TSP Charts: Avoid the F fund

By Michael Bond on February 22, 2018

Unless you are making short term trades, there is no reason to be in the TSP F fund these days. The Fed is driving interest rates higher and this means capital losses to the F fund that will offset any yield.

The TSP G fund’s interest rates has always been pretty close to the TSP F fund’s yield. Only because interest rates have been in a down trend since the inception of the F fund has the F fund out-performed the G fund which incurs neither gains nor losses from interest rate movements.

The TSP G fund is earning about 2.4% interest presently similar to the TSP F fund yield. But the TSP F fund will incur a 5% capital loss for each 1% gain in interest rates. So a half a percent rise in rates wipes out the TSP F fund yield. It will have its ups and downs, but until the Fed reverses course, avoid the TSP F fund.