Lifestyle Investing with the Vantagepoint Model Portfolio Funds

Lifestyle investing allows investors the opportunity to select one fully diversified fund that is designed to meet their individual time horizons and risk tolerances. This strategy can be accomplished through either the allocation of individual stocks, bonds and cash, or it can be done by combining existing mutual funds, creating a “fund of funds.” ICMA-RC uses the “fund of funds” approach to manage the Vantagepoint Model Portfolio Funds¹, offering investors a choice of five different investment options.

The Benefits Are Clear. The Model Portfolio Funds are designed to provide investors with a complete investment program. They allow investors to focus on what they know best: their goals, needs, and tolerance for risk. ICMA-RC does the rest: allocate assets, select investments, and rebalance the funds. Selecting an appropriate Model Portfolio Fund may be an appropriate investment choice for people who prefer to rely on experienced investment professionals to manage their investments.

A Personal Choice. Before you decide which Model Portfolio Fund might be right for you, you’ll need to evaluate your time horizon and your tolerance for risk. First, think about how long it will be until you’ll likely want to access your retirement assets. Second, think about how willing you are to withstand market volatility in your account. Historically, stocks have outperformed bonds over the long-term; however, a portfolio made up of all stocks may be more volatile than one of just bonds over shorter periods. Adding more stocks to your portfolio may increase your portfolio risk because the periodic returns of stocks tend to fluctuate more than those of bonds.

Choose One That Fits. Once you decide how much risk you are comfortable with and how long your time horizon is, select the Fund that’s right for you. By selecting a Model Portfolio Fund, you will be investing in a diversified portfolio — one of the foundations that has been successful for some long-term investors — while keeping your risk level in check.

Maintain Your Optimum Mix. Once you’ve decided which mix of assets might be best for your needs, you want to keep it that way. Over time, the equity portion of your account may grow more rapidly than the fixed income segment. As your asset allocation shifts, your account may take on additional and unwanted risk. This is called “portfolio drift” and regular rebalancing is the solution. The Model Portfolio Funds are periodically rebalanced, so you can rest assured that your account is consistently following its stated investment objectives. On October 30, 2007, a multi-strategy fund was added to all of the Model Portfolio Funds, except the All-Equity Growth Fund. The multi-strategy fund seeks to offer additional diversification beyond those investments in the fixed income and equity funds.

For more information on choosing a portfolio based upon your tolerance for risk, use our online Select the Right Retirement Portfolio for You guide to risk tolerance, or browse the “Determining Your Investment Portfolio” section in our Select the Right Retirement Portfolio for You guide to risk tolerance, or browse the “Determining Your Investment Portfolio” section in our Charting Your Course (813K) print publication.

¹Please be advised that with “Fund of Funds” arrangements, additional underlying fees may apply. Please consult the prospectus for details.

¹Please be advised that with “Fund of Funds” arrangements, additional underlying fees may apply. Please consult the prospectus for details.