Second Quarter Capital Market Returns

Chart of the Week for July 16-July 22, 2004

Capital markets ended the second quarter 2004 with little change over the period. The Lehman Brothers Aggregate Index representing bonds in the above chart showed a negative return, underperforming equities over both the quarter-end and the 1-year periods. But as you can see, bonds have outperformed both domestic and international equities over the long-term 3- and 5-year periods. International equities, represented by the MSCI EAFE Index in the chart, have outperformed domestic equities in all of the periods shown except for this quarter. The second quarter also saw the S&P 500, representing large company equities, outperform the Dow Jones Wilshire 5000 Total Market Index, also not seen in the 1-, 3- and 5-year periods.

* 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. The S&P 500 is an Index of 500 Stocks, a widely recognized, unmanaged index of common stock prices. The MSCI EAFE/Morgan Stanley East Asia Far East Index is composed of stocks screened for liquidity, cross-ownership, and industry representation and acts as a benchmark for managers of international stock portfolios. The Lehman Brothers Aggregate Bond Index represents securities that are US domestic, taxable, and dollar denominated. It covers the US investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.The Wilshire 5000 Equity Index measures the performance of U.S. equity securities and is used as an indicator of the broad trend in stock prices. Indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the active management of an actual open-ended investment company portfolio. 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.