Investing August 4, 2006

TSP Lifecycle Fund Investors do Well for Year

August 4, 2006 (PLANSPONSOR.com) - Though returns for the federal Thrift Savings Plan (TSP) lifecycle funds waned in July, the first year-to-date return numbers show investors in the funds fared well.
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All of the lifecycle (L) funds beat out the G fund, which invests in government securities, and C fund, which invests in stocks in the S&P 500, for the year-to-date period, according to Govexec.com. In addition, the riskier L funds outperformed the more conservative L funds for the year.

The yearlong returns for each L fund, according to Govexec.com, were as follows:

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  • L 2040 – 9.12%,
  • L 2030 – 8.50%,
  • L 2020 – 8.15%,
  • L 2010 – 7.32%, and
  • L Income – 5.51%.

For the month of July, all L funds returned well below 1%, with the greatest gain by L Income of .49%. The lifecycle funds have been well received since being introduced to the TSP a year ago (See Lifecycle Funds Still On Fire at TSP ), though officials have been concerned investors are not using the funds as intended (See Many TSP Lifecycle Investors Misusing Funds ).

Among the TSP’s other funds, the I Fund, which invests in international stocks was the year’s top performer, gaining 24%. The I Fund posted a gain of only .98% in July, however.

Other funds’ July and year-to-date returns are as follows:

  • F Fund, composed of fixed-income bonds – 1.32% for the month, 1.42% for the year,
  • C Fund – .65% for the month, 5.42% for the year,
  • S Fund, which invests in stocks of small- and mid-sized US Companies – (2.79)% for the month, 5.35% for the year, and
  • G Fund – .44% for the month, 4.84% for the year.

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