TSP Returns Fall in April—Most Yearly Returns Still Positive

In the first quarter of 2024, TSP returns had the best first quarter performance since 2019. With one exception, all TSP funds declined in April.

G Fund Higher, Other TSP Funds Decline

Earlier this year, the Thrift Savings Plan (TSP) stock funds were on a roll. The C Fund was up 3.22% in March and 10.55% for the year. At that time, all of the TSP Funds had a positive return for the year-to-date, with the exception of the F Fund, which was down 0.74%.

April was not kind to investors in the stock market.

The S&P 500 index fell 4.2% in April, its lowest performance since September, just after providing its best first-quarter performance since 2019. The Thrift Savings Plan (TSP) C Fund is based on this index, and the C Fund closely tracks it. As a result, the C Fund also declined in April, and it was down 4.08%. The C Fund is still up 6.03% for the year.

All of the TSP Funds declined in April with the exception of the G Fund which advanced slightly and is up 1.41% for the year

The S and I Funds also declined in April. The S Fund is frequently more volatile (often going up or down faster than other funds) as it invests in smaller companies. It was down 6.46% (up 0.01% for the year). The I Fund declined 3.17% but is still up 2.60% for the year.

So far in 2024, all of the TSP Funds have had positive returns, with the exception of the F Fund, which has declined 3.20%.

Here is a compilation of all TSP Fund returns for April and so far in 2024.

TSP Returns for April 2024 and Year-to-Date

G Fund0.35%1.41%
F Fund-2.47%-3.20%
C Fund-4.08%6.03%
S Fund-6.46%0.01%
I Fund-3.17%2.60%
L Income-0.95%1.85%
L 2025-1.27%2.12%
L 2030-2.48%2.76%
L 2035-2.76%2.87%
L 2040-3.03%2.99%
L 2045-3.27%3.09%
L 2050-3.49%3.22%
L 2055-4.06%3.98%
L 2060-4.06%3.98%
L 2065-4.06%3.97%
Source: TSPDataCenter.com

Inflation and Interest Rates Hampering the Market

The Federal Reserve’s attempt to reduce inflation has run into problems. The Department of Labor’s employment-cost index is up 1.2% in the first quarter from the previous three months and up 4.2% from a year earlier.

Inflation has also been trending higher. According to the Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers (CPI-U) increased by 0.4% in March, the same as in February. Over the last 12 months, the all-items index increased by 3.5%. This figure was 3.2% in February. 

The latest inflation rate is for the third straight month with a jump in inflation.

With inflation higher for several months in a row, and wage pressure increasing, attempts to slow the economy enough to reduce inflation have not worked.

At the start of the year, investors expected lower interest rates but inflation data has lowered expectations on the timing of the rate cuts. It now appears that rate cuts may not come until September or perhaps not anytime this year. 

According to BlackRock’s chief investment officer of global fixed income and head of the global allocation investment team: “The big thing that continues to be frustrating for the Fed, and for everybody in the market, is that core services inflation is just too high.” BlackRock is a company that provides investment services for the TSP.

TSP Facts

At the end of March, the TSP’s total assets were $895 billion—up from $845 billion at the end of December 2023.

According to the latest data, the TSP has provided FERS employees with more money so far in 2024 (which does not include the stock market drop in April). At the end of March, the average TSP balance for those in FERS was $184,691. At the end of December 2023, the average was $175,692.

For comparison, the average balance at the end of March for CSRS employees was $207,698, up from $197,254 at the end of December 2024.

The average balance for all TSP investors was $127,376 at the end of March. At the end of December, the average balance was $120,825 according to TSP data.

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