Don’t forget about TSP’s S Fund

Tom Trabucco, director of external affairs, Federal Retirement Thrift Investment Board

wfedstaff | June 4, 2015 2:16 pm

By Jolie Lee
Web Editor
Federal News Radio

The Thrift Savings Plan’s S Fund — or small cap stock index investment fund — is one of the lesser known funds. Tom Trabucco, director of external affairs at the Federal Retirement Thrift Investment Board, told In Depth with Francis Rose the S Fund was a “second tier” fund that did not become available until 2001.

When the TSP was originally created, only the G Fund was offered. Later the F and C funds were added in the late 1980s. The C Fund invests a stock index that replicates the S&P 500, which covers 75 percent of the value of stocks in the U.S. equity markets, Trabucco said.

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“It does leave 25 percent on the table untouched, and those are the 25 percent where there’s a lot of activity. Those are small and medium-sized companies,” Trabucco said.

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The TSP Board requested from Congress the authority to add the option to invest in stock options not included in the S&P 500.

“We wanted to get the dynamism into the mix as well,” he said.

Currently, the S fund is the third largest fund in the TSP. As of the end of October, 45 percent of investments were in the G Fund, 23 percent in the C Fund and 8 percent in the S Fund.

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