Markets gave back some of their early 2026 gains in March. Rising global tensions pushed investors toward caution, sending most TSP funds into negative territory for the month, though a strong rally on the final trading day helped limit the damage.
March TSP performance broke down as follows:
Fund
March 2026
YTD 2026
12-Month
G Fund
+0.34%
+1.04%
+4.4%
F Fund
-1.77%
+0.04%
+4.4%
C Fund
-4.98%
-4.34%
+17.8%
S Fund
-4.58%
-1.22%
+20.8%
I Fund
-9.35%
+1.84%
+28.9%
As usual, the G Fund stood out as the only positive performer, reflecting its stability during periods of market stress. The I Fund, which had led earlier in the year, gave back a significant portion of those gains as international markets reacted sharply to unfolding global events. Lifecycle funds followed a similar pattern, declining in line with their equity exposure, with more conservative options seeing modest losses and aggressive allocations experiencing deeper pullbacks.
The primary driver behind March’s downturn was rising geopolitical tension tied to the Iran conflict. Oil prices surged past $100 per barrel amid concerns about supply disruptions in the Strait of Hormuz. That spike added to inflation fears and created uncertainty around future Federal Reserve policy, prompting investors to reduce exposure to equities. International markets were hit hardest, while U.S. large-cap stocks showed relatively more resilience.
Despite the turbulence, the final trading day of the month offered a reminder of how quickly markets can shift. Stocks rallied sharply on March 31, trimming what could have been even steeper losses across equity funds.
Zooming out, the TSP continues to demonstrate long-term strength. Total plan assets surpassed $1 trillion at the end of 2025, reflecting decades of consistent contributions from federal employees and service members. Participation remains high, and contribution levels continue to be strong, even as withdrawals increase with a growing retiree population.
March serves as a reminder that short-term volatility is a normal part of investing. For long-term participants, periods like this can present opportunities to continue investing at lower prices. As always, a Federal Retirement Consultant (FRC®) can ensure you allocations match your risk tolerance and overall retirement strategy.
