Fixed Income Sector Performance (as of 6/30/10)

Chart of the Week for July 30 - August 5, 2010

Returns for individual sectors within the fixed income market can vary, sometimes widely from each other and when compared to the fixed income market as a whole. A sector may outperform over an extended period and then underperform in subsequent periods. The chart above illustrates the performance of eleven fixed income sectors for the twelve months ended June 30, 2009 and the twelve months ended June 30, 2010.

In contrast to the equity market, which dropped in 2007 and 2008 before rebounding in 2009, the fixed income market generally posted positive returns during the past three years. For the twelve months ended June 30, 2009, the only fixed income sector illustrated above to experience negative returns was high yield (-2.4%). High yield bonds are generally more economically sensitive, experience more volatility, and are higher risk than other bonds. As investor appetite for riskier assets increased in 2009, high yield bonds posted the highest return of the sectors above during the twelve months ended June 30, 2010.

All eleven fixed income sectors posted positive returns during the twelve months ended June 30, 2010. Those sectors associated with riskier investments, such as high yield, emerging markets, and long-term bonds had the highest returns. This is different from their performance ended June 30, 2009, where the riskier investments posted the lowest returns.

Clearly, performance fluctuates over time and returns depend upon the market environment, which is hard to predict. Investors should note that even U.S. government securities can decline in value and investing in sectors such as high yield or emerging market bonds involve additional risk. Investors should consider their time horizon, investment objectives, and risk tolerance when making investment decisions.

This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. 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.

Investment information can change rapidly and the changes can be significant particularly in volatile markets. For this reason “as of”’ dates are provided for specific data where applicable. The information should not be considered current after the dates provided.

Please read both the current applicable prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights, investment objectives, risks and performance information. Investing in mutual funds and other investment vehicles involves risk, including possible loss of the amount invested. Investors should carefully consider the Fund's investment objectives, risks, charges and expenses before investing or sending money. The prospectus contains this and other information about the investment company. The Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC. For a current prospectus, contact ICMA-RC Services, LLC.

The performance data quoted represents past performance. Past performance is no guarantee of 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 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.