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TSP thrift savings plan


TSP 2030 L Fund

The TSP website describes the basic initial portfolio structure of their 2030 L Fund. This is considered an "aggressive" portfolio mix, and TSP is currently targeted to those TSP'ers who are expecting to start drawing down their accounts on or before 2030.

The mix is aggressively slanted to the TSP stock funds and closely matches the more typical "75/25" mix lifestyle portfolios available for investors in other 401k plans. Offering a "moderately aggressive" mix of stock and bond funds, the 2030 L Fund might appeal to those investors who are optimistic about the future of the stock market and willing to accept a "moderately aggressive" level of market risk in TSP stock funds to reach retirement goals.

TABLE XXI

 TSP Pilot Portfolio vs. TSP L Funds, Timed and Un-timed (1989 - 2007)*
Portfolio Annualized Return
(AR)5		 Maximum Draw-down
(Mdd)1		 Ulcer Performance Index
(UPI)2		 Ulcer Index
(UI)3		 Standard Deviation
(SD)4
TSP Income Fund 7.4% -4.2% 1.7 0.9 1.0
Timed Income Fund 8.0% -3.4% 2.3 0.8 0.9
TSP 2010 Fund 8.9% -19.4% 0.7 4.4 1.9
Timed 2010 Fund 10.7% -6.4% 3.7 1.4 1.4
TSP 2020 Fund 9.8% -29.0% 0.6 7.2 2.5
Timed 2020 Fund 12.4% -11.5% 3.1 2.2 2.0
TSP 2030 Fund 10.2% -35.1% 0.5 9.4 2.9
Timed 2030 Fund 12.5% -10.4% 3.5 2.1 1.8
TSP 2040 Fund 10.4% -40.9% 0.5 11.5 3.3
Timed 2040 Fund 14.2% -16.9% 3.1 3.4 2.6
TSP PILOT Standard PORTFOLIO 18.4% -8.0% 6.0 2.1 2.2
Note: Look for a low UI and Mdd and a high Return and UPI as keys to best performance.
Note: Since the TSP L Funds were introduced in 2005, L Fund proxies were used for prior years.
* Database begins 9/1/1988. Some periods based on proxy funds and indexes.
Also see information on our Pilot Aggressive Portfolio.

You can immediately see how aggressive (and risky) this 2030 L Fund actually is. With only a slight increase in performance over the less aggressive 2020 L Fund you pay for that insignificant added return by suffering a 35.1% account draw down (Mdd) over three years! That's a very significant draw down. In fact the market risk is eight times higher than that for it's sister, the Income L Fund, while increasing the performance only slightly.

The TSP Pilot Portfolio, over the same period, provided double the return with less than one-quarter the risk (UI) and one-third the draw down (Mdd) of the 2010 L Fund.

Our basic timed 2030 L Fund alternative improved the return while cutting the risk in half. In fact the long term timed 2030 L Fund risk adjusted performance, as measured by the UPI, was more than three times the performance of the standard 2030 L Fund! Again, professionally timed funds always reduce risk exposure and usually improve return as well--you get more "bang-for-the-buck."

Don't test the retirement waters alone. Put your TSP ship a league ahead by requesting your FREE ISSUE or by SUBSCRIBING at our special reduced rates today!

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TSP Pilot is a commercial service not associated in any way with the U.S. Federal government. TSP Pilot does not issue individual investment advice. TSP Pilot publications are prepared for informational and educational purposes only. Past stated hypothetical performance is not an indication of future performance.

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