Investments available in the TSP are:
G Fund (Government Securities Investment Fund) - comprised of U.S. Treasury (government) securities where the earnings are based upon the interest rate paid on the government bonds in which the fund invest.
F Fund (Fixed Income Index Investment Fund) - comprised of U.S. government, mortgage-backed, and corporate bonds and seeks to track the performance of the Barclay's Capital U.S. Aggregate Bond Index.
C Fund (Common Stock Index Investment Fund) - comprised of the common stocks of the 500 largest U.S. companies and managed to track the performance of the S&P 500 Index.
S Fund (Small Cap Stock Index Index Fund) - comprised of common stocks of more than 3,100 U.S.-based corporations with the exclusion of the 500 largest companies represented in the S&P 500.
I Fund (International Stock Index Investment Fund) - comprised of the stocks of companies that make up the Morgan Stanley Capital International EAFE Index. Companies generally are headquartered in Europe, Australia, Asia, or the Far East).
L Fund (Lifecycle Funds) - invests in various mixes or combinations of the G, F, C, S, and I Funds available in the TSP. Designed to take into consideration the participant's projected retirement date, assuming that the more years a person has until retirement, there is a greater need for growth of assets, and therefore would have a greater amount invested in the C Fund, S Fund, or I Fund, versus a participant who has fewer years left and typically more conservative, less concerned about growth, and more interested in preservation of capital and interest paid on bonds in the G Fund and F Fund.
According to financial statements of the Thrift Savings Fund, as of December 31, 2012, the five component funds of the Thrift Saving Plan had total assets of $325,480,464. With $158,520,886 in asset, the G Fund holds nearly 50% of all assets of the TSP. The C Fund holds 26% or $84,397,548 of the plan assets, while the F Fund, S, Fund, and I Fund each holds less than 10% of total plan assets.
In the 10-year period from January 1, 2003, through December 31, 2012, the annual rate of return of the G Fund declined by 64% (Exhibit 1) . Participants who have a majority of their holding in the G Fund should consider the effects of inflation on the yearly returns of the G Fund in the TSP. With yearly returns over the past ten years below 1.2% (Exhibit 2), participants should consult with a financial advisor to develop a well diversified mix of investments that has the potential to better keep pace with inflation.