TSP Fund Performance
The TSP funds' returns deviated from one another in the first week of June. Any one constituent of the market produced different results from the others.
The C-fund’s price range was held tight for most of the week apart from Wednesday (+1.19%) where it produced most of its gains for the week (+1.35%).
The S-fund had a much more volatile week that accumulated to a 1.44% loss. It outperformed the C-fund on Wednesday (+1.45%), but the TSP fund dropped 0.4% or more the other four days of the week. Its greatest price drop of the week was Tuesday when it fell 1.06%, the same day the C-fund managed a small gain of 0.15%.
Read ‘C Fund vs. S Fund: Which TSP Investment is Right for You’ to learn more about why these two U.S. index funds can perform differently from one another.
The I-fund kept a tighter price range than the S-fund. It fluctuated over the five days and landed back where it started the week producing a weekly gain of 0.01%.
Outside of stocks, bond prices fluctuated from one half of the week to the next. The F-fund produced steady gains over the first three days and then handed most of them back on the final day of the week. The F-fund accumulated a gain of 0.45% for the week, but after it held a weekly gain of 1.26% coming into Friday.
Market Outlook
The S-fund’s performance paints a picture of a broader market facing headwinds and it may be handing back previously priced-in rate cuts that have not been fulfilled. That may be the case for companies in the S&P 500 (C-fund) as well, but the index is buoyed by the performance of its heavy-weight companies involved in the AI boom. Nvidia and Microsoft were up 6.25% and 2.06% for the week respectively.
A highly anticipated Jobs Report did little to clarify a path for stocks on Friday. At first glance, the market saw a strong report that could prevent the Fed from cutting rates in their September meeting. The U.S. added 272,000 jobs in May, a jump from April and higher than economists anticipated. Meanwhile, the unemployment rate climbed to 4.0%, a figure not seen in more than two years. These conflicting figures may have kept the market from tumbling deeper from its opening price cut, but the overall picture painted is that of a labor market heating up from a month prior.
A consequence was an increase in bets that the Fed will hold rates steady in its September meeting. That included a spike in bond yields which is why we saw the F-fund drop 0.81% on Friday. Bond yields and bond prices move inversely. Also included was a jump in the dollar index which puts pressure on markets outside the U.S. and led to the I-fund falling 0.97% on Friday.
IFTs of the week
Forty non-premium AutoTracker members made IFTs this week. Non-of them gave them the best return for the week. That was given to the 88 non-premium members who currently hold 100% C-fund. Those 88 members are starting June with a 1.35% return. The C-fund had two days of slight losses on Thursday (-0.02%) and Friday (-0.09%), but no member holding 100% C-fund on Wednesday or Thursday moved to the G-fund.
There is one IFT this week I want to highlight, and though it led to a return below the C-fund's, it came close without exposure to stocks.
It goes back to last Friday (5/31) when Mucho_Dinero, one of May’s top five performers, used their last May IFT to move out of the G-fund into 100% F-fund. Bonds were up already that morning, but with that move, Mucho_Dinero left the comment “It looks like bonds will go up a few days”.
Well bonds, or the F-fund, did go up over the next few days. Mucho_Dineo then used their first IFT of June on Wednesday to move back to 100% G-fund pulling a 1.26% return out of the F-fund in those three days and protecting their TSP from the eventual pull-back in bonds and stock on Friday.
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Thomas Crowley
(TommyIV)
www.tsptalk.com
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The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
