Should You Invest In The C Fund Now?

The C Fund is a US federal government retirement plan, based on the S&P 500 index of 500 large and medium-sized US companies. It has been running since 1988 and has enjoyed strong growth over the years, although it has also suffered steep declines. The fund is designed to replicate the performance of the S&P 500, which has been trending upward for 400 years. So, is it too late to invest in the C Fund?

The C Fund's investment objective

The C Fund is a common stock index investment fund that forms part of the Thrift Savings Plan (TSP), the United States federal government's 401(k)-style retirement plan.

The C Fund must, by law, be invested in a portfolio designed to replicate the performance of an index of stocks representing the U.S. stock markets. The Federal Retirement Thrift Investment Board has chosen the S&P 500 as its benchmark. The C Fund holds all the stocks included in the S&P 500 Index in virtually the same weights that they have in the index. The performance of the C Fund is evaluated on the basis of how closely its returns match those of the S&P 500 Index.

The C Fund offers investors the opportunity to earn potentially high investment returns over the long term from a broadly diversified portfolio of stocks of large and medium-sized U.S. companies. It also provides exposure to gains from equity ownership of large and mid-sized U.S. company stocks.

The C Fund's performance evaluation

The C Fund is a US federal government retirement plan based on the S&P 500 index. It has been in operation since 1988 and has delivered strong returns over the long term. The C Fund's investment objective is to match the performance of the S&P 500, which is a broad market index comprising stocks of 500 large to medium-sized US companies.

The C Fund's performance has been evaluated against the S&P 500, with the fund's returns designed to replicate the index's performance. As of December 31, 2023, the C Fund held assets totalling $339 billion, with a total expense ratio of 0.480/$1,000 account balance, or 4.8 basis points. The fund's top holdings include well-known companies such as Microsoft, Alphabet, Meta, and Berkshire Hathaway.

Over the years, the C Fund has experienced both growth and steep declines in value. However, its long-term performance has been positive, with the S&P 500 earnings growing from $5 per share in 1988 to a peak of over $50 per share in 2021. Dividends, a key indicator of companies' health, have also risen steadily over time.

When considering the C Fund's performance, it is important to remember that past performance does not guarantee future results. However, the fund's long-term track record provides valuable insights and lessons for investors. One key lesson is to maintain a long-term perspective and continue investing regularly, even during market downturns.

In summary, the C Fund has delivered strong returns over its 35-year history, outperforming other funds during certain periods. Its performance has been closely aligned with the S&P 500, providing investors with exposure to large and mid-sized US company stocks. While there have been fluctuations, the C Fund has demonstrated the dynamism of the US free-market economy and the potential for significant rewards for investors who maintain a long-term perspective.

The C Fund's top holdings

The C Fund is a Common Stock Index Investment Fund that is part of the Thrift Savings Plan (TSP) offered to all US government employees. The C Fund's investment objective is to match the performance of the Standard and Poor's 500 (S&P 500) Index, which is made up of stocks of 500 large to medium-sized US companies. The C Fund is the most conservative of the three stock funds available in the TSP.

As of 31 December 2023, the top ten holdings of the C Fund were:

• MSFT (Microsoft Corporation)
• GOOGL (Alphabet Inc. Class A)
• META (Meta Platforms Inc Class A)
• GOOG (Alphabet Inc. Class C)
• BRK.B (Berkshire Hathaway Inc Class B)
• JPM (JPMorgan Chase & Co.)

The C Fund's fees

The C Fund is one of the original three Thrift Savings Plan (TSP) funds that began in the late 1980s. Its inception date was 29 January 1988. The C Fund is a US stock index fund that tracks the performance of the Standard and Poor's 500 (S&P 500) Index, a broad market index made up of stocks of 500 large to medium-sized US companies.

The C Fund's total expense ratio is $0.480/$1,000 account balance, or 0.048% (4.8 basis points). The investment expense ratio is $0.000/$1,000 account balance, or 0.0% (0.0 basis points). The fees are paid to the investment manager.

The C Fund's investment objective is to match the performance of the S&P 500 Index. The Federal Retirement Thrift Investment Board has chosen this index as its benchmark. The S&P 500 Index was designed by the Standard & Poor's Corporation (S&P) to provide a representative measure of US stock market performance. The companies in the index represent 123 industries classified into 11 major sector groups. The stocks in the S&P 500 Index represent approximately 85% of the market value of the US stock markets.

The C Fund holds all the stocks included in the S&P 500 Index in virtually the same weights that they have in the index. The performance of the C Fund is evaluated based on how closely its returns match those of the S&P 500 Index. The C Fund's asset managers are BlackRock Institutional Trust Company, N.A. and State Street Global Advisors Trust Company.

The C Fund is a very low-cost way to gain diversified exposure to the US stock market. With an annual expense ratio of 0.025%, it is a cost-effective option for investors.

The C Fund's historical returns

The C Fund is a US stock index fund that tracks the S&P 500 index. It is a common stock index investment fund that aims to match the performance of the Standard and Poor's 500 (S&P 500) Index, a broad market index made up of stocks of 500 large to medium-sized US companies. The S&P 500 Index represents about 75-85% of the market value of the US stock markets.

• 10 years: 13.72%
• 5 years: 16.06%
• 3 years: 10.44%
• YTD: 24.06%

The C Fund has experienced some volatility and declines over the years, including a worst drawdown of -55.2% since its inception. However, it has delivered positive returns over the long term, with a 35-year average annual return of 11.1% as of November 2022.

The C Fund's performance is closely tied to the performance of the US stock market and the broader economy. Despite some significant declines, the US free-market economy has demonstrated its dynamism and returned to long-term growth after challenging periods.

Frequently asked questions