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 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. Past performance does not guarantee 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 1-800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240, or by visiting www.icmarc.org. Please consult both the current Vantagepoint Funds prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights and investment objectives, risks and performance information prior to investing any money. Vantagepoint securities are distributed by ICMA-RC Services LLC, a broker dealer affiliate of ICMA-RC, member NASD/SIPC. For a current prospectus, contact ICMA-RC Services LLC, 777 North Capitol Street NE, Washington, DC 20002-4240. 1-800-669-7400.