TSP Fund Pairing Insights: Navigating Risk and Returns
30 November 2025
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Visualization for 30 November 2025
This actual visualization illustrates the trade-off between risk and return for different TSP fund mixes based on three years of monthly data.
How to Read the Chart
X-Axis:
Represents the “risk” of the particular mix, measured by statistical covariance over the last three years of monthly data. Left to right: From less variable (lower risk) to more variable (higher risk).
Y-Axis:
Represents the statistical “expected monthly return” of the particular mix, measured by the mean of the last three years of monthly data. Bottom to top: From lower returns to higher returns.
Legend:
Each line represents a specific fund mix (e.g., G and F Fund). The line shows how the risk and return evolve as the mix transitions from 100% of one fund to 100% of the other in 5% increments.
Interpretation:
When 100% of the investment is in the G Fund, the expected return is 0.3465%, with a risk of 0.0003739.
Meanwhile, when 100% of the investment is in the C Fund, the expected return increases to 1.4722%, with a risk of 0.04419.
This example demonstrates how risk and return adjust based on fund allocation.
Key Insights for October 2025
Highest Return Mix:
100% C Fund offered the highest return.
Lowest Risk Mix:
The G Fund had the lowest risk while providing more returns than F Fund.
The November chart shows a market that’s mostly mean-reverting rather than breaking in a new direction. The G Fund did what it always does and delivered almost exactly its usual steady gain, while the F Fund, C Fund, and I Fund quietly reversed October’s small pullback with equally small positive moves. The S Fund was the outlier, giving back a bit of last month’s strength. On the three-year risk/return view, that translates into slightly lower volatility across the risk funds and a tiny trim to expected returns for the C Fund, S Fund, and I Fund, with the F Fund bucking the trend by offering a touch more expected return at slightly lower risk. Overall, the curves have only inched—this is a fine-tuning month, not a regime change.