Active Management Has Added Value This Year

Chart of the Week for July 16-22, 1999

Investing internationally is one way to diversify your portfolio. Although international investments are risky, they can reduce overall portfolio risk when combined with domestic equities. That’s because they don’t move in tandem with domestic stocks. Different factors affect U.S. and international stocks— factors like currency movements, relative economic growth, and national politics and policies. As a result, returns for domestic and international stocks are not perfectly correlated. Risk reduction stems from the imperfect correlation.

ICMA-RC offers two international options. The Overseas Equity Index Fund tracks the MSCI Europe, Australia, and Far East (EAFE) Index of larger stocks in developed countries, which is pictured in blue on the chart below. The EAFE Index has returned 5.7% year-to-date through July 14. The International Fund, pictured in red, is actively managed and seeks to provide a higher return than that of the EAFE Index. So far in 1999, active management has paid off: the International Fund has a higher return than the EAFE Index.

* This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. 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.