Latest News from The TSP
The participation rate for TSP investors in FERS is 96.2%. The percentage with a full matching rate is 89.1%. These are both new record high figures.
And, good news for TSP investors who need information from the TSP: The average wait time for participants who called the ThriftLine in February was 11 seconds. 95.3% of callers waited 20 seconds or less. The satisfaction rate for the ThriftLine was 93.7% in the latest reported data.
This article takes a closer look at specific TSP data and analyzes its implications for TSP investors.
TSP Investors and the I Fund
The latest TSP data, which reflects the Thrift Savings Plan through February 2026, was just released. The latest information on the I Fund in this article, as well as the amount of interfund transfers, is largely based on the same source.
The TSP had $1.094 trillion in total assets at the end of February 2026. $78.7 billion was invested by participants in the I Fund (7.2%), and $148.4 billion was in the I Fund in individual TSP Funds (13.6%).
In the same month, TSP investors added $9.618 billion to the I Fund, much of which was transferred from the C Fund ($7.02 billion) and the S Fund (about $2.6 billion) in February.
Why is This Significant?
This is more than just a routine rebalancing. It reflects a meaningful shift in investor sentiment toward increased diversification. The diversification is a clear move away from U.S. stocks into international stocks.
Money flowing from the C and S Funds into the I Fund means TSP participants are continuing to dial back their exposure to U.S. equities.
This usually happens when investors believe:
- U.S. markets are fully valued or overvalued, or
- International markets offer better near-term upside
This is a shift in investor sentiment; it is more than routine diversification.
This is Not a One-Month Spike: It is a Sustained Trend
In 2025, the I Fund delivered a return of 32.45%. The C Fund returned 17.85%, and the S Fund 11.38%.
While the C and F Fund returns were excellent, those who missed out on I Fund returns may now be hoping 2026 will be a repeat and swell their future retirement fund accounts with another year of generous results from the I Fund.
The December 2025 money flows line up with 2025 returns:
- I Fund: +32.45%
- C Fund: +17.85%
- S Fund: +11.38%
TSP investors reacted quickly to the I Fund’s superior performance. They noticed the gap in performance, and they have reacted quickly, as demonstrated by the growth in the I Fund investments now extending and continuing to grow so far in 2026.
The transfers into the I Fund have been consistent. In part, it is a case of rearview-mirror investing. Here is a concise picture:
- January 2025: $30.9 billion (3.2%) in the I Fund from individual participants
- Early 2026: roughly double that share (~6%+)
- February 2026: $78.7 billion in individual allocations (~7.2%)
That’s a large reallocation of assets by TSP participants in a little more than one year.
The “Global Rotation” Argument is Now Credible—Not Speculation
An analysis of the TSP in February noted a possible global rotation in stocks. In other words, the investing actions by TSP participants have been shifting away from US stocks and into global stocks. The latest TSP data (provided by the Federal Retirement Thrift Investment Board) again confirms the trend of a rotation into international equities.
This means:
- Investors are shifting toward international markets
- Factors driving this trend include:
- A weaker dollar
- Cheaper valuations abroad
- A relative slowdown in the U.S. large-cap stocks
These actions reflect a broader market rotation into international stocks. It is not just TSP investors reaching a similar conclusion on where to invest their money.
The Risk Argument Becomes Sharper
The increasing trend in international funds in the TSP is probably more significant because it accelerated immediately after a year of a 32% return in the I Fund. This means:
- The latest investors are not early—they are reacting after outsized gains have been realized
- The speed of inflows suggests crowding risk into this segment of the stock market.
While no one knows or can accurately predict the future of the stock market, unexpected actions may occur that will impact your investments.
Look at what has happened in the Middle East in the last few weeks with the start of the Iran war. The stock market has become more volatile, and investors are much more skittish.
Here is food for thought: “The faster the money moves in, the greater the risk the move is already mature.” This is a paraphrasing of a Warren Buffet philosophy: “Be fearful when others are greedy, and be greedy when others are fearful.”
TSP investors did not just discover the I Fund—they are now piling into it after a banner year, and the shift is becoming increasingly evident in the TSP’s data.
We wish all readers the best as they make their TSP investments and look forward to reporting an increasing number of TSP millionaires throughout 2026!
