A banner October for the stock market—including the best month for the Dow Jones Industrial Average since 1976—helped government retirement savers recoup some of this year’s losses.
On the heels of a dismal September that saw all Thrift Savings Plan funds but the notoriously conservative government securities investment G Fund lose ground, October’s strong stock market performance was much needed, with the S&P 500 notching an 8% gain for the month, the NASDAQ up 3.9% and the Dow up 14%.
That helped all three of the stock-based funds in the federal government’s 401k-like Thrift Savings Plan (TSP) post strong gains in October, which is welcome news after a late October report from the TSP board found the average account balance for TSP investors was down about $30,000 year-to-date through September.
The TSP’s small company stock S fund led the October rally, up 8.59%. That was followed by an 8.1% gain in the large company stock C fund and a 5.98% gain in the international stock I fund. Despite the October gains, those funds still are down year-to-date by 23.83%, 17.7% and 22.9%, respectively.
The TSP’s bond-based fixed income F fund declined by 1.26% in October, meaning a year-to-date loss of 15.38%. That conservative G Fund rose 0.34% for the month, bringing its gain for the year to a modest 2.29%—the only TSP fund in the black so far in 2022.
The TSP’s target-date fund-like lifecycle funds all gained in October, led by a 7.36% increase for the 2055, 2060 and 2065 funds.
Board report had scary numbers
According to data presented at the latest monthly meeting of the TSP board as reported by FEDweek, the Thrift Savings Plan’s total account balance fell below $700 billion in September for the first time since December 2020, to just under $690 billion. That’s down from just under $812 billion as of year-end 2021. Year to date the number of account holders has grown from just above 6.5 million to 6.7 million.
Due to a combination of investment losses in the common stock C fund and a shift by some investors to the security of G fund, FEDweek reports those two funds have essentially traded places in investors’ portfolios. Including their shares in the lifecycle L funds, the C fund accounted for 40.3% of investments and the G fund 33.3% at year-end 2021, compared with 35.2% and 42% now.
SEE ALSO:
• TSP Funds Suffer Through Another Rough Month
• TSP Millionaire Ranks Thinned by More Than One-Third
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
