Changes to Retirement Plan Asset Class Exposure Over Time

Chart of the Week for May 08 - May 14, 2009

The chart above shows that asset class-level exposure in retirement plans has generally shifted from equity to bond and cash investments over the past three years. “Cash” includes both money market and stable value investments. “Equity” includes large, medium, and small capitalization domestic investments, as well as international and emerging market investments. Exposure to other asset classes such as balanced funds, target-date funds, specialty funds, other hybrid funds, and company stock have been excluded.

The rate of change was especially dramatic during the last twelve months. In March 2008, the aggregate retirement plan exposure amongst these three asset classes was 55% equity, 7% bond, and 38% cash. In March 2009, the exposure had reversed to 37% equity, 9% bond, and 54% cash.

The data represented in the chart does not represent the entire U.S. retirement plan market. The universe is selected by Hewitt Associates LLC ("Hewitt") as a representative sample of large employers by industry, plan design, and investment offerings. Hewitt tracks and publishes the daily transfer activity of nearly 1.5 million 401(k) plan participants with nearly $90 billion in aggregate assets.

Market activity and individual participant behavior are both likely to have contributed to the exposure shift. The stock market collapse in the wake of the global credit crisis could have directly caused the equity exposure to decrease, assuming that accounts were not rebalanced. Participant risk aversion may also have increased as a result of the steep drop in stock prices, prompting a movement from equity to bonds and cash.

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. All Vantagepoint Funds invested through 401 or 457 plans are held through VantageTrust. 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.