Two Factors in C Fund’s Drop

Two main factors contributed to the C fund’s decline. First, it has suffered from poor investment returns, falling 9.1 percent in 2000, 11.9 percent in 2001 and 19.9 percent this year through July, while the G fund has posted steady increases-up 6.4 percent in 2000, 5.4 percent in 2001 and 3.1 percent through July of this year. Meanwhile, investors reversed a long-standing pattern of shifting money from the G fund into the C fund and began moving it the other way. Through July of this year alone, $2.896 billion has moved out of the C fund and $1.928 billion has moved into the G fund through interfund transfers.