Information on Bear Stearns
April 2, 2008
Most mutual funds are managed to diversify their investment portfolio by holding a range of stocks, bonds and other financial instruments consistent with policies described in the fund prospectus. Funds use diversification seeking to reduce risk by investing in stocks and bonds issued by a number of different companies and government entities. In addition to diversifying by security issuer, some funds diversify based on additional criteria, such as market sectors, industries, geographic region, or market capitalization. The Vantagepoint Funds provide an additional layer of diversification by hiring multiple investment managers believed to have complementary investment approaches, where appropriate, to select the securities held by the Funds.
Diversification of a fund’s holdings may help mitigate the risk of significant loss in a fund’s net asset value in the event of a dramatic decline in the price of a small number of securities held by the fund. Such a decline recently occurred when the market price of Bear Stearns securities fell. Similar unexpected events have occurred in the past, and, if history is any indication, will happen in the future. The goal of an active investment manager is to identify such potential crises ahead of the market, or, where that is not possible, for investment diversification to minimize the impact to the investor.
Several Vantagepoint Funds held securities issued by Bear Stearns, and the dramatic drop in their value is likely to affect the net asset value per share of these Funds, commensurate with the size of the Funds’ holdings in the company.[1] Specifically, as of February 29, 2008, Vantagepoint Funds held securities in Bear Stearns in approximately the proportions shown below:
| Vantagepoint Equity Income Fund | 0.4% of Fund Assets |
| Vantagepoint Asset Allocation Fund | 0.1% of Fund Assets |
| Vantagepoint 500 Stock Index Fund | 0.1% of Fund Assets |
| Vantagepoint Broad Market Index Fund | 0.1% of Fund Assets |
| Vantagepoint Inflation Protected Securities Fund | 0.1% of Fund Assets[(2),3] |
| Vantagepoint Core Bond Index Fund | 0.2% of Fund Assets |
In each instance the holdings represented less than 1% of the respective Vantagepoint Fund assets. For additional information on the holdings of the Vantagepoint Funds for February 29, 2008 click here.
In addition, as of February 29, 2008, Bear Stearns bonds represented 0.2% of assets held by the VantageTrust PLUS Fund.
[1] 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. Please consult both the current applicable prospectus or 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. 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. 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. Para asistencia en Español llame al 1-800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.
[2] Before May 1, 2007, the Inflation Protected Securities Fund was named the US Government Securities Fund and invested at least 80% of its assets in securities issued by the U.S. Treasury, U.S. Government agencies, and U.S. Government-sponsored enterprises, including mortgage-backed securities. This is no longer the case. Now the fund invests at least 80% of its net assets in inflation adjusted U.S. and non-U.S. debt securities. There is no assurance that the Fund will be able to achieve long-term investment results similar to those achieved prior to May 1, 2007.
[3] A rise/fall in the interest rates can have a significant impact on bond prices and the NAV (net asset value) of the fund. Funds that invest in bonds can lose their value as interest rates rise and an investor can lose principal.