Vantagepoint Model Portfolio, Milestone Funds Outperformed Peers as Growth Stocks Trumped Value in 2007

April 1, 2008

Washington, DC, Jan. 22, 2008 –Vantagepoint Model Portfolio funds and Vantagepoint Milestone funds outperformed their peers in 2007, the ICMA-RC fund family reported today. In addition, Milestone Funds, completing three years of performance history on Dec. 31, 2007, outperformed peers for both one and three year periods.*

The five Vantagepoint Model Portfolio Funds vary by risk level and therefore return potential as a way to offer investors a consistent risk-return profile. Investors in the eight Milestone funds choose investment portfolios based on the time remaining before they plan to retire. The portfolios are reallocated, or “aged”, to reduce risk as the investor approaches retirement.

Both Fund groups are fund-of-funds, composed of mutual funds selected by Vantagepoint Investment Advisors. Together, the Fund groups offer investors planning for retirement the opportunity for asset growth while reducing volatility in keeping with parent company ICMA-RC’s mission to build retirement security for public sector workers.

“Beating our peers highlights the effectiveness of our multi-manager investment strategy and demonstrates our dedication to offering portfolios that can weather the ups and downs of the financial markets,” said Wayne Wicker, senior vice president and chief investment officer of ICMA-RC, which is the sponsor of Vantagepoint Funds.

Looking Behind the Numbers

Vantagepoint Funds’ outstanding performance in 2007 came within the larger context of financial markets experiencing increased volatility, a slowing economy and tighter credit. Such shifts typically bring about new market leadership, Wicker noted. “We saw growth stocks strongly outperform value stocks in 2007,” he said. “The market’s preference for small cap stocks changed, too.”

As a result, large cap U.S. growth stocks turned in the best sector performance as measured by the Russell 1000 Growth Index, rising 11.81 percent even as U.S. small-capitalization value equities, measured by the Russell 2000 Value Index, fell 9.78 percent. That was a reversal of small caps leading performance in 2006, when the segment grew 23.48 percent.

By the fourth quarter, all stock categories were posting losses. At the same time, fixed income markets, especially high quality U.S. Government securities, were reporting gains as investors fled to quality.

Still a positive year Despite the market’s up and down record in 2007, the S&P 500 Index delivered positive returns of 5.49 percent in what was the fifth consecutive year of gain.

Bonds, too, held onto gains, as the Lehman Brothers U.S. Aggregate Bond Index kept an even longer record going as it delivered positive returns for the eighth consecutive year, up 6.96 percent.

International markets, measured by the Morgan Stanley Capital International (MSCI) Europe Australasia Far East (EAFE) Index, posted the fifth consecutive year of positive returns. However, that return was lower than in any of the previous four years.

A shift in Fed strategy Turmoil in the subprime mortgage market and concerns that weakness could spread to other risk based assets prompted the Federal Reserve to reduce interest rates three times in 2007, [and again on January 22, 2008, lowering the bellwether Fed Funds Rate to 3.50 percent], beginning with a 0.50 percent cut in September. The Fed Funds rate had been held at 5.25 percent since mid 2006 as the Federal Reserve worked to dampen the risks of inflation without pushing the economy into recession.

Other recession risks were also evident in softening in employment numbers and downward trending manufacturing activity, which fell for the sixth month in a row in December. Corporate earnings growth declined in the third quarter and showed signs of further weakening in the fourth quarter.

The dollar remained weak, though that helped boost exports. And the housing sector continued to decline.

“This is a time of uncertainty in the market, to be sure,” Wicker said. “But it is also a good point at which to remember that it is time in the market, not market timing, that leads to long-term investment success.”

*Fund Morningstar rank information:

Vantagepoint Model Portfolio Funds	Morningstar Category	Total Ret Cat % Rank 1 Yr	# Cat 1 Yr	Total Ret Cat % Rank 5 Yr	# Cat 5 Yr
Vantagepoint Savings Oriented	US OE Conservative Allocation	26	609	69	239
Vantagepoint Conservative Growth	US OE Conservative Allocation	18	609	33	239
Vantagepoint Traditional Growth	US OE Moderate Allocation	35	1,103	46	698
Vantagepoint Long-Term Growth	US OE Large Blend	30	2,090	44	1,278
Vantagepoint All-Equity Growth	US OE Large Blend	29	2,090	16	1,278

Vantagepoint Milestone Funds	Morningstar Category	Total Ret Cat % Rank 1 Yr	# Cat 1 Yr	Total Ret Cat % Rank 3 Yr	# Cat 3 Yr
Vantagepoint Milestone Retirement Income	US OE Target-Date 2000-2014	33	266	45	131
Vantagepoint Milestone 2010	US OE Target-Date 2000-2014	24	266	18	131
Vantagepoint Milestone 2015	US OE Target-Date 2015-2029	42	303	43	113
Vantagepoint Milestone 2020	US OE Target-Date 2015-2029	37	303	25	113
Vantagepoint Milestone 2025	US OE Target-Date 2015-2029	36	303	12	113
Vantagepoint Milestone 2030	US OE Target-Date 2030+	43	409	42	152
Vantagepoint Milestone 2035	US OE Target-Date 2030+	40	409	33	152
Vantagepoint Milestone 2040	US OE Target-Date 2030+	41	409	31	152

The percentile ranking is based on Total Return relative to all funds in the same Morningstar category. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1. Past performance is no guarantee of future results.

Please consult the current applicable prospectus 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, ICMA-RC, or any of its affiliates call 1-800-669-7400 (TDD: 1-800-669-7471) or write to 777 North Capitol Street, NE, Washington, DC 20002-4240. You may also visit us on the Web at www.icmarc.org. Para asistencia en Español llame al 1-800-669-8216.