The F Fund: risk without reward
The G Fund has done better lately.
The G Fund can’t lose money. The F Fund can. Know which job you need bonds to do.
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1. What the F Fund is supposed to do
The F Fund tracks the Bloomberg U.S. Aggregate Bond Index: Treasury, agency, corporate and mortgage bonds. The idea was a little more return than the G Fund for a little more risk.
| G Fund | F Fund | |
|---|---|---|
| Holds | Special Treasury securities issued only to the TSP | A market index of U.S. bonds |
| Can lose money? | No | Yes, when rates rise |
| Main risk | Inflation | Interest rates and credit |
2. F vs G, year by year
| Year | F Fund | G Fund | Winner |
|---|---|---|---|
| 2020 | 7.50% | 0.97% | F |
| 2021 | −1.46% | 1.38% | G |
| 2022 | −12.83% | 2.98% | G |
| 2023 | 5.58% | 4.22% | F |
| 2024 | 1.33% | 4.40% | G |
| 2025 | 7.21% | 4.44% | F |
| 2026, Jan–Sep | −2.75% | 3.41% | G |
Over 2021 through 2025, $10,000 in the F Fund ended at about $9,850; in the G Fund, about $11,860. Over 2023 through 2025 the F Fund edged ahead, about 4.7% a year to 4.4%. The multi-year figures are our calculation from the TSP’s annual returns.
3. Why it fell short
Bond prices fall when interest rates rise. When rates jumped in 2022, the F Fund took its worst loss on record. The G Fund’s rate is set from Treasuries with four or more years to maturity, so it earned more as rates rose, with no price drop at all.
That is the catch: when the G Fund pays a solid rate with no risk, the F Fund has to beat it while carrying risk. It hasn’t done that reliably since 2020.
4. When the F Fund still helps
- When stocks crash and rates fall. In 2020 the F Fund returned 7.50% while the G Fund paid under 1%.
- When rates drop. Falling rates raise bond prices; the G Fund gets no such boost.
- Inside the L Funds. They hold some F Fund for balance; you don’t have to choose it yourself.
5. How to decide
- Need money you can’t afford to see fall? That job belongs to the G Fund. See G Fund vs C Fund.
- Want bonds to balance stocks? The F Fund can do that, if you can sit through a year like 2022.
- Don’t chase last year. F beat G in 2025 and lost to it in 2026 so far.
- Close to retiring? Your first five years matter most. See a TSP downturn at 60 and the complete fund guide.
Reworking your mix? Federal Warrior’s TSP fund allocation guide and TSP projector help. Your TSP isn’t the only safety net: Warrior Insure’s life coverage calculator covers the rest. Retiring on disability? Warrior Disability explains the FERS disability formula.
6. Frequently asked questions
What does the TSP F Fund invest in?
U.S. investment-grade bonds. It tracks the Bloomberg U.S. Aggregate Bond Index, which holds Treasury, government agency, corporate and mortgage-backed bonds. BlackRock and State Street manage it. Unlike the G Fund, its value goes down when interest rates rise.
Has the F Fund beaten the G Fund lately?
No. Over the five years 2021 through 2025, the F Fund averaged about -0.3% a year and the G Fund about 3.5%, by our calculation from the TSP’s annual returns. The F Fund lost 12.83% in 2022, its worst year, and was down 2.75% for 2026 through September while the G Fund was up 3.41%.
Can the G Fund lose money?
Not in dollars. The G Fund holds special Treasury securities issued only to the TSP, and its principal is guaranteed. Its rate is reset monthly from the average yield on Treasuries with four or more years to maturity. Its risk is inflation, not losses.
Why would anyone hold the F Fund?
For diversification. Bonds can rise when stocks fall, as in 2020, when the F Fund returned 7.50%. It also earns more than the G Fund when rates fall. But it carries price risk the G Fund doesn’t, so it is not a substitute for the G Fund’s safety.
Should I move my F Fund money to the G Fund?
That depends on why you hold bonds. If it’s for safety you can count on, the G Fund does that job without price swings. If it’s to balance stocks and you can accept bond losses in years like 2022, the F Fund can still play that role. This is general information, not advice.
Past returns don’t predict future returns. General information, not investment advice.