Low Risk Doesn’t Have to Mean Low Return

Chart of the Week for May 24-31, 2002

Declining interest rates are good for those looking to buy a home or car, but not so good for conservative investors. Returns on money market mutual funds fell steadily last year and may rise only gradually this year. That possibility has some money market investors looking for higher yielding, but still safe, alternatives. Stable value funds may be worth considering. Though they are structured differently from money market funds, they offer similar safety and liquidity, and right now, have the added attraction of higher yields. Presently, the spread between yields on 5-Year Treasuries (a proxy for stable value yields) and 90-Day T-Bills (a proxy for money market yields) is approaching 3%.

ICMA-RC has two stable value funds— the VantageTrust PLUS Fund (for non-IRA’s) and the Vantagepoint Income Preservation Fund (for IRA’s). Investors in the Vantagepoint Money Market Fund may transfer directly into either stable value fund (depending on the type of account), but should be aware they may not transfer directly back into the Vantagepoint Money Market Fund. Please speak with one of our Investor Service Associates if you would like more information. They can be reached by calling 1-800-669-7400.

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.