TSP funds nosedive in September

By Alyssa Rosenberg arosenberg@govexec.com

October 2, 2008

Every Thrift Savings Plan fund except the government securities fund posted losses in September as the crisis on Wall Street roiled the financial markets.

The G Fund, considered the plan's most stable investment offering, rose 0.31 percent in September. So far in 2008 the fund's value has risen 2.86 percent, and it is up 4.05 percent during the past year, the highest gains in 2008 and for any fund during the past 12 months.

The international (I) fund, which invests in European, Asian and Australian companies, suffered the steepest September losses, falling 12.31 percent. That decline brings the fund's year-to-date losses to 27.81 percent, and its losses during the last 12 months to 29.01 percent.

The S Fund, which invests in small- and mid-size U.S. companies and tracks the Dow Jones Wilshire 4500 Index, also suffered double-digit losses, sliding 10.32 percent. In 2008, the fund has fallen 16.08 percent, and since last September it is down 18.90 percent.

The C Fund, which tracks Standard & Poor's 500 Index, experienced smaller losses in September, though it dropped more on a year-to-year basis than the S Fund. The C Fund slipped 8.94 percent in September, and is down 19.25 percent in 2008 and 21.94 percent since September 2007, the largest long-term losses of any other offering except the I Fund.

The F Fund, made up of fixed-income bonds, lost 1.31 percent in September, but since January 2008, the fund's value has risen 0.84 percent, and it is up 3.89 percent since September 2007.

All the life-cycle funds, which include riskier but more aggressive investments for younger workers and shift to more conservative allocations as employees approach retirement, posted losses in September. The L 2040 Fund fell 8.35 percent; the L 2030 Fund lost 7.24 percent; the L 2020 Fund is down 6.01 percent; the L 2010 Fund dropped 3 percent; and the L Income Fund, designed for investors closest to retirement, fell 1.75 percent.

So far this year and for the past 12 months, all the life-cycle funds have declined in value. The L 2040 Fund is down 17.04 percent in 2008 and 18.61 during the past year; the L 2030 Fund is down 14.67 percent in 2008 and 15.97 percent during the past 12 months. The L 2020 Fund has declined 12.07 percent since the beginning of the year and 13.01 percent since September 2008. The L 2010 Fund is down 5.45 percent this year and 5.51 percent from the same time a year ago, while the L Income Fund is down 2.06 percent in 2008 and 1.62 percent during the past 12 months.