As Expected...

Chart of the Week for July 2-July 8, 2004

As expected, the Federal Open Market Committee (FOMC) raised the target overnight interest rate 0.25% to 1.25% this week. This rate represents the rate that banks use to lend money to each other. A lesser known target rate is also determined by the FOMC, called the Discount rate. This week, the FOMC also raised this rate by 0.25% to 2.25%. While the Fed Funds rate is the rate at which banks lend money to each other, the Discount rate is the rate at which the Federal Reserve will lend money to banks. The rates set by the FOMC are target rates and will fluctuate based on supply and demand of money. Banks, in turn, will use the Discount rate to set their individual prime rates. The prime rate is one of several base rates used by banks to lend money to individuals.

* This illustration was compiled by information provided by Bloomberg L.P., which is an information services, news and media company serving customers around the world. Bloomberg L.P. is not affiliated with the ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. The ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing. Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 1-800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240, or by visiting www.icmarc.org. Please consult both the current Vantagepoint Funds prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights and investment objectives, risks and performance information prior to investing any money. Vantagepoint securities are distributed by ICMA-RC Services LLC, a broker dealer affiliate of ICMA-RC, member NASD/SIPC. For a current prospectus, contact ICMA-RC Services LLC, 777 North Capitol Street NE, Washington, DC 20002-4240. 1-800-669-7400.