Over Jan - March, the C fund’s percentage of the total—including its shares in the L funds—has fallen from 44.5 to 41.6 percent, while the G fund’s share has risen from 30.6 percent to 34.1 percent. Image: FOTOGRIN/Shutterstock.com
By: FEDweek StaffTSP investors over the last two months have shifted more than $31 billion on a net basis out of the large U.S. company stock C fund and small company stock S funds as those funds have been dropping.
Investors moved a net $7.3 billion out of the C fund in February and more than $14.1 billion out in March, while the net outflow from the S fund in those two months was $2.9 billion and $7 billion. A net of some $2.3 billion was moved out of the lifecycle L funds collectively.
While the total shifted represents only about 3 percent of TSP account balances, the amounts moved are notably high for such monthly transactions and may indicate a “flight to safety” commonly seen during declining stock markets. A net $26.5 billion was moved into the ultra-secure government securities G fund while the bond F fund saw a net $1.9 billion shifted in.
Meanwhile the international stock I fund saw a net $6.2 billion shifted in over the two months. Through March, the I fund was the only one of the three stock-based funds in positive territory for the year, up 4.65 percent, while the C fund was down 4.28 percent and the S fund down 8.94 percent. The F and G funds were up 2.77 and 1.12 percent through March.
The data presented this week’s meeting of the TSP governing board cover only investor actions through the end of March, and do not reflect what investors have been doing in April, when the C and S funds have suffered more losses month-to-date.
The figures further showed that the total on investment has fallen from $963 billion to $937 billion over January-March. The C fund’s percentage of the total—including its shares in the L funds—has fallen from 44.5 to 41.6 percent, while the G fund’s share has risen from 30.6 percent to 34.1 percent.
The TSP had previously announced that the number of TSP account holders with at least $1 million on investment declined by about 11,000 to just under 147,000 in the first calendar quarter.
Also of note, the TSP beginning next January, plans to begin allowing in-plan Roth conversions. Once these conversions are allowed, any TSP participant may move money from traditional to Roth balances. Currently, if a TSP participant wants to move money from their traditional TSP balance to a Roth account, they’ll have to do it in a Roth IRA.
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