Q&A for federal workers: Being selective in TSP investing
March 6, 2018 at 6:00 AM
Question: I do not want my TSP investments going to support certain companies. Is there a way to avoid it?
Answer: The Thrift Savings Plan’s funds all are based on broad indexes. If you invest in one of the stock index funds, you are investing in each company represented in that fund, if only a little.
To avoid investing in a particular company at all, your only option is to find which index includes its stock and do not invest in that fund. The C Fund tracks the Standard & Poor’s 500 index of the largest companies, the S Fund tracks almost all publicly traded smaller companies, and the I Fund tracks large companies of about 20 countries. The L Funds reflect investments in those funds in ratios varying by the target date to start withdrawals.
You may have to limit yourself to the G Fund of government securities, which has little potential for growth, or the fixed income F Fund, which has more growth potential but does include some corporate bonds.
The TSP has authority to allow investing in outside mutual funds that would be more tightly targeted, but that investment “window” is not projected to open until 2020.