The C Fund is required by law to be invested in a portfolio that aims to replicate the performance of a U.S. stock market index. The Standard & Poor’s 500 Stock Index, which tracks the performance of major U.S. companies and industries, has been selected as the benchmark by the Federal Retirement Thrift Investment Board.
The 500 large to medium-sized U.S. companies that are traded on the U.S. stock markets make up the S&P 500 Index. Standard & Poor’s Corporation (S&P) created the index to provide a representative indicator of the performance of U.S. stock markets. The 123 industries represented by the companies in the index are divided into the 11 major sector groups depicted in the chart. The S&P 500 Index’s stocks account for about 85% of the market value of the US stock markets.
At the moment, State Street Global Advisors Trust Company and BlackRock Institutional Trust Company, N.A. share the responsibility for selecting, purchasing, investing, and managing the assets in the C Fund. The C Asset holds every one of the stocks remembered for the S&P 500 Record in practically the very loads that they have in the file. The C Fund’s performance is judged by how closely its returns match those of the S&P 500 Index.
Note: A fund reallocation is the total redistribution of a participant’s existing account balance among the TSP funds. A fund transfer means moving money from one or more TSP funds to one or more other TSP funds, or moving money to and from the mutual fund window. After the first two of either type of transaction, for the remainder of the month, a participant can only move money into the G Fund. (For participants with more than one TSP account, this rule applies to each account separately.)
C Fund Frequently Asked Questions
1) Why ought I to put money into the C Fund?
A) The C Fund provides investors with the opportunity to gain equity ownership gains in stocks of large and mid-sized U.S. companies.
2) Do I accept the risk of the market and inflation?
A) C Fund returns fluctuate with the S&P 500 Index’s stock prices (market risk) or if C Fund investments do not outpace or grow sufficiently to compensate for the decrease in purchasing power (inflation risk).
3) How can I utilize my TSP’s C Fund?
A)In a portfolio that also includes stock funds that track other indexes like the S Fund and the I Fund, the C Fund can be useful. You can reduce your exposure to market risk by investing in all stock market segments as opposed to just one. The C Asset can likewise be helpful in a portfolio that contains bonds. A retirement portfolio with bond funds like the F Fund and stock funds like the S and I Funds typically has lower volatility than one with only stock funds.
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