The “Magnificent 7” Problem Hiding in Your C Fund (and 4 Easy Fixes)

The C Fund feels like “owning the market,” but lately a small group of mega-cap tech names has pulled a lot of the weight.

That concentration can supercharge gains. But it can also magnify stumbles at the exact moment you’re trying to protect retirement dollars.

This isn’t a call to dump the C Fund.

It’s a reminder to manage theme risk inside an index.

If a handful of stocks set the tone, your portfolio can behave more narrowly than you intend…

Especially dangerous in the early years of withdrawals when sequence risk bites hardest.

Simple Ways to Add Balance (Inside TSP Only)

Start by widening your U.S. exposure.

Pair the C Fund with the S Fund, which owns U.S. stocks outside the S&P 500.

That combo gives you more of the market’s engine without abandoning indexing.

Layer in the I Fund for developed international exposure. These different sectors and currencies add shock absorbers you can’t get from U.S. stocks alone.

Finally, decide how much cushion you want from F (core bonds) and the uniquely stable G Fund.

• A workable mix: 45% C / 25% S / 20% I / 10% G

• Prefer autopilot? Choose the L Fund closest to your retirement year and let it rebalance across C/S/I/F/G for you.

Bottom Line

The C Fund remains a solid core. Just don’t let it be the whole story. A deliberate mix of C + S + I + F/G for balance keeps your TSP sturdy no matter which seven (or three, or ten) names are in the headlines.

Best,
—FWR