3rd Quarter Market Review

Chart of the Week for October 6-12, 2006

Capital markets finished the third quarter of 2006 with positive results. Bonds as measured by the Lehman Brothers Aggregate Bond index rose 3.81%, mainly due to the Fed’s pause of interest rate hikes. Despite the negative performance of fixed income during the first half of 2006, the bond market’s reversal in the 3rd quarter resulted in a one-year return of 3.67%. U.S. equities as represented by the S&P 500 index (larger capitalization stocks) and the DJ Wilshire 5000 index (broad stock market) also produced solid returns following a weak second quarter. International equities as measured by the MSCI EAFE Index trailed behind U.S. equities over the quarter, but continue to exhibit more favorable performance over the one-year period.

Short-term fluctuations throughout the various markets are typical, and it is difficult to predict which asset class will reward investors the most over any given period. Therefore, investors should diversify among different types of investment options 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. The 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. AC:1006-1027.