While the markets got off to a rocky start in September with the Dow dropping 626 points (1.5%) and the S&P 500 down 119.47 (2.12%) today, August ended up as another solid month for funds in the federal government’s 401(k)-like Thrift Savings Plan.
While the international “I” Fund was the top performer in August among the TSP’s five core funds with a gain of 3.15% (up 12.3% YTD), the common stocks of the “C” Fund continued to be the top fund so far this year, posting a gain of 2.42% in August to reach a 19.5% gain so far in 2024.
FedSmith’s Ralph R. Smith reported that the S&P 500, on which the C Fund is based, is up 18% through August—or 1.5% less than what the C Fund has done through the first eight months of the year. This despite the stock market getting off to a historically ugly start, with the S&P 500 dropping 6.4% in the first three trading days of August, its worst start to any month since 2002. After an impressive rally through the rest of the month, the S&P 500 finished Friday just 0.3% away from its July 16 record high finish.
The I Fund is next among the TSP’s five core funds with its 12.3% gain through August, while the S Fund, based on small and mid-market stocks, saw a 0.25% gain last month and is up 9.99% YTD.
The fixed income F Fund gained 1.43% in August and is up 3.14% YTD. Finally, the government securities of the G Fund grew by their statutorily mandated rate of 0.35% in August, leading the conservative fund to a total increase of 2.97% so far in 2024.
In 2023, the C Fund performed the best with a final return of 26.25%, compared to the S Fund at 25.30% and the I Fund at 18.38%.
Lifecycle Funds
Each of the TSP’s target-date fund like “lifecycle” funds also posted gains in August. The L Income Fund, which is designed for people who have already begun making withdrawals, increased 0.98% (6.25% YTD); L 2025, 1.10% (7.16% YTD); L 2030, 1.69% (10.64% YTD); L 2035, 1.82% (11.38% YTD); L 2040, 1.93% (12.12% YTD); L 2045, 2.04% (12.75% YTD); L 2050, 2.13% (13.38% YTD); L 2055, 2.38% (15.58% YTD); L 2060, 2.38% (15.59% YTD); L 2065 (15.59% YTD), 2.38; and L 2070, 2.39% (YTD not available as fund was introduced mid-year).
More TSP data
The FedSmith report noted that according to the latest report from the Federal Retirement Thrift Investment Board (FRTIB), the TSP had $927 billion in assets at the end of July. More than $1.4 billion was transferred into the C Fund in July, $703 million was transferred out of the S Fund, and $423 million was transferred out of the G Fund. While significant amounts of money, FedSmith said it indicates most TSP investors “are not chasing the latest returns but leaving their money their selected Funds without reacting to the latest headlines about the direction of the stock market.”
The Thrift Savings Plan had 6,989,602 account holders at the end of 2023, including active and retired federal employees and military personnel, as well as inherited accounts.
SEE ALSO:
• April Losses Water Down Thrift Savings Plan Gains in 2024
• TSP Realized Significant Gains in 2023