Has Happened to the F Fund in 2022?
The volatility of the stock market this year has spread into other types of investments as well. The yields on corporate and municipal bonds as well as Treasury bills have gone up. This means that the prices of existing bonds go down.
The F Fund is a TSP Fund that tracks the U.S. Aggregate Bond Index. This index consists of high-quality fixed-income securities with maturities of more than one year. The index is comprised of Treasury and Agency bonds, asset-backed securities, and corporate and non-corporate bonds. The F Fund does not have all of the assets that are in this index.
BlackRock selects a large representative sample of the various types of asset-backed, U.S. government, corporate, and foreign government securities included in the overall index for the F Fund investments.
The Bloomberg U.S. Aggregate bond index is down 6% so far in 2022, as of March 30th, and the index is headed toward the biggest quarterly loss since 1980. This means that the F Fund is also down. As readers can see from the chart above, the F Fund is down 5.79% so far in 2022 as of March 31st.
Latest TSP Funds Facts
The number of TSP investors receiving the full matching rate is still going up according to the TSP. For military personnel in the Blended Retirement System (BRS), active duty participants are now at about 78%.
The FERS participation rate has reached a new milestone of 95% and the Uniformed Services participation is up to over 81%.
The average TSP balance for FERS participants in the TSP is now $171,699 and their average Roth balance is $21,950. For those under CSRS, with a much smaller number of TSP investors, the average balance is now $186,419 and their average Roth balance is $30,531.
For more of the latest available data from the TSP, be sure to watch the short video at the top of the article.
