TSP S fund

TSP I fund

Source: TSP.GOV

Annual Returns

The international index fund

What is the I fund?

The I Fund's investment objective is to match the performance of the MSCI EAFE (Europe, Australasia, Far East) Index which invests in the largest companies in the developed world outside the US and Canada.  This fund comes with the additional risk of currency movements which may add or subtract from its total returns. 

While normally diversification is considered a positive risk reduction strategy, we believe the best international exposure is already obtained in the TSP C fund which derives 31% of its revenue from non-US countries.  In fact, by adding the TSP I fund to your allocations you could be over-weighting your exposure to foreign stocks and greatly under-weighting your returns to one of the best investment sectors - tech.  The TSP I fund's index is weighted at only 5-6% tech compared to 26% for the SP500 index.  Furthermore, the SP500 tech sector obtains 60% of its revenue from non-US countries!

TSP & Vanguard Smart Investor is not a fan of investing in the TSP I fund for a number of reasons to include the one mentioned above.  For more uncommon TSP investing advice follow us at our free blog or become a member.

To compare the make-up of the major equity funds by sector weighting please review compare equity funds.

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