2nd Quarter Markets Review

Chart of the Week for July 7-13, 2006

Capital markets ended the second quarter 2006 with flat to negative returns over the period. Bonds as measured by the Lehman Brothers Aggregate Bond index were relatively flat, despite the Fed’s interest rate hikes. While bond returns are negative year-to-date, longer term performance, e.g., 5-year results, are close to long-term averages and have generally exceeded US equity returns. US equities represented by the S&P 500 index (larger capitalization stocks) and the DJ Wilshire 5000 Composite index (broad stock market) produced negative returns following a strong first quarter. Year-to-date results remain positive and three-year annualized results are close to long-term averages. International equity markets performed more favorably, with only a modest negative return in the second quarter as measured by the MSCI EAFE index. The positive results over longer time periods continue to reflect strong economy overseas coupled with a weaker US dollar over the trailing 5 years.

Short-term fluctuations amongst the various markets are normal and difficult to predict which asset class will reward investors the most in any given period. Therefore, investors should diversify among different types of investment options offered in their retirement plan in order to minimize the impact of short-term market risk.

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.