TSP performance was mixed in February 2026, with a notable shift in market dynamics favoring international equities over U.S. large caps. Amid mixed economic signals, including persistent inflation data and geopolitical tensions, the TSP’s core funds delivered varied results. The standout performer was the I Fund, which surged amid a global rotation away from U.S. stocks. Overall, the month highlighted the benefits of diversification, as non-U.S. markets outpaced domestic ones.
Fund
Description
February Return
YTD Return
12-Month Return
G Fund
Government Securities (stable, low-risk)
0.33%
0.70%
4.39%
F Fund
Fixed Income (bonds)
1.63%
1.84%
6.28%
C Fund
Common Stocks (S&P 500)
-0.76%
0.68%
16.96%
S Fund
Small/Mid-Cap Stocks
1.08%
3.52%
16.58%
I Fund
International Stocks
6.05%
12.34%
42.22%
These figures reflect official TSP data and align with broader market indices. The YTD gains built on a strong January, where the I Fund had already risen 5.94%, setting the stage for its dominance.
Breakdown of Key Drivers Behind the Returns
The G Fund’s modest 0.33% gain stemmed from its stable investment in special-issue U.S. Treasuries, yielding around 4.25% annualized. Its 12-month return of 4.39% underscores its role as a safe haven.
The F Fund benefited from a bond rally, returning 1.63% as Treasury yields fell to lows like 3.97% on the 10-year note. However, sticky inflation capped gains, contributing to a YTD of 1.84% and 12-month of 6.28%.
In contrast, the C Fund dipped 0.76%, mirroring the S&P 500’s decline amid AI-sector selloffs and tariff concerns. YTD stood at 0.68%, with a solid 12-month of 16.96% reflecting prior U.S. strength.
The S Fund edged up 1.08%, outperforming large caps thanks to a rotation toward value and cyclical sectors like energy and materials. Falling short-term rates eased borrowing for smaller firms, boosting YTD to 3.52% and 12-month to 16.58%.
The I Fund’s impressive 6.05% gain was fueled by a weakening U.S. dollar, cheaper overseas valuations, and flows into Europe and Japan. This pushed YTD to 12.34% and an eye-popping 12-month return of 42.22%, signaling sustained international momentum.
Looking Ahead
February’s results emphasize the TSP’s value in turbulent times, with international exposure proving rewarding. Investors should monitor inflation trends and geopolitical risks, as they could influence future shifts. As always, a Federal Retirement Consultant (FRC®) can help you align your allocations with personal risk tolerance and retirement goals.
