TSP winning streak continues for second month

Tuesday - 7/1/2014, 1:01pm EDT

The Thrift Savings Plan continued a summer winning streak through June, with all funds in federal employees' 401(k)-style retirement accounts finishing out the month in positive territory, according to new data from the Federal Retirement Thrift Investment Board.

It's the second month in a row all funds have finished in the black.

The largest gains came in the equity funds. The C Fund, tracked to the performance of the Standard & Poors 500, gained more than 2 percent, while the I Fund, tracked to the performance of an index of international stocks, inched up slightly less than 1 percent. The S Fund, which tracks the performance of smaller companies not included in the S&P 500, was the runaway top performer last month, inching up 4.45 percent.

That's the strongest showing for the S Fund since February.

Overall, the TSP has seen consistent gains over the past few months.

"Investors like what they're hearing coming out of the (Federal Reserve), and the economy is doing well," said Tracey Ray, the board's chief investment officer, last week at the board's monthly meeting.

The F Fund, tracked to a mix of corporate and government-backed bonds, remained in positive territory last month, but gains slowed. In June, the fund was up just 0.14 percent. But that could also be a sign of progress, Ray said. Thanks to the improving economy, interest rates are rising, which could be suppressing some of the gains there.

Thanks to the across-the-board gains in the regular funds, the L Funds — a mix of the regular funds that automatically balances risk as employees near retirement — also saw modest gains in June.

Late last year, the TSP board endorsed a proposal to automatically enroll new federal hires in an age- appropriate L Fund. Currently, new employees are slotted into the lower-risk, lower-reward government- securities G Fund. To become official, the switch requires approval from Congress. House and Senate committees have both OK'ed similar measures allowing the switch. But there's no word yet on when either full chamber would vote on the proposal.

"We are hoping that that continues to move forward," said Kim Weaver, the board's director of external affairs, said at last month's meeting.

Thrift Savings Plan June 2014 Returns
Fund June Year-to-Date Last 12 Months
G Fund 0.19% 1.17% 2.30%
F Fund 0.14% 4.37% 5.00%
C Fund 2.07% 7.18% 24.71%
S Fund 4.45% 6.21% 26.95%
I Fund 0.99% 5.06% 23.97%
L Income 0.54% 2.46% 6.74%
L 2020 1.19% 4.14% 13.99%
L 2030 1.52% 4.91% 17.30%
L 2040 1.77% 5.43% 19.70%
L 2050 1.96% 5.89% 22.03%

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