TOPICS
TOPICS
June a slow month for TSP investments
None of the five basic funds in the Thrift Savings Plan fared well in June, with three posting losses and the others making minimal gains.
The reliable government securities (G) fund performed the best, but increased just 0.42 percent. Its gains over the previous year remained lower than those for any of the others, with an increase of 4.90 percent.
The stocks from Europe, Australia and some countries in Asia that make up the international (I) fund also had small gains, with a 0.20 percent return. This offering is at the opposite end of the spectrum from the G Fund for longer-term growth, however, outperforming all the other options with 12-month returns of 27.18 percent.
The F Fund, made up of fixed-income bonds, had the smallest losses of the remaining three, losing 0.27 percent for June. Its yearlong earnings remained positive, at 6.23 percent.
The S Fund, which invests in the stocks of small- and mid-sized American companies, lost 1.53 percent, after posting the biggest gains for May. The fund still grew 19.47 percent for the last 12 months.
Finally, the C Fund, which tracks Standard & Poor's 500 Index of stocks in large and medium-sized domestic companies, lost 1.70 percent. But the fund's 12-month gains were the second-highest, at 20.63 percent.
The life cycle or L fund options lost ground for June as well, with one exception. The L Income fund, designed for employees anticipating retirement in the very near future, gained 0.08 percent for the month, and 8.37 percent in the last 12 months. That fund is invested in a conservative mix of stocks, as the life cycle offerings automatically shift money to less risky allocations the closer participants get to retirement.
The other life cycle options had progressively higher losses last month the farther away the target retirement date was. The L 2040 fund lost 0.92 percent; the L 2030, 0.80 percent; the L 2020, 0.54 percent; and the L 2010, 0.20 percent.
The reverse was true of 12-month gains, with long-term returns increasing the farther away the planned retirement. The L 2040 grew 19.49 percent over the year; the L 2030, 17.60 percent; the L 2020, 15.90 percent; and the L 2010, 12.15 percent.
COMMENTS
- Amen to Rachel. At least a means or avenue of input, question, and response would be appreciated. At least I don't feel like the "Lone Stranger" any more. Tip off Posted July 16, 2007 4:26 PM
- Delores, I want to know as well. In fact, I would like to be allowed to attend the TSP Board meetings and to become more involved in the process of investing my hard earn dollars. It is as if federal employees are given the opportunity to invest their monies and that is the extent of our involvement. If there is a particpatory group who meets with the TSP Board, I would certainly like to know about it. Rachel Posted July 5, 2007 11:57 AM
- Characterizing the 0.42 percent increase in the G Fund as not faring well is unfair. The G Fund, as the article notes, is a government securities fund. As such, investors can only anticipate returns consistent with long-term interest rates. The 0.42 percent increase for the month is equivalent to a 5.16% annual return. According to the TSP website, annual returns since 1997 have ranged from 6.77% to 4.11% with a 10-year compound rate of 5.31%. The June returns are fully consistent with the fund's past performance and with the expectations one should have from an essentially risk-free investment. Mark Wheeler Posted July 5, 2007 9:03 AM
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