introducing TSPinvestor Apex

A new strategy is being introduced which gives better returns than both the Basic and Plus  — the Apex. The returns of Apex exceed the Plus by 4% annually – a 10-year annual return of about 23% (the Plus is about 19%; Basic is 12%).

The Apex uses the Plus strategy as a base, but includes a more aggressive maneuver during months when the top allocations fund is better than the next by more than 9% – it allocates 100% to the top fund.

So for example, say the Plus recommends 35% C, 25% S, 15% I, 15% F and 5% G.  Because the highest recommendation (C Fund, 35%) is larger than the 2nd highest (S Fund, 25%) by at least 9%, the Apex then recommends 100% allocated to highest fund (C Fund) and none to the others.

If the difference is less than 9% between the highest and the next highest, then the TSP Plus allocations are used.

The data charts will be updated to include the Apex – but another post (comparisons) already shows the Apex performance.

As with the Plus, the recommendation will come on/about the 9th of the month.

Time will tell if the actual performance matches the expected.

TSPinvestor performance compared to other options

In looking at options for getting best investment of your money in the Thrift Savings Plan (TSP), a comparison of returns of various lengths of time is very useful; and a look at how volatile, or unpredictable, a fund/strategy is compared to each other, is useful,as well.

There are fixed allocation (buy and hold) investment options, or ones such as the TSPinvestor where the allocations are changed frequently.  Either way, the information is powerful to deciding your strategy.

Below you’ll find various options and their returns.

10-Year Annual (2005-2014)

  1. TSPinvestor Apex = 23.3%
  2. TSPinvestor Plus = 19.3%
  3. TSP Millionaire = 17.9%
  4. TSPinvestor Basic = 12.1%
  5. S Fund only = 9.4%
  6. TSP Pilot Aggressive = 9.0%
  7. 50% C & S = 8.9%
  8. TSP Folio = 8.6%
  9. C Fund only = 7.7%
  10. 33.3% in C, S & I = 7.4%
  11. 20% in each = 6.4%
  12. F Fund only = 4.9%
  13. I Fund only = 4.6%
  14. G Fund only = 3.2%

5-Year Annual (2010-2014)

  1. TSPinvestor Apex = 18.8%
  2. TSP Millionaire = 17.4%
  3. S Fund only = 17.1%
  4. TSPinvestor Plus = 16.3%
  5. 50% C & S = 16.3%
  6. C Fund only = 15.5%
  7. 33.3% in C, S & I = 12.7%
  8. TSP Pilot Aggressive = 11.1%
  9. TSPinvestor Basic = 9.4%
  10. 20% in each = 9.0%
  11. TSP Folio = 8.9%
  12. I Fund only = 5.5%
  13. F Fund only = 4.7%
  14. G Fund only = 2.2%

3-Year Annual (2012-2014)

  1. S Fund only = 20.9%
  2. 50% C & S = 20.7%
  3. C Fund only = 20.4%
  4. 33.3% in C, S & I = 17.5%
  5. TSPinvestor Apex = 13.4%
  6. TSP Millionaire = 13.3%
  7. TSPinvestor Plus = 12.5%
  8. TSP Pilot Aggressive = 11.8%
  9. 20% in each = 11.4%
  10. I Fund only = 11.1%
  11. TSP Folio = 10.2%
  12. TSPinvestor Basic = 9.4%
  13. F Fund only = 3.1%
  14. G Fund only = 1.9%

1-Year Annual (2014)

  1. C Fund only = 14.6%
  2. 50% C & S = 11.7%
  3. TSPinvestor Apex = 10.7%
  4. TSPinvestor Plus = 9.9%
  5. TSP Folio = 8.8%
  6. S Fund only = 7.7%
  7. F Fund only = 7.3%
  8. TSP Pilot Aggressive = 6.0%
  9. TSPinvestor Basic = 5.7%
  10. 33.3% in C, S & I = 5.3%
  11. 20% in each = 5.1%
  12. G Fund only = 2.3%
  13. TSP Millionaire = (0.4)%
  14. I Fund only = (6.2)%

Volatility – annualized (smaller is less risky)

  1. G Fund only = 0.3%
  2. F Fund only = 3.1%
  3. TSP Folio = 5.4%
  4. TSPinvestor Basic = 10.0%
  5. TSP Pilot Aggressive = 10.0%**
  6. 20% in each = 10.0%
  7. TSPinvestor Plus = 13.5%
  8. C Fund only = 14.5%
  9. TSP Millionaire = 14.5%**
  10. TSPinvestor Apex = 15.2%
  11. 50% C & S = 16.3%
  12. 33.3% in C, S & I = 16.3%
  13. S Fund only = 18.0%
  14. I Fund only = 18.4%

** estimated

Sharpe Ratio – using G Fund as baseline low risk investment. Higher number indicates more desirable fund to invest in.

  1. TSPinvestor Apex = 1.32
  2. TSPinvestor Plus = 1.19
  3. TSP Millionaire = 1.01
  4. TSP Folio = 1.00
  5. TSPinvestor Basic = 0.89
  6. TSP Pilot Aggressive = 0.58
  7. F Fund only = 0.55
  8. 50% C & S = 0.35
  9. S Fund only = 0.34
  10. 20% in each = 0.32
  11. C Fund only = 0.31
  12. 33.3% in C, S & I = 0.26
  13. I Fund only = 0.08
  14. G Fund only = 0.00 (base)

What does this mean?  After assessing all the options here, the best is either TSPinvestor Apex, or TSPinvestor Plus.  Each provide excellent returns and relatively low risk. The Sharpe Ratio shows each to be solidly above the other options.

But there is also some good evidence that the monthly allocation strategies are clearly above the buy and hold (or fixed) strategies.  The Sharpe Ratio for these are all above the other options by significant amounts.

TSPinvestor Apex is an aggressive fund which puts 100% in one of the funds if it appears to be a clear favorite. If the TSPinvestor Plus’ top allocation is at least 9% greater than the 2nd best, then TSPinvestor Apex puts 100% in that top allocation, otherwise it matches the TSPinvestor Plus.

TSPinvestor Plus is an aggressive fund which uses leading economic indicators, and historical TSP fund information to determine monthly allocations.

TSPinvestor Basic is an aggressive fund which uses historical TSP fund information to determine monthly allocations.

TSP Folio is a monthly allocation service offered by subscription (not affiliated with TSPinvestor).

TSP Millionaire is a monthly allocation service  offered by subscription (not affiliated with TSPinvestor).

TSP Pilot Aggressive is a monthly allocation service offered by subscription (not affiliated with TSPinvestor).











the I Fund .. what is it?

The Thrift Savings Plan (TSP) International Stock Index Investment Fund, or I Fund, offers a potentially high return by investing in the stocks of large companies in developed countries outside the U.S. The goal of the fund is to match the performance of the MCSI EAFI Index, which includes countries in Europe, and the Australasia/Far East. The risk to returns are the decline of company stock value (market risk) and increases to the value of the dollar (currency risk).

The 10-year (2005-2014) annual return is 4.58% and is 4.56% since its inception in May 2001. There is about $33 Billion invested in the fund and it charges 2.9 Basis Points ($0.29 per $1000 balance). The fund is managed by BlackRock Institutional Trust Company.

The countries included in the index are: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, Australia, Hong Kong, Israel, Japan, New Zealand, and  Singapore. There are more than 900 companies in the index.

The largest holdings in the I Fund are (as of December 2014):

Nestle (wiki)

Royal Dutch Shell Class A (wiki)

Novartis (wiki)

BP (wiki)

Roche Holding Ltd Genussch (wiki)

Commonwealth Bank of Australia (wiki)

HSBC Holdings (wiki)

Bayer (wiki)

Toyota Motor Corporation (wiki)

Total (wiki)

The TSPinvestor Basic and Plus each utilize the I Fund at various times as an alternative/compliment to the C and S Funds.

TSP Fund Information – March 2015

MSCI EAFE Stock Index

the S Fund .. what is it?

The Thrift Savings Plan (TSP) Small Capitalization Stock Index Investment Fund, or S Fund, offers fairly high returns by investing in small and medium size U.S. companies. The goal of the fund is to match the performance of the Dow Jones U.S. Completion Total Stock Market (TSM) Index, which is a very broad market index of stocks that are not included in the S&P 500. There is a risk of loss in the S Fund when the company stock prices decline.

For efficiency in fund management, most of the largest companies in the TSM Index ($1B market value) are included in the S Fund. And a mathematical formula selects the other smaller companies so that the diversity of the TSM Index is preserved in the S Fund. There is also a percentage of the funds that are invested in liquid futures contracts that allow for daily participant fund activity (interfund transfers and withdrawals).

The 10-year (2005-2014) annual return is 9.44% and is 9.19% since its inception in May 2001. There is about $50 Billion in assets in the fund and it charges 2.9 Basis Points, or $0.29 per $1000 fund balance. The S Fund is invested in an account managed by BlackRock Institutional Trust Company.

Here is the breakdown of the type of stocks invested by the S Fund (as of March 2015):
Financials – 23%
Information Technology – 16%
Consumer Discretionary – 16%
Industrials – 15%
Health Care – 13%
Materials – 6%
Energy – 4%
Utilities – 3%
Consumer Staples – 3%
Telecom – 2%

The 10 largest companies in the S Fund are (as of December 2014):
American Airlines Group, Inc. (wiki)
Hospital Corporation of America (HCA) Holdings, Inc. (wiki)
Liberty Global Plc Class C (wiki)
Graphic Packaging Holding Co. (wiki)
Illumina, Inc. (wiki)
Tesla Motors, Inc. (wiki)
United Continental Holdings, Inc. (wiki)
Las Vegas Sands Corporation (wiki)
LinkedIn Corporation Class A (wiki)
Twitter, Inc. (wiki)

The TSPinvestor Basic and Plus invest in the S Fund heavily during boom times in the stock market – its returns are quite impressive.

TSP Fund Information – March 2015
Dow Jones U.S. Completion TSM Index

the C Fund .. what is it?

The Thrift Savings Plan (TSP) Common Stock Index Investment Fund, or commonly referred to as the C Fund, is a fairly high return investment in a broadly diversified portfolio of medium and large U.S. companies (valued between $5B and $650B). The goal of the fund is to match the performance of the S&P 500 Index, and public law dictates the money be invested in a portfolio of U.S. stocks that are representative of the whole market. The risk in the fund is market loss, or the decline of company stock values.

The 10-year annual return (2005-2014) is 7.72% and is 10.43% since its inception in January 1988. There is about $140 Billion in assets in the C Fund and it charges 2.8 Basis Points, or $0.28 per $1000 balance. The C Fund is invested in an account managed by BlackRock Institutional Trust Company.

Here is the breakdown of the type of stocks invested by the C Fund (as of March 2015):
Information Technology – 20%
Financials – 17%
Health Care – 14%
Consumer Discretionary – 12%
Industrials – 10%
Consumer Staples – 10%
Energy – 8%
Materials – 3%
Utilities – 3%
Telecom Services – 2%

The Top 10 C Fund holdings are (as of December 2014):
Apple Inc. (wiki)
Wells Fargo & Company (wiki)
Exxon Mobil Corporation (wiki)
General Electric Company (wiki)
Microsoft Corporation (wiki)
Procter & Gamble Company (wiki)
Johnson & Johnson (wiki)
JP Morgan Chase & Company (wiki)
Berkshire Hathaway Inc. Class B (wiki)
Chevron Corporation (wiki)

There is also a small percentage that is invested in S&P Futures contracts, which allows for the interfund transfers that occur on quick notice.

The TSPinvestor Basic and Plus invest in the C Fund at times of great growth in the stock market and provide very good return during these times.

TSP Fund Information – March 2015
Standard & Poor’s 500 Stock Index

Monthly allocations vs. fixed allocations .. a comparison

For most Thrift Savings Plan investors, or participants, the investing, or allocation strategy is fixed.  A certain percentage of money in each fund, or particular funds are chosen, and then the money is left there for some long period of time. Another strategy is to move the money allocations on a more frequent basis, such as every month.

The TSP allows moving money twice a month between any funds, and a third time only to the G Fund.  So it isn’t practical to move the money more than once a month on a regular basis.

For the fixed-percentage investment strategy the effort is easy. Move money between the funds once, and then occasionally re-balance the funds to keep the percentages even.  There are various strategies to choose from: choose your own percentages, rely on a financial planner’s advice, or utilize the Lifetime funds that TSP offers.

The monthly allocations require a little more work – the funds are moved once a month. However this requires about 5 minutes of time online – a minimal effort. And if chosen properly this strategy can take advantage of times when the stock markets are gaining, and avoid losses during times when stock market is losing money. There again are various ways to do this – pick the percentages yourself, or get advice from a financial adviser.

There are many advisers and plenty of ones offering TSP advice – TSPinvestor is one option. TSPinvestor is an adviser and offers the Basic and Plus strategies. For now, these strategies are offered for free while they are proven to work.

The utilization of the fixed percentage will gain between 3% and 9% annual interest, depending upon which funds are picked.  The TSPinvestor Basic is projected to gain 12% annually; the TSPinvestor Plus is projected to gain 19% annually.

the F Fund .. what is it?

The Thrift Savings Plan Fixed Income Index Investment Fund, or F Fund for short, is a bond-based investment with relatively low risk, that exceeds the returns of money market funds over the long term. By law, it must be invested in fixed-income securities.

The objective of the F Fund is to match the performance of the Barclays Capital U.S. Aggregate Bond Index. The earnings are comprised of interest income on the securities, and gains, or losses, in the value of the securities. The risk in the F Fund is primarily due to market risk of the underlying securities declining in value, and due to prepayment risk (payment of the bond before it matures).  The risk of nonpayment of the bonds (credit risk) is very low, because only investment-grade securities are used and there is broad diversification.

The bond portfolio is comprised of 40% government-related Treasury and Agency bonds (government- and corporate-issued, government-backed), 30% asset-backed securities (mortgages, credit cards, auto/home loans, etc.), and 30% corporate and non-corporate bonds (standard credit).

The 10-Year (2005-2014) annual return was 4.89%, and since its inception in January 1988, it has gained 6.66%. There is about $24 Billion of assets in the F Fund, which charges 2.9 basis points ($0.29 per $1000) to manage. It is administered by the BlackRock Institutional Trust Company.

The average duration of the bonds is about 5 years and the yield at maturity is 2.25%.

Both the Plus and Basic utilize the F Fund during downturns in the stock market, and is a solid option for good gains during these times.

TSP Fund Information – March 2015

TSPinvestor Basic, Plus and Apex .. what are they?

The TSPinvestor has three investment allocation strategies – called the Basic, Plus, and the Apex. These are formulas that recommend monthly Thrift Savings Plan allocations for the individual G, F, C, S and I funds.

A simulation of implementing the Basic, Plus and Apex was done and the 10-year annual return (2005-2014) for the Basic was 12%, the Plus was 19%, and the Apex was 23% (see the comparative annual returns here).

The following link is to a third party site that I use to accurately capture the allocation returns. I have been using this since Dec 2015. So while the data thus far is limited, it is a confirmed and accurate accounting of the performance of these funds. I do recommend checking this out.

The development of the model and formulas relied upon a human decision. But these models are not tweaked or adjusted, nor is there any human decision regarding the monthly allocations.


The Basic has a model/formula that is solely based upon historical returns of the TSP G, F, C, S and I Funds. The Plus model/formula is based upon historical returns of the individual TSP funds, as the Basic does, but also includes several leading economic indicators.

The Basic, Plus and Apex models, and formulas were derived using mathematical and statistical techniques. A full compliment of factors/variables were considered and selected based upon their effect on matching the historical data. The historical data used was from January 2003 through the present.

The Basic uses only the TSP fund historical data to feed the model/formula. The Plus additionally uses three leading economic indicators. And the Apex uses the Plus model – but then determines if it’s optimal to invest 100% in the top allocation recommendation for that month.

Is It Right For You?

The decision to allocate your TSP account is a serious one. The strategy to allocate (buy) and then don’t change (hold) comes easy, and often is very predictable over the long run. For example, an aggressive strategy in the mid 2000’s to invest 50% in the C Fund and 50% in the S Fund over the course of 12 years yielded about 8-9% per year, which is a fairly good return on your investment. However, there is no doubt that the monthly allocation strategy will yield a higher return. And the risk is less than the aggressive buy and hold strategies, such as the example above.


The first step in implementing the TSPinvestor strategy is to choose which fund is best – the Basic, Plus or the Apex. At first glance the 19% return of the Plus, or the 23% of the Apex seem obvious choices. However the 12% return of the Basic may be your choice. Look at some historical data to help decide. Either way, pick one and stick to it for the long term.

The implementation of the allocations is done on a particular day of each month. The Basic is allocated on the last business day prior to the 2nd of the month; The Plus and Apex are allocated on the last business day prior to the 10th of the month. The recommended percentage for each fund should be changed within the TSP website for the fund distribution (via interfund transfers) and also future contributions.

the G Fund .. what is it?

The G Fund, or Government Securities Investment Fund, in the Thrift Savings Plan is the lowest gaining, least volatile fund. It will not lose money, but it also doesn’t give much of a return either. However there are months where the G Fund out gains the other funds and is a solid option during a depressed stock market.

The G Fund money is invested in short-term U.S Treasury securities specifically issued to the TSP. The payment of the principle and interest is guaranteed by the U.S. Government. The goal of the fund is to maintain a higher return than inflation. The interest rate is set every month and is based upon a weighted average of outstanding Treasury notes and bonds that have more than four years to maturity. The earnings are entirely based upon the interest income of the security fund.

The comparison of the G Fund to the short-term marketable Treasury securities (T-Bills) is often drawn. However the G Fund earns about 1.8% more annually than the T-Bills. That is because the G Fund earns an intermediate rate, whereas the T-bills earn a short-term rate.

The administrative expenses for the fund is 2.9 basis points, or $0.29 per $1000 account balance.

The 10-Year (2005-2014) annual return was 3.19%, and since its inception in April 1987 the return is 5.43% annually. There is about $200 billion invested in the G Fund.

Both the Plus and Basic utilize the G Fund heavily during times of loss in the stock funds (C, S and I).

TSP Fund Information – March 2015