Summary of the TSP Funds



For those of you unfamiliar with the specifics of the various Thrift Savings Plan funds, here is a brief overview. In the right column, we have current prices for all of the funds.

L Funds: In our opinion, these "lifecycle" funds create a false sense of security because they are not adjusted based on market conditions. L Funds were designed, according to the date listed in the title (2030, 2040, etc.), for someone who plans to retire in that decade. The funds have more risk reward the further away from retirement and get more conservative as the date approaches. These funds are basically managed through the buy and hold approach.

C Fund: This fund is made up of stocks of large and medium sized U.S. companies. It was created to match the performance of the S&P 500 index. This fund also includes dividends but is subject to moderate market forces.

S Fund: This fund is made up of stocks of small to medium sized U.S. companies (not included in the C Fund). It was created to match the performance of the Dow Jones U.S. Completion TSM index. This fund also includes dividends but is subject to moderate to high market forces. Historically, this fund is more volatile than the C Fund.

I Fund: This is an "International" fund based on the MSCI EAFE. Because the underlying holdings of the I Fund are international stocks, there is a currency factor that must be considered. As the value of the US dollar goes up or down, so do the currencies which are used to value the various international stocks in the I fund. Our assessment of the I Fund is that, when combined with what MASS tells us about the I fund trend with another model that accurately shows the trend of the US dollar, can produce dramatic results. These results are obtained when the value of I Fund is trending up AND the value of the US dollar is dropping.

F Fund: This fund is a bond fund. We do not recommend bond funds at this time because 1) interest rates are at historic lows and 2) the next major move in rates must be up which means the value of the F Fund goes down. It is possible in the future we will recommend a partial allocation to the F funds if interest rates present an attractive risk/reward situation.

G Fund: The G Fund consists of U.S. backed government securities specifically issued to the Thrift Savings Plan. The volatility is low but the returns may not match inflation. Our system views the G Fund as a safe haven when the major indices (hence the C, S and I funds) are trending down. Based on the data we analyze from MASS and other indicators, we may recommend a movement of some or all of your portfolio to the G fund.