Sector Rotation in Action
Chart of the Week for August 18-24, 2000
As most investors know, the first quarter of 2000 looked very much 1999. Growth stocks, particularly technology, continued to race ahead, leaving less popular sectors in the dust. We’ve seen that trend end and the market broaden out since the middle of March.
In the first quarter, just two sectors—technology and utilities—produced higher returns than the overall S&P 500 Index. Looking at data through August 17, however, we see that seven out of 11 S&P sectors are beating the Index for the year to date. This is due in large part to the resurgence of the value style of investing, which rewards investment in stable, cash-generating companies.
This evolution in the market was not unexpected, but has certainly been unwelcome for investors who put all their eggs in a growth basket, expecting 1999’s extraordinary performance to continue. Investors in the Vantagepoint Funds should rest easy, because the multi-management approach used to construct the fundsincorporates multiple investment styles into a single fund. This makes the Vantagepoint Funds far less susceptible to shifts in style favor. Even though the market has been shaky this year, all Vantagepoint domestic equity funds are in positive territory and performing strongly relative to benchmarks and peers.
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.
Please consult 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 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. Please read the prospectus carefully before investing. All Vantagepoint Funds invested through 401 or 457 plans are held through VantageTrust. 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.