August brings respectable returns in TSP funds

August brought solid, even returns among the funds in the Thrift Savings Plan, after several months of weaker performance.

None of the TSP's five basic funds, which comprise the $180 billion 401(k)-style retirement savings plan for federal employees, lost ground last month. The International (I) Fund continues to be the plan's star, gaining 2.76 percent for a 12-month total return of 23.44 percent, far above any of the other funds.

The common stocks C Fund, which tracks the Standard & Poor's 500 Index of stocks in the largest domestic companies, grew 2.36 percent in August, after gaining less than 1 percent in June and July, and losing ground in May. The C Fund has now gained 8.89 percent over the past year.

After losing 2.79 percent in July, the stocks of small- and midsize American companies that make up the S Fund gained 2.15 percent in August, for an 8.72 percent 12-month return.

The F Fund, invested in fixed-income bonds, lags the other funds in its longer-term performance, posting only a 1.77 percent gain for the past 12 months, and a 1.58 percent gain in August.

The TSP's safest bet, the G Fund, which is made up short-term Treasury securities specially issued to provide a higher return than the rate of inflation without any serious risk from market fluctuations, gained 0.44 percent last month, for a 4.91 percent 12-month total.

TSP participants can also invest in five life-cycle funds, made up of a mix of the underlying basic funds. Life-cycle funds automatically shift participants' money from riskier to more conservative allocations as they age. In August, L Funds with riskier allocation gained more than their more conservative counterparts.

L 2040, intended for employees with a target retirement date around the year 2040, gained 2.22 percent. The L 2030 Fund earned 1.96 percent; the L 2020 gained 1.81 percent; the L 2010 increased 1.39 percent; and the L Income, designed for employees with planned retirements in the very near future, grew 0.90 percent.

Over the last 12 months, the L Funds with riskier allocations also earned more. L 2040 gained 11.47 percent, L 2030 grew 10.55 percent, L 2020 gained 9.95 percent, L 2010 earned 8.65 percent and L Income made 6.28 percent.