The ‘C’ in C Fund stands for ‘Concentration Risk’

Now that we’ve established this, lets look at today’s composition of the S&P 500, represented in TSP by the large company ‘C’ Fund.The top seven companies make up almost 30 percent of the S&P 500 / C Fund:

1. Microsoft (MSFT) – 6.74%
2. Apple (AAPL) – 6.17%
3. Nvidia (NVDA) – 6.00%
4. Amazon (AMZN) – 3.73%
5. Meta (META) – 2.74%
6. Broadcom (AVGO) – 2.01%
7. Berkshire Hathaway (BRK.B) – 1.99%

It gets worse. Google/Alphabet is split up in to ‘A’ and ‘B’ Class shares. Put these together and Alphabet/Google makes up more than 3.3 percent of the S&P / C Fund, leapfrogging Google/Alphabet in to the number 5 spot:

• Alphabet Class A (GOOGL) – 1.85%
• Alphabet Class C (GOOG) – 1.51%

So, right now you’ve got 33 percent of your ‘C’ Fund in 8 companies… The S&P 500 is essentially the “S&P Five”. They’re all good companies right now, but things could change.

The ‘C’ in C Fund stands for ‘Concentration Risk’

Need some recent examples?

• Remember what happened to nVidia stock during the early 2025 news about China’s DeepSeek AI product? It tanked more than 17 percent overnight.
• Also, Apple just announced it expects Google to re-evaluate the $20 Billion per year it pays Apple to make Google Search the default search engine on iPhones. People are shifting over their search preferences from Google to AI-based products like ChatGPT or Microsoft CoPilot. In fact, Google searches on Apple devices dropped for the first time on record last month.
  • $20 Billion per year is a LOT of revenue to lose, even for Apple and Google.

So, what should you do in your TSP or 401k?

Consider diluting your concentrated positions in the “S&P Five” by adding some of the “I” Fund to your portfolio. You can do this on your own, or use a Target Date Fund like a TSP Lifecycle fund to spread-out your holdings. You could even use the TSP Mutual Fund Window and pick out some low-cost Utility, REIT, or Value index funds to try and dilute your positions in the “S&P Five”.