Top TSP Performance in January Was the I Fund
The premier performance for any Thrift Savings Plan (TSP) in 2025 was the I Fund with a return of 32.45%. The fund with the second-highest return was the C Fund, at 17.85%.
These are very high returns for a one-year period. For comparison, here is how the core TSP stock funds performed over the most recent ten-year period.
The core stock funds in the TSP are the C Fund (which tracks the S&P 500, large-cap U.S. stocks), S Fund (tracks small to mid-cap U.S. stocks via the Dow Jones U.S. Completion Total Stock Market Index), and the I Fund (tracks international stocks ex-U.S., currently the MSCI ACWI IMI ex USA ex China ex Hong Kong Index).
The TSP’s official website provides performance data as of December 31, 2025, including the 10-year annualized returns for these funds. These represent the average annual compound returns over the trailing 10 years (ending 2025, so covering approximately 2016–2025, but aligned with standard financial reporting for “past 10 years” through the most recent year-end).
- C Fund: 14.79% annualized over 10 years
- S Fund: 11.04% annualized over 10 years
- I Fund: 8.70% annualized over 10 years
These figures are from TSP’s individual fund pages and the rates of return section (as of the end of 2025), net of the TSP’s low fees. They closely track their benchmarks (e.g., C Fund vs. S&P 500 at 14.82%).
The period includes strong U.S. stock markets (especially large caps in the C Fund), mixed small-cap results, and variable international performance, with a strong 2025 boost for the I Fund (+32.45%). Bond funds (G and F) had much lower returns (e.g., F Fund ~2.11% over 10 years).
TSP Performance January 2026, Year-to-Date and 12-Month Returns
| Fund | Month | Year-to-Date | 12-Month Return |
|---|---|---|---|
| G Fund | 0.37% | 0.37% | 4.42% |
| F Fund | 0.20% | 0.20% | 6.88% |
| C Fund | 1.45% | 1.45% | 16.32% |
| S Fund | 2.41% | 2.41% | 8.64% |
| I Fund | 5.94% | 5.94% | 35.33% |
| L Income | 1.12% | 1.12% | 9.27% |
| L 2030 | 1.94% | 1.94% | 14.87% |
| L 2035 | 2.19% | 2.19% | 16.05% |
| L 2040 | 2.34% | 2.34% | 17.07% |
| L 2045 | 2.48% | 2.48% | 17.94% |
| L 2050 | 2.62% | 2.62% | 18.80% |
| L 2055 | 3.11% | 3.11% | 21.58% |
| L 2060 | 3.11% | 3.11% | 21.58% |
| L 2065 | 3.11% | 3.11% | 21.58% |
| L 2070 | 3.11% | 3.11% | 21.60% |
| L 2075 | 3.11% | 3.11% | 14.37% |
What Should TSP Investors Do Now?
Some TSP investors may be looking at their investments and wonder, “Why did I not put more money into the I Fund? I missed making more money last year. Should I put more money into the I Fund now?”
That appears to be what some TSP participants are doing—possibly because their I Fund allocation in this Fund is low compared to other TSP Funds.
The reality is that there is no one investment portfolio for everyone. If you are a retired federal employee, your investment timeline is different from that of an employee just starting their career or in the middle of their career. After looking at the data for the last 10 years, here are some general observations about investing.
Although the average across the three stock funds was 11.51%, a 100% allocation to the C Fund would have outperformed a balanced mix. But volatility is important—especially for retirees.
For example, in 2022, the C Fund declined by more than 18%, the S Fund by more than 26%, and the I Fund by almost 14%. In my experience, most people are more subject to panic when these dramatic drops occur.
Throughout our history, dramatic drops in stock values have occurred. If you are 25 or 45, you may be willing and able to look away and wait for a recovery. A 75-year-old retiree is likely to be more interested in the current value and stability of the portfolio to meeting immediate expenses.
Perhaps “this time will be different” from historical experience, but that hopeful expectation usually proves to be unlikely.
Additionally, the I Fund improved its performance through uncorrelated moves (e.g., stronger relative performance in non-U.S. recoveries). Over the long term, blending funds reduces portfolio swings—for example, a 60/20/20 split (between C/S/I and I Funds) would have returned approximately 12.5% annually with lower volatility.
For future income, this may help guide investment decisions for investors that prioritize stability over maximal growth potential, especially if you’re nearing retirement and may not be able to afford significant losses that delay withdrawals.
The advantage of the TSP is that each person can allocate their TSP investments according to their own preferences and their own conclusions about future stock market performance. Use these historical data for your own purposes and based upon your judgments on your future and income requirements.
We wish all readers a successful future in their TSP investments!
