C FundEdit

The C Fund is one of the core investment options available to participants in the Thrift Savings Plan (TSP), a retirement program for federal employees and uniformed service members. It provides broad exposure to the U.S. stock market by tracking the S&P 500 index, offering a simple, transparent way to participate in the long-run growth of American companies. Like other stock funds in the TSP lineup, the C Fund emphasizes low costs, broad diversification, and a passive approach to earnings from ownership in large, well-established businesses. In doing so, it aims to deliver the return of the leading segment of the U.S. economy without the uncertainties and higher fees that can accompany active stock picking. Thrift Savings Plan S&P 500 Index fund

What the C Fund is - Investment objective: to mirror the performance of the S&P 500, a widely used benchmark consisting of 500 large-cap U.S. companies, thereby providing investors with exposure to a broad slice of the American corporate landscape. S&P 500 Stock index - Method: the fund seeks to closely replicate the index through passive management, typically holding the stocks in the same proportions as the index and rebalancing as the index changes. This approach minimizes turnover and expenses while delivering exposure to the market’s overall move. Passive management Index fund - Scope: by design, the C Fund concentrates its holdings in large and mid-sized U.S. firms, spanning many sectors of the economy. While it can be influenced by the fortunes of a handful of giant corporations, its breadth remains a defining feature. United States stock market Large-cap stocks

How it fits into the TSP - Oversight and structure: the C Fund operates under the governance of the Federal Retirement Thrift Investment Board (FRTIB), which administers the TSP and sets rules for how the funds are managed and disclosed to participants. Federal Retirement Thrift Investment Board Thrift Savings Plan - Role within a diversified plan: alongside other funds in the TSP lineup—the G Fund (government securities), F Fund (fixed income), I Fund (international equities), and the S Fund (small-cap U.S. equities)—the C Fund is a staple for those aiming for broad U.S. equity exposure as part of a long-term retirement strategy. G Fund F Fund I Fund S Fund]] - Accessibility and costs: as part of a government-backed retirement program, the C Fund typically features one of the lowest expense ratios in the fund industry, making it a cost-effective vehicle for building wealth over decades. Low costs are a central selling point for investors who favor market participation over active stock picking. Expense ratio

Performance and characteristics - Long-run behavior: the C Fund’s performance tracks the S&P 500, which in aggregate has delivered meaningful long-term gains for investors who stay the course through market cycles. The fund’s results are influenced by the earnings, innovation, and growth of large U.S. corporations, as well as macroeconomic conditions. Investors should expect periods of volatility and drawdowns characteristic of broad equity markets. Stock market volatility Economic cycles - Diversification and risk: while the index approach reduces the risk of individual stock missteps, it cannot eliminate market risk. Events such as recessions or structural shifts in the economy can affect the entire index. The concentration in a relatively small group of mega-cap companies can influence performance more than a broader, more dispersed portfolio would. Risk management Mega-cap conglomerates - Holdings and changes: the exact roster and weights of the C Fund shift over time as the S&P 500 is rebalanced, with changes reflecting new entrants, departing companies, and sector realignments. Investors can review the fund’s holdings and methodology through official disclosures. Holdings disclosure Rebalancing

Costs, comparisons, and practical considerations - Cost advantage of passive investing: the C Fund’s passive design means lower management fees and turnover compared with actively managed stock funds. Over the long run, this cost efficiency helps compound returns and reduces the drag that fees can impose on savings. Active management Fees and charges - How it compares to other options: for investors seeking broader exposure beyond large-cap U.S. equities, options like the S Fund (small-cap U.S. equities) or international funds may complement the C Fund. However, the simplicity and efficiency of tracking a well-known benchmark remain the key strengths of the C Fund. S Fund I Fund]] - Considerations for savers: the C Fund is designed for long horizons and disciplined saving. Its performance depends on the trajectory of the U.S. economy and the stock market, so diversification across asset classes and periodic rebalancing remain prudent parts of a retirement plan. Diversification Rebalancing

Controversies and debates - Passive investing vs active management: proponents of the C Fund argue that broad, low-cost exposure to the market is a rational, efficient way to grow wealth over decades, while critics worry that passive funds can underperform in certain environments or fail to harness opportunities that actively managed strategies might capture. The debate centers on whether the market’s price signals are best exploited by a simple index or by stock-picking expertise. Active management Market efficiency - Concentration risk and market power: because the S&P 500 tilts toward a small set of very large firms, the C Fund can become overweight in a few mega-cap names. Critics say this can magnify losses during downturns that hit those leaders, while supporters emphasize that broad market exposure still captures the fundamental drivers of the U.S. economy. Megacap Concentration risk - Corporate governance and proxy influence: some observers worry that large passive holders can wield outsized voting influence in corporate governance due to their shared ownership of index components. Others contend that market discipline and broad participation in capital formation ultimately align governance with shareholder interests and broad economic growth. Shareholder voting Shareholder activism - ESG and activist investing debates: while the C Fund itself does not pursue environmental, social, or governance screens as a core criterion, debates persist about whether such considerations should influence investment choices. Supporters argue that responsible investment aligns with long-run profits, while critics contend that profit should be the sole driver of decisions in a retirement plan. ESG investing Political considerations in investing - Policy and fiduciary expectations: the C Fund’s structure reflects a preference for minimal government interference in investment choices and a reliance on market mechanisms to allocate capital efficiently. Proponents argue this protects taxpayers and savers from political risk and bureaucratic inefficiency, while opponents may push for broader access to alternative investment approaches. Fiduciary duty Public policy and retirement security

See also - S&P 500 - Index fund - Passive management - Thrift Savings Plan - Federal Retirement Thrift Investment Board - United States stock market - Diversification - Rebalancing