Last Updated: October 4, 2026 Reading Time: 7 min
September 2026 TSP returns followed the same script as July: one fund gained, everything else finished red. The G Fund added +0.40% while the S Fund fell -3.86% and the F Fund dropped -2.59%. Rates rose sharply during the month. The yield on the 10-year U.S. Treasury note closed at 5.29% on September 30, its highest close since May 2002.
September 2026 TSP Returns: Core Funds
Every figure is from the TSP.gov rates-of-return data dated September 30, 2026. Trailing 12-month figures run through that date.
| Fund | September 2026 | YTD 2026 | Trailing 12-Mo |
|---|---|---|---|
| G Fund | +0.40% | +3.41% | +4.51% |
| F Fund | -2.59% | -2.75% | -1.77% |
| C Fund | -0.35% | +12.73% | +15.72% |
| S Fund | -3.86% | +11.62% | +11.82% |
| I Fund | -2.30% | +16.45% | +23.06% |
One number stands out in the trailing column: the F Fund's -1.77% over the past twelve months.
September 2026 TSP Returns: L Funds
| Fund | September 2026 | YTD 2026 | Trailing 12-Mo |
|---|---|---|---|
| L Income | -0.28% | +6.04% | +7.88% |
| L 2030 | -0.78% | +8.92% | +11.61% |
| L 2035 | -1.02% | +10.02% | +12.92% |
| L 2040 | -1.15% | +10.59% | +13.65% |
| L 2045 | -1.25% | +11.09% | +14.29% |
| L 2050 | -1.34% | +11.62% | +14.96% |
| L 2055 | -1.48% | +13.86% | +17.70% |
| L 2060 | -1.48% | +13.86% | +17.70% |
| L 2065 | -1.48% | +13.85% | +17.70% |
| L 2070 | -1.49% | +13.85% | +17.69% |
| L 2075 | -1.49% | +13.85% | +17.69% |
All L Fund figures are TSP.gov published returns through September 30, 2026.
The spread matches July's pattern. Shorter-dated funds lost less because L Income holds a large G Fund allocation. The long-dated funds (L 2055 through L 2075) carry more S Fund and I Fund, so September's equity and bond losses hit them hardest at 1.48% to 1.49%.
The S Fund's 2026 Scoreboard: Three Red Months, Still Up 11%
| Month | S Fund Return | YTD Leader After |
|---|---|---|
| January | +2.41% | I Fund |
| February | +1.08% | I Fund |
| March | -4.58% | I Fund |
| April | +9.96% | I Fund |
| May | +4.49% | I Fund |
| June | +4.34% | S Fund |
| July | -4.12% | I Fund |
| August | +2.27% | I Fund |
| September | -3.86% | I Fund |
The S Fund held the YTD lead only once in 2026, after June. September's loss dropped it from second to third place for the year, behind both the I Fund (+16.45%) and the C Fund (+12.73%). The S Fund recovered in the month after both March and July. Whether October follows is unknown.
Why September Hit Each Fund Differently
The 10-year Treasury yield closed at 5.29% on September 30. Higher yields push bond prices down and can weigh on stock valuations. The return data do not show how much of September's losses came from rates, but the pattern across funds fits a rate-driven month.
F Fund (-2.59%): Bond prices move opposite yields. The F Fund tracks the Bloomberg U.S. Aggregate Bond Index, which holds intermediate and long-term bonds, and it posted its largest monthly loss of 2026. The return data alone do not show how much of that loss came from rates.
S Fund (-3.86%): Small and mid-cap companies carry more debt relative to their size than large caps. Higher rates raise their borrowing costs and reduce future earnings estimates. That fits the S Fund falling about 11 times as much as the C Fund in September, the same size-factor split that appeared in July.
C Fund (-0.35%): Large-cap stocks, especially the technology and mega-cap names that dominate the S&P 500, held up better. They generate cash at scale and carry less rate sensitivity than smaller firms. The C Fund's near-flat month next to the S Fund's 3.86% drop is consistent with that contrast.
I Fund (-2.30%): The I Fund is not currency-hedged, so a stronger dollar reduces the converted value of its overseas holdings.
G Fund (+0.40%): The G Fund's return is set by statute and cannot lose principal. In a month where both stocks and bonds fell, it earned its usual return without downside exposure.
Monthly Winners: G Fund Now Leads Three Times
| Month | Monthly Winner | Return |
|---|---|---|
| January | I Fund | +5.94% |
| February | I Fund | +6.05% |
| March | G Fund | +0.34% |
| April | C Fund | +10.49% |
| May | C Fund | +5.26% |
| June | S Fund | +4.34% |
| July | G Fund | +0.39% |
| August | I Fund | +3.32% |
| September | G Fund | +0.40% |
The G Fund has now "won" three of nine months of 2026, March, July, and September. It won each time by the same method: not losing. Its YTD return from that approach is +3.41%. The I Fund, which led three months by posting genuine gains, is at +16.45%. Both are working as designed. Only one is designed for growth.
What a $100,000 Balance Looks Like After Nine Months
| Starting Balance | G Fund | F Fund | C Fund | S Fund | I Fund |
|---|---|---|---|---|---|
| $50,000 | $51,705 | $48,625 | $56,365 | $55,810 | $58,225 |
| $100,000 | $103,410 | $97,250 | $112,730 | $111,620 | $116,450 |
| $200,000 | $206,820 | $194,500 | $225,460 | $223,240 | $232,900 |
| $500,000 | $517,050 | $486,250 | $563,650 | $558,100 | $582,250 |
The I-over-G gap on a $100,000 balance is now $13,040 through nine months. The C Fund has produced $9,320 more than the G Fund on the same balance. The F Fund is the only position that has lost ground, down $2,750 on $100,000.
The Competitor Frames, and What the Table Shows
GovExec led with "TSP funds were back in the negative in September," focusing on the reversal from August's all-green board. FedSmith led with "TSP Returns Decline In September As Interest Rates Hit Their Highest Level Since 2002," pointing to rates.
Both framings are accurate. GovExec captures the whipsaw: every fund green in August, nearly every fund red one month later. FedSmith points to a likely mechanism: a rate move with a specific size and comparison point.
Model Your Own Allocation
Someone retiring in 2027 has less time to recover from a -3.86% month than someone 25 years from retirement. Use the free TSP Calculator to see what your balance and contribution rate project to at retirement under a 5%, 7% or 9% annual return. Over a full time horizon, one red month barely moves that projection. Run your numbers.
Frequently Asked Questions
What did TSP funds return in September 2026?
The G Fund was the only fund to gain, returning +0.40%. The S Fund fell 3.86%, the F Fund dropped 2.59%, the I Fund lost 2.30%, and the C Fund slipped 0.35%. Every L Fund also finished in the red, from L Income at -0.28% to the long-dated L 2070 and L 2075 at -1.49%.
Which TSP fund is leading 2026 year-to-date after September?
The I Fund leads at +16.45% through September 30. The C Fund is second at +12.73%, overtaking the S Fund, which dropped to third at +11.62%. The G Fund has returned +3.41%. The F Fund is the only core fund negative for the year at -2.75%.
Why did TSP funds fall in September 2026?
Bond yields rose sharply. The 10-year U.S. Treasury note closed at 5.29% on September 30, its highest close since May 2002. Rising yields push bond prices down, and the F Fund had its worst month of 2026. Higher yields may also have weighed on smaller companies in the S Fund, but the return and yield data alone do not show how much of the losses came from rates.
How has the S Fund performed in 2026 overall?
The S Fund has had three negative months in 2026: March (-4.58%), July (-4.12%), and September (-3.86%). Despite all three, it is still up +11.62% for the year through September. Each prior red month was followed by a recovery, though past months do not guarantee the next.
How did the L Funds perform in September 2026?
All 11 L Funds lost ground. L Income fell 0.28%, the shallowest loss. The long-dated L 2070 and L 2075 each fell 1.49%, the steepest. Shorter-dated funds held up better because of their larger G Fund weight. Every L Fund remains positive for the year.
Should I move my TSP to the G Fund after September?
The 2026 record makes a weak case for it. The G Fund has led three of nine months (March, July, September), all by simply not losing. Its year-to-date return is +3.41%. Every other core fund except the F Fund has returned more. Moving into the G Fund changes what you earn from here on. Its +3.41% is a past return that a new transfer does not collect, and selling stock funds after a drop means you are no longer in them if they recover.
Related Resources
- TSP Calculator: Project your balance at retirement from your contribution rate and an assumed annual return.
- TSP Fund Returns August 2026: The all-green month September reversed.
- Best TSP Allocation by Age: Benchmark mixes for each career stage.
- TSP L Fund Lifecycle Trap: What the glide path costs in a rate-spike year.
- G Fund vs. F Fund: Every Year Since 1988: The long-term trade-off between the two lower-risk funds.
Sources: TSP.gov rates of return (data dated September 30, 2026), U.S. Treasury daily par yield curve rates, FedSmith (October 1, 2026), GovExec (October 2026).