By Karen Rutzick
Four out of the five basic funds in the Thrift Savings Plan lost money in May, with only the fail-safe government securities (G) fund making gains.
The G Fund, which is invested in short-term U.S. Treasury securities specially issued to the TSP, gained 0.44 percent last month, bringing its 12-month total growth to 4.6 percent.
Administrators of the TSP, a $180 billion 401(k)-style retirement savings plan for federal employees, designed the G Fund to provide investors with a higher return than the rate of inflation without any serious risk from market fluctuations. Often, this means the G Fund is the lowest earner, but in down-cycle months such as May, its stability makes it a star.
Despite a poor-performing month, most of the TSP funds retained positive gains for the year. The F Fund, however, composed of fixed-income bonds, fell 0.09 percent in May and now has a 12-month loss of 0.38 percent.
The biggest loser last month was the S Fund, which invests in the stocks of small- and mid-sized American companies. That fund lost 4.36 percent in May, though its 12-month total earnings are still at 17.73 percent, making it the second highest-earning fund. A somewhat volatile pick, the S Fund was the highest earner just two months ago, when it brought in 3.84 percent growth for March.
International stocks, represented in the I Fund, also performed poorly in May, losing 3.87 percent. The fund, which invests in stocks in Europe, Australia and some countries in Asia, is still the highest 12-month earner with a 28.92 percent growth.
The C Fund, or common stocks fund, which tracks Standard & Poor's 500 Index of stocks in the largest domestic companies, lost 2.87 percent in May. The C Fund's 12-month earnings are at 8.68 percent.
Since last summer, the TSP also has offered life-cycle (L) funds, which are blends of the five basic funds that automatically grow more conservative as investors age. All L funds lost ground in May, with the riskier-mixed funds designed for younger investors losing the most.
L 2040, intended for employees with a target retirement date around the year 2040, lost 2.87 percent. The L 2030 Fund dropped 2.45 percent; the L 2020 lost 2.06 percent; the L 2010 decreased 1.31 percent; and the L Income, designed for employees with planned retirements in the very near future, was down 0.33 percent.