Slow start for TSP funds in 2022; Fund C performs better in March

Poor performance of core TSP equity funds in the first quarter

2022 has not been a good year so far for the TSP. Despite a better performance in March, overall returns are down so far in 2022 based on the latest monthly TSP returns.

The first quarter of the stock market ended on March 31. This is the worst performing quarter for equities over the past two years.

The reasons are easy to understand. Inflation is at its highest level in 40 years, Russia invaded Ukraine and this war is now spilling over into Russian territory as well, and we know the Federal Reserve is going to raise interest rates. What we don’t know is how much interest rates will rise, how quickly the Federal Reserve will raise interest rates, and whether its actions will slow the rising rate of inflation while dragging the economy into a recession.

Q1 2022 performance for Core TSP funds

Which TSP fund is the best performer so far in 2022? Here is a summary of the performance of the main TSP funds in the first quarter of 2022:

  • Fund C: -4.59%
  • Fund S: -9.24%
  • I base: -6.77%
  • Fund G: 0.44%
  • Fund F: -5.79%

Fund C is the best performing TSP fund over 12 months

TSP Fund C rebounded in March with a return of 3.72% after losing 2.99% in February. Fund C is still down 4.59% year-to-date, but is up 15.63% over the past 12 months.

Fund G, sometimes considered the safest TSP fund, is up 1.56% over the past 12 months and 0.44% since the start of the year.

Among the core TSP funds, the fund with the worst performance over the last twelve months is the S fund, which is down 5.31%. The G Fund is up 1.56% over the last twelve months.

Fund S also ended the month with a positive return of 0.90%. The Fund has posted a negative return of 5.31% over the past 12 months.

TSP performance for March 2022, last 12 months and year to date

Here are the TSP returns for all TSP funds for January 2022 and for the last 12 months.

Fund G Fund F Fund C Fund S I finance
Month 0.17% -2.73% 3.72% 0.90% -0.33%
12 months 1.56% -3.95% 15.63% -5.31% 0.37%
YTD 0.44% -5.79% -4.59% -9.24% -6.77%
All TSP returns are available at TSPDataCenter.com.
L Income L 2025 L 2030 L2035 L 2040
Month 0.49% 0.85% 1.14% 1.21% 1.29%
12 months 2.77% 4.29% 4.93% 5.16% 5.41%
YTD -1.30% -2.54% -3.65% -4.08% -4.49%
L 2045 L 2050 L2055 L2060 L2065
Month 1.34% 1.42% 1.88% 1.88% 1.87%
12 months 5.55% 5.77% 6.95% 6.94% 6.94%
YTD -4.86% -5.19% -5.93% -5.93% -5.94%

What happened to Fund F in 2022?

The volatility in the stock market this year has also spread to other types of investments. Yields on corporate and municipal bonds as well as treasury bills rose. This means that the prices of existing bonds go down.

Fund F is a TSP fund that tracks the US Aggregate Bond Index. This index is comprised of high quality fixed income securities with maturities greater than one year. The index is composed of treasury and agency bonds, asset-backed securities, and corporate and non-corporate bonds. Fund F does not own all the assets that are in this index.

BlackRock selects a broad representative sample of the different types of asset-backed, US government, corporate and foreign government securities included in the overall index for the F Fund’s investments.

The Bloomberg US Aggregate Bond Index is down 6% so far in 2022, as of March 30, and the index is heading for the biggest quarterly loss since 1980. That means Fund F is also down. As readers can see from the chart above, Fund F is down 5.79% so far in 2022 as of March 31.

Latest news on TSP funds

The number of TSP investors receiving the full match rate continues to increase according to the TSP. For military personnel in the Blended Retirement System (BRS), active duty participants are now at around 78%.

FERS participation rate has reached a new high of 95% and uniformed service participation is over 81%.

The average TSP balance of FERS TSP participants is now $171,699 and their average Roth balance is $21,950. For those under CSRS, with a much smaller number of TSP investors, the average balance is now $186,419 and their average Roth balance is $30,531.

To learn more about the latest data available from the TSP, be sure to watch the short video at the top of the article.

© 2022 Ralph R. Smith. All rights reserved. This article may not be reproduced without the express written consent of Ralph R. Smith.

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