Mixed Message on Stock Funds

While investment losses in the stock funds are contributing to the shrinking share of those funds in overall investment allocations, investors also are shifting money from those funds toward the absolute safety of the G fund and toward the less volatile F fund. Through June of this year, on a net basis TSP investors had transferred nearly $1.6 billion out of the C fund, with more than $1 billion of that going into the G fund. However, some of the transfers out of the C fund apparently were designed to diversify investor stock holdings rather than get out of stocks: $417 million was transferred into the S fund and $123 million into the I fund, again on a net basis. Also, investors continue to put most of their new investments in the C fund. Through June investors had put about $3.2 billion of new money into the C fund versus $2.1 billion in the G fund, $502 million in the F fund, $142 million in the S fund and $58 million in the I fund.