First Quarter Milestone, Model Funds Outperformed Peer Median in Worst Quarterly Market Since 2002
April 30, 2008
WASHINGTON, DC, April 25, 2008 – ICMA-RC reported today that all eight of its target-date Vantagepoint Milestone4 Funds outperformed their Morningstar peer medians in the first quarter of 2008, and for the one- and three-year periods ending March 31, 2008, with each ranking among the top third of its peers for the one-year period. All of the target-risk Vantagepoint Model Portfolio4 Funds except All-Equity Growth4 Fund also outperformed their peer medians in the first quarter, and all outperformed their peer medians for the year. The results came as U.S. stocks posted their worst quarterly decline since 2002, with losses across all reported market capitalization sizes, and with both growth and value styles losing ground in the quarter.
“Historically, markets have repeatedly cycled through periods of strong performance, followed by volatile down markets. The past year has been a difficult market for both equities and at least some sectors of the fixed income markets,” said Wayne Wicker, ICMA-RC’s Chief Investment Officer. “Vantagepoint funds seek to capture gains for investors in bull markets while, as the performance of the Model Portfolio Funds and Milestone Funds has reflected, striving to protect those market gains in volatile and down markets.”
In other first quarter 2008 highlights:
- The All-Equity Growth Fund4 was ranked slightly below its peer median for the first quarter 2008, but has beaten its peer median for the one-, three- and five-year periods. It ranks in the top fifth of its peer group for three- and five-year periods.
- The International Fund3 beat its Morningstar peer median for the quarter, as well as the one- and three-year periods.
- The Low Duration Bond and Inflation Protected Securities Funds outpaced their peer medians for the quarter and the year ended March 31, 2008. Both funds ranked in top third for these periods.
| Morningstar Rankings as of March 31, 2008 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Name | Morningstar Category | Category Rank | Category Size | ||||||
| 3 Mo | 1 Yr | 3 Yr | 5 Yr | 3 Mo | 1 Yr | 3 Yr | 5 Yr | ||
| Vantagepoint Low Duration Bond Fund | Short-Term Bond | 29 | 31 | 35 | 14 | 471 | 459 | 383 | 291 |
| Vantagepoint Core Bond Index Fund, Class I | Intermediate-Term Bond | 18 | 16 | 18 | 37 | 1178 | 1118 | 974 | 830 |
| Vantagepoint Core Bond Index Fund, Class II | Intermediate-Term Bond | 17 | 15 | 12 | 25 | 1178 | 1118 | 974 | 830 |
| Vantagepoint Inflation Protected Securities Fund | Inflation-Protected Bond | 31 | 33 | 12 | 95 | 167 | 157 | 111 | 56 |
| Vantagepoint Milestone Retirement Income Fund | Target-Date 2000-2014 | 13 | 12 | 41 | 314 | 286 | 129 | ||
| Vantagepoint Milestone 2010 Fund | Target-Date 2000-2014 | 32 | 20 | 14 | 314 | 286 | 129 | ||
| Vantagepoint Milestone 2015 Fund | Target-Date 2015-2029 | 17 | 9 | 27 | 432 | 343 | 118 | ||
| Vantagepoint Milestone 2020 Fund | Target-Date 2015-2029 | 25 | 19 | 18 | 432 | 343 | 118 | ||
| Vantagepoint Milestone 2025 Fund | Target-Date 2015-2029 | 46 | 30 | 13 | 432 | 343 | 118 | ||
| Vantagepoint Milestone 2030 Fund | Target-Date 2030+ | 9 | 12 | 20 | 618 | 470 | 152 | ||
| Vantagepoint Milestone 2035 Fund | Target-Date 2030+ | 28 | 15 | 16 | 618 | 470 | 152 | ||
| Vantagepoint Milestone 2040 Fund | Target-Date 2030+ | 35 | 21 | 19 | 618 | 470 | 152 | ||
| Vantagepoint Model Portfolio Savings Oriented Fund | Conservative Allocation | 13 | 7 | 32 | 59 | 709 | 627 | 407 | 265 |
| Vantagepoint Model Portfolio Conservative Growth Fund | Conservative Allocation | 44 | 29 | 22 | 25 | 709 | 627 | 407 | 265 |
| Vantagepoint Model Portfolio Traditional Growth Fund | Moderate Allocation | 24 | 25 | 32 | 41 | 1251 | 1145 | 905 | 712 |
| Vantagepoint Model Portfolio Long-Term Growth Fund | Large Blend | 9 | 20 | 21 | 34 | 2219 | 2124 | 1664 | 1314 |
| Vantagepoint Model Portfolio All-Equity Growth Fund | Large Blend | 57 | 37 | 19 | 13 | 2219 | 2124 | 1664 | 1314 |
| Vantagepoint Asset Allocation Fund | Moderate Allocation | 97 | 76 | 45 | 20 | 1251 | 1145 | 905 | 712 |
| Vantagepoint Equity Income Fund | Large Value | 50 | 41 | 44 | 19 | 1520 | 1437 | 1174 | 926 |
| Vantagepoint 500 Stock Index Fund, Class I | Large Blend | 52 | 52 | 53 | 53 | 2219 | 2124 | 1664 | 1314 |
| Vantagepoint 500 Stock Index Fund, Class II | Large Blend | 47 | 47 | 47 | 48 | 2219 | 2124 | 1664 | 1314 |
| Vantagepoint Growth & Income Fund | Large Blend | 66 | 54 | 53 | 55 | 2219 | 2124 | 1664 | 1314 |
| Vantagepoint Broad Market Index Fund, Class I | Large Blend | 39 | 60 | 36 | 29 | 2219 | 2124 | 1664 | 1314 |
| Vantagepoint Broad Market Index Fund, Class II | Large Blend | 38 | 57 | 33 | 26 | 2219 | 2124 | 1664 | 1314 |
| Vantagepoint Growth Fund | Large Growth | 33 | 52 | 48 | 65 | 1883 | 1755 | 1442 | 1207 |
| Vantagepoint Mid/Small Company Index Fund, Class I | Mid-Cap Blend | 52 | 46 | 25 | 25 | 533 | 507 | 424 | 338 |
| Vantagepoint Mid/Small Company Index Fund, Class II | Mid-Cap Blend | 51 | 45 | 23 | 23 | 533 | 507 | 424 | 338 |
| Vantagepoint Aggressive Opportunities Fund | Mid-Cap Growth | 52 | 87 | 66 | 25 | 1033 | 972 | 827 | 694 |
| Vantagepoint Overseas Equity Index Fund, Class I | Foreign Large Blend | 28 | 67 | 61 | 39 | 836 | 747 | 557 | 459 |
| Vantagepoint Overseas Equity Index Fund, Class II | Foreign Large Blend | 28 | 66 | 58 | 35 | 836 | 747 | 557 | 459 |
| Vantagepoint International Fund | Foreign Large Blend | 30 | 47 | 47 | 51 | 836 | 747 | 557 | 459 |
The percentile rank 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.
Behind the Numberes
The S&P 500 Index dropped 9.45 percent in the quarter, with all sectors showing negative performance. The Dow Jones Industrial Average (“Dow”) fell 7.00 percent and the NASDAQ dropped 13.88 percent. This was the poorest quarterly performance for those three market indexes since the third quarter of 2002 when the market was subject to the dot-com bust, the impact of the 9/11 terror attacks and a recession. In that quarter, the S&P 500 Index and the Dow dropped almost 18 percent and the NASDAQ lost almost 20 percent.
For the 1st quarter 2008, security markets — fixed and equity, foreign and domestic — reflected the combined effects of the continuing flight to quality, U.S.-led liquidity constraints, fears of a U.S. recession, and inflation remaining above Federal Reserve targets.
Fixed income markets responded to declining Treasury rates, a flight to quality, and inflation risk concerns with returns that varied considerably between fixed income market sectors. For example, based on Lehman Brothers indexes, the U.S. Treasury sector gained 4.43 percent for the quarter, while the High Yield sector lost 3.02 percent in the quarter.
Foreign markets declined for the quarter. Developed markets as represented by the MSCI EAFE Index dropped 8.82 percent. After years of outperformance, emerging markets as represented by the MSCI Emerging Market Index underperformed developed markets and the S&P 500 Index, decreasing 10.92 percent.
ICMA-RC is an independent not-for-profit firm focused on providing retirement plans and related services for over 800,000 state and local employees. Our emphasis is on providing the best services, investment options, tools and educational materials to help public employees build retirement security. The corporation, established in 1972, offers 457 deferred compensation and 401 defined contribution plans, as well as an IRA, and other retirement-related products exclusively to state and local government employees. For more information visit www.icmarc.org.
Please consult 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 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.
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 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.
3Foreign investments are subject to more risks not associated with domestic investments (i.e. currency, economy and political risks.)
4Please be advised that with “Fund of Funds” arrangements, additional underlying fees may apply. Please consult the prospectus for details.