VANTAGEPOINT FUNDS, 497, 1999-03-05

VANTAGEPOINT FUNDS
497, 1999-03-05

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<PAGE> 1

THE VANTAGEPOINT FUNDS
PROSPECTUS

MARCH 1, 1999

The Vantagepoint Funds is a no-load diversified open-end management investment
company. The Vantagepoint Funds operates as a "series" investment company
offering thirteen distinct investment portfolios (the "Funds"), each Fund having
different investment objectives. The Index Funds offer two classes of shares,
Class I and Class II. The other Funds offer a single class of shares.

This prospectus gives you information about the Vantagepoint Funds that you
should know before investing. You should read this prospectus carefully and
retain it for future reference. It contains important information, including how
each Fund invests and the services available to shareholders.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

[VANTAGEPOINT FUNDS LOGO]

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TABLE OF CONTENTS
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<TABLE>
<S> <C>
SUMMARY 1
The Funds 1

FEE TABLES 5

INVESTMENT OBJECTIVES AND POLICIES 8

RISKS OF INVESTING IN THE FUNDS 17
Investment Limitations 18

MANAGEMENT OF THE FUNDS 18
Directors and Officers 19

SHAREHOLDER INFORMATION 21
Share Accounting for All Funds 21
Valuation of Funds 21
Reinvestment of Earnings 21
Pricing and Timing of Transactions 21
Reporting to Investors 22

PURCHASES, EXCHANGES AND REDEMPTIONS 22
Purchases 22
Purchases by Employee Benefit Plans 22
Exchanges and Allocations Among
Funds 23
Exchanges by Telephone 23
VantageLine 23
VantageLink 23
Purchases by IRA Investors 24

TAXATION 24

YEAR 2000 COMPLIANCE 25
</TABLE>

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SUMMARY
- --------------------------------------------------------------------------------

A summary of the investment objectives, principal investment strategies
(including the types of securities held in each Fund) and principal risks of
investing in the Funds is set forth below.

Common Risks--The first six Funds listed in the following section and the first
four Index Funds listed on pages 3 and 4 invest primarily in common stocks, and
are subject to all of the general market risks of investing in the stock market.
Stock markets tend to move in cycles with periods of rising prices and periods
of falling prices. General market risk is discussed in greater detail on page
17. To the extent that a particular Fund is managed according to a specific
style (e.g., the Growth Fund), it is subject to the risk that other investment
styles may outperform its style. Each Index Fund is also subject to the risk
that it will deviate from the performance of its benchmark, which is known as
tracking error. To varying degrees, all of the Funds entail the risk that an
investor may lose money.

THE FUNDS
- --------------------------------------------------------------------------------

AGGRESSIVE OPPORTUNITIES FUND

Investment Objective--To offer high long-term capital growth.

Principal Investment Strategy--To invest primarily in common stocks of small- to
medium-capitalization companies. Strategies pursued by the Fund's subadvisers
include:

- investing in emerging growth companies
- identifying companies expected to exhibit high earnings growth
- investing in stocks believed to be undervalued.

Principal Risks--The returns on stocks of small- to medium-capitalization
companies tend to be more volatile at times than the returns on stocks of
larger-capitalization companies because of factors such as less certain
prospects for the growth of smaller companies and a lower degree of liquidity in
the markets for such stocks.

INTERNATIONAL FUND

Investment Objective--To offer long-term capital growth and diversification by
country.

Principal Investment Strategy--To invest primarily in the common stocks of
companies headquartered outside of the United States. The Fund will invest at
least 65% of its assets in foreign equity securities. The Fund may also invest a
portion of its assets (35% or less) in bonds and domestic stocks. Strategies
pursued by the Fund's subadvisers include:

- investing primarily in stock of companies headquartered in developed
countries
- investing in companies of all capitalization sizes
- investing in companies in a wide variety of industries
- investing in companies with above-average market earnings growth
potential
- investing in stocks believed to be undervalued.

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Principal Risks--The Fund is subject to the special risks of international
investing. These include: accounting and financial reporting standards that may
differ from those used in the U.S.; less supervision of stock exchanges and
brokers; the risk of foreign currency values changing relative to the U.S.
dollar; and the risk that political events or financial problems will weaken a
particular country's economy. Additionally, the Fund may invest in
less-developed markets where these risks can be more substantial.

GROWTH FUND

Investment Objective--To offer long-term capital growth.

Principal Strategy--To invest primarily in common stocks that are considered to
have above-average potential for growth. Strategies pursued by the Fund's
subadvisers include:

- investing primarily in common stocks of medium- to large-capitalization
companies
- selecting stocks of companies with long-term growth characteristics
- investing in stocks included in the S&P BARRA MidCap 400 Growth Index

Principal Risk--The Fund's growth stock investment strategy may expose it to a
greater degree of price and earnings volatility over shorter time periods than
the stock market as a whole.

GROWTH & INCOME FUND

Investment Objective--To offer long-term capital growth and current income.

Principal Investment Strategy--To invest primarily in common stocks that offer
the potential for capital appreciation and current income. Strategies pursued by
the Fund's subadvisers include:

- focusing on large-capitalization companies whose stocks offer potential
for price appreciation because of undervaluation, earnings growth or both
- emphasizing stocks which may pay dividends.

Principal Risks--The Fund is subject to all of the general risks of investing in
the stock market, notably the risk of price and earnings volatility over the
short-term.

EQUITY INCOME FUND

Investment Objective--To offer long-term capital growth with consistency derived
from dividend yield.

Principal Investment Strategy--To invest primarily in dividend-paying common
stocks of well established companies. Strategies pursued by the Fund's
subadvisers include:

- investing in common stocks of companies that pay dividends at a
relatively high level.
- a general focus on large-capitalization companies.

Principal Risks--While investment in the Fund involves risk, the Fund's emphasis
on income should result in less volatility than is associated with other types
of common stock funds over the long-term. As a result of the Fund's income
focus, certain industry sectors and/or specific industries may be emphasized. As
such, the Fund may exhibit greater sensitivity to certain economic factors
(e.g., changing interest rates) than the general stock market.

ASSET ALLOCATION FUND

Investment Objective--The Fund's investment objective is to offer long-term
capital growth at a lower level of risk than an all equity portfolio.

Principal Investment Strategy--To invest in a portfolio actively allocated among
common stocks, U.S. Treasury securities, and money market instruments. Under
normal circumstances the Fund will invest 45% to 85% of its assets in common
stocks. The remainder of the Fund's assets will be invested in U.S. Treasury
obligations and money market instruments. Strategies pursued by the subadvisers
focus on:

- approximating the general market return of each asset class
- allocating the stock portion of the Fund to a portfolio designed to
approximate the performance of the S&P 500 Index

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Principal Risks--The Fund is particularly subject to manager risk--the risk that
the allocation strategy of the subadvisers will fail to meet the Fund's
objectives.

U.S. TREASURY SECURITIES FUND

Investment Objective--To offer current income.

Principal Investment Strategy--Strategies pursued by the Fund's subadviser
include:

- investing at least 65% of the Fund's assets in intermediate-term U.S.
Treasury Securities.
- investing up to 35% of the Fund's assets in undervalued U.S. Treasury
Securities and/or U.S. government agency mortgage pass-through
securities.

Principal Risks--As with any bond fund, the market prices of the securities held
in the portfolio fluctuate as interest rates change. Generally, the value of a
bond moves in a direction opposite to that of interest rates, and the greater
the maturity of the bond, the greater the resulting change in value. The U.S.
Treasury Securities Fund will experience the volatility of an intermediate-
term (3-7 years) bond fund. The portion of the Fund's assets invested in
mortgage pass-through securities may expose it to pre-payment risk, which is the
risk that, in an environment of falling interest rates, mortgages will be paid
off early. This requires the Fund to invest the proceeds of such repayments in
lower-yielding instruments.

MONEY MARKET FUND

Investment Objective--To seek maximum current income, consistent with
maintaining liquidity and a stable share price of $1.00.

Principal Investment Strategy--To invest all of its assets in the Short-Term
Investments Co. Liquid Assets Portfolio, which invests in high-quality,
short-term money market instruments. The Portfolio's adviser is AIM Advisors,
Inc.

Principal Risk--An investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
the Fund seeks to preserve the value of your investment at $1.00 per share, it
is possible to lose money by investing in the Fund.

OVERSEAS EQUITY INDEX FUND

Investment Objective--To offer long-term capital growth and diversification by
approximating the performance of the Morgan Stanley Capital International
Europe, Australia, and Far East Free (EAFE Free) Index.

Principal Investment Strategy--To invest in a sampling of securities that is
selected and weighted to result in investment characteristics comparable to the
index and performance that will correlate with the performance of the index.

Principal Risks--The Fund is subject to the risks of investing internationally,
as described for the International Fund.

MID/SMALL COMPANY INDEX FUND

Investment Objective--To offer long-term capital growth by approximating the
performance of the Wilshire 4500 Index.

Principal Risks--The returns on stocks of mid-to small-capitalization companies
tend to be more volatile than the returns on stocks of larger-capitalization
companies.

BROAD MARKET INDEX FUND

Investment Objective--To offer long-term capital growth by approximating the
performance of the Wilshire 5000 Index.

Principal Investment Strategy--To invest in a sampling of securities that are
selected and weighted to result in investment characteristics comparable to the
index and performance that will correlate with the performance of the index.

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Principal Risks--The Fund is expected to have the same volatility as the U.S.
stock market as a whole. Additionally, the Wilshire 5000 Index includes smaller
capitalization companies whose stocks tend to have more price volatility than
those of larger companies.

500 STOCK INDEX FUND

Investment Objective--To offer long-term capital growth by approximating the
performance of the Standard and Poor's (S&P) 500 Index.

Principal Investment Strategy--To invest in all of the stocks in the S&P 500
Index, weighted to correlate to the investment characteristics of the index.

Principal Risks--The Fund is expected to have the same volatility as the U.S.
stock market as measured by the S&P 500 Index.

CORE BOND INDEX FUND

Investment Objective--To offer current income by approximating the performance
of the Lehman Brothers Government/Corporate Bond Index.

Principal Investment Strategy--To invest in a sampling of bonds that is selected
and weighted to result in investment characteristics comparable to the index and
performance that will correlate with the performance of the index.

Principal Risks--As with any bond fund, the market prices of the securities held
in the portfolio will fluctuate as INTEREST RATES change. Generally, the value
of a bond moves in a direction opposite to that of interest rates, and the
greater the maturity of the bond, the greater the resulting change in value. The
Fund should experience the volatility characteristics of an
intermediate-maturity fixed income fund. The average maturity of bonds in the
index is expected to range from eight to twelve years and the average credit
quality is Aaa.

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FEE TABLES
- --------------------------------------------------------------------------------

FEES AND EXPENSES OF THE FUNDS

The purpose of the following tables is to assist you in understanding the
various costs that you, as a shareholder, will bear directly or indirectly in
connection with an investment in one or more of the Vantagepoint Funds.

As you can see in the following table, you do not pay transaction fees of any
kind when you buy, sell, or exchange your shares.

SHAREHOLDER TRANSACTION EXPENSES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)

<TABLE>
<S> <C>
MAXIMUM SALES CHARGE (LOAD) IMPOSED
ON PURCHASES NONE
MAXIMUM DEFERRED SALES CHARGE
(LOAD) NONE
MAXIMUM SALES CHARGE (LOAD) IMPOSED
ON REINVESTED DIVIDENDS (AND
OTHER DISTRIBUTIONS) NONE
REDEMPTION FEE NONE
EXCHANGE FEE NONE
</TABLE>

The next table shows the annual operating expenses you would pay as a
shareholder in the Funds. These expenses, calculated as a percentage of average
net assets, are deducted from Fund assets, and their effect is factored into any
quoted share price or investment return.

5
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ANNUAL FUND OPERATING EXPENSES
(Deducted From Fund Assets)

<TABLE>
<CAPTION>
Advisory Subadviser Other Total
Funds Fee Expense Expenses+ Expenses
----- -------- ---------- --------- --------
<S> <C> <C> <C> <C>
Aggressive Opportunities 0.10% 0.75% 0.42% 1.27%
International 0.10% 0.53% 0.49% 1.12%
Growth 0.10% 0.28% 0.39% 0.77%
Growth & Income 0.10% 0.42% 0.40% 0.92%
Equity Income 0.10% 0.17% 0.39% 0.66%
Asset Allocation 0.10% 0.29% 0.38% 0.77%
U.S. Treasury Securities 0.10% 0.12% 0.37% 0.59%
Money Market 0.10% 0.08% 0.42% 0.60%*

Overseas Equity Index
- ---------------------
CLASS I 0.05% 0.18% 0.65% 0.88%
CLASS II ** 0.05% 0.18% 0.45% 0.68%

Mid/Small Co. Index++
- ---------------------
CLASS I 0.13% N/A 0.48% 0.61%
CLASS II ** 0.13% N/A 0.28% 0.41%

Broad Market Index++
- --------------------
CLASS I 0.12% N/A 0.34% 0.46%
CLASS II ** 0.12% N/A 0.14% 0.26%

500 Stock Index++
- -----------------
CLASS I 0.10% N/A 0.35% 0.45%
CLASS II ** 0.10% N/A 0.15% 0.25%

Core Bond Index++
- -----------------
CLASS I 0.13% N/A 0.34% 0.47%
CLASS II ** 0.13% N/A 0.14% 0.27%
</TABLE>

+ Amounts shown are based on estimated amounts for the Fund's first full
fiscal year.
++ Includes fees and other expenses incurred at the Master Portfolio level as a
result of the Index Funds being "feeder" funds investing in Master
Portfolios.
* For the Money Market Fund, management has agreed, for a period of two years
from the effective date of registration, to waive any fees that would result
in total Fund expenses in excess of an annual amount of 0.55%. The amount
shown includes fees paid to the Fund's investment adviser, as well as fees
paid for the underlying Fund.
** Amounts shown are equivalent to the total expenses that will be paid by
Class II shareholders. Please see page 22 for the eligibility criteria for
Class II shares.

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EXAMPLE

This example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 dollars for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
Funds 1 yr 3 yrs
----- ---- -----
<S> <C> <C>
Aggressive Opportunities $130 $405
International $115 $358
Growth $ 79 $247
Growth & Income $ 94 $295
Equity Income $ 68 $212
Asset Allocation $ 79 $247
U.S. Treasury Securities $ 60 $190
Money Market $ 62 $193

Overseas Equity Index
- ---------------------
CLASS I $ 90 $282
CLASS II ** $ 70 $218

Mid/Small Co. Index
- -------------------
CLASS I $ 63 $196
CLASS II ** $ 42 $132

Broad Market Index
- ------------------
CLASS I $ 47 $148
CLASS II ** $ 27 $ 84

500 Stock Index
- ---------------
CLASS I $ 46 $145
CLASS II ** $ 26 $ 81

Core Bond Index
- ---------------
CLASS I $ 48 $151
CLASS II ** $ 28 $ 87
</TABLE>

** Amounts shown are equivalent to the total expenses that will be paid by Class
II shareholders. Please see page 22 for the eligibility criteria for Class II
shares.

If you are investing through another financial institution or a retirement
account, you may be subject to additional fees or expenses, such as plan
administration fees. For more information, please refer to the program materials
of that financial institution or retirement account for any special provisions,
additional service features, or fees and expenses that may apply to your
investment in a Fund.

7
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INVESTMENT POLICIES,
INVESTMENT OBJECTIVES,
PRINCIPAL INVESTMENT STRATEGIES,
AND RELATED RISKS
- --------------------------------------------------------------------------------

The Funds are managed by their investment adviser, Vantagepoint Investment
Advisers, LLC ("VIA"). VIA employs a "multi-management" strategy in which it
evaluates, selects, and monitors one or more subadvisers for certain Funds. VIA
shall supervise and direct each Fund's investments. With respect to the Index
Funds (other than the Overseas Equity Index Fund), VIA selects the Master
Portfolios in which each Index Fund invests.

A multi-management strategy seeks to improve consistency of return over time by
eliminating reliance on the results of a single subadviser. Therefore, where
advantageous, VIA allocates Fund assets among multiple subadvisers with distinct
and complementary investment strategies.

To construct a multi-managed Fund, VIA begins by identifying investment
strategies that are compatible with a Fund's objective. Next, VIA identifies
individual subadvisers who have demonstrated expertise in the consistent
execution of a specific investment strategy, and who complement the strategies
of other potential subadvisers. Selected subadvisers are then integrated within
a single Fund in weights that are expected to optimize return relative to risk.
Because each subadviser selects securities that reflect its specific investment
strategy, a multi-managed portfolio may be more diversified than any individual
subadviser's portfolio.

INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------------------------

The Funds have adopted certain investment policies and limitations. Those
designated as "fundamental" in this prospectus or in the Statement of Additional
Information cannot be changed without shareholder approval. Others may be
changed at the discretion of the Board of Directors.

The descriptions that follow are designed to help you choose the Funds that best
fit your investment objectives and tolerance for risk.

AGGRESSIVE OPPORTUNITIES FUND

General Description and Goals--The Aggressive Opportunities Fund seeks high
long-term growth of capital by investing primarily (at least 65%) in the common
stocks of small- to medium-capitalization U.S. and non-U.S. companies.

Investment Strategy--The Aggressive Opportunities Fund incorporates
complementary investment disciplines that provide exposure to a wide variety of
portfolio management approaches. Each subadviser employs a distinctive strategy
and focuses on securities reflecting that strategy.

The Fund invests in common stocks of companies with unique prospects for capital
appreciation. The Fund's investments may also include bonds. Instruments such as
futures contracts and options may be used occasionally for cash management
purposes, but will not be used for speculative purposes. The Fund will be
managed to limit concentration in the securities of any one issuer or industry.

Investment Risks--The Fund is subject to all of the general risks of investing
in the stock market. The Fund is also exposed to the added volatility of returns
for small- and medium-capitalization stocks as compared to the returns of
larger-capitalization stocks. The Fund can be expected to have significantly
greater volatility than the broad U.S. stock market (as measured by the S&P 500
Index) over any selected time period.

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<PAGE> 13

Investment Subadvisers--First Pacific Advisors: (Los Angeles, California) serves
as a subadviser to the Fund. Robert Rodriguez serves as the Fund's portfolio
manager. Mr. Rodriguez began his investment career in 1971, and joined First
Pacific Advisors as a portfolio manager in 1983. First Pacific Advisors invests
its portion of the Fund's assets in small- to medium-capitalization stocks and
seeks stocks that are out-of-favor with the market, often in undervalued
industries. The number of holdings tends to be concentrated.

Massachusetts Financial Services: (Boston, Massachusetts) serves as a subadviser
to the Fund. Brian Stack serves as the Fund's portfolio manager. Mr. Stack began
his investment career in 1983 and joined Massachusetts Financial Services (MFS)
as a portfolio manager in 1993. MFS invests its portion of the Fund's assets in
small-capitalization stocks and seeks to invest in emerging growth companies
that the subadviser believes have potential to become major enterprises. These
companies are often in their early stages in their development.

TCW Funds Management: (Los Angeles, California) serves as a subadviser to the
Fund. Douglas Foreman serves as the Fund's portfolio manager. Mr. Foreman began
his career as a portfolio manager in 1989 and assumed his present position with
TCW in 1994. This subadviser invests its portion of the Fund's assets in small-
to medium-capitalization stocks of companies expected to exhibit high earnings
growth, and employs techniques such as quantitative screening, research
evaluation, and direct company contact.

INTERNATIONAL FUND

General Description and Goals--The International Fund seeks long-term growth of
capital by investing primarily (at least 65%) in the common stocks companies
headquartered outside of the United States. Dividend income is incidental to the
overall objective.

Investment Strategy--The International Fund incorporates complementary
investment disciplines that provide exposure to a wide variety of portfolio
management approaches. Each subadviser employs a distinctive strategy and
focuses on securities reflecting that strategy.

The Fund invests primarily in common stocks of companies headquartered in
developed countries, including those in Europe, Asia, and the Far East. The Fund
may also invest, to a lesser extent, in less developed emerging markets in Asia,
Europe, Latin America, and Africa. In addition to common stocks, the Fund may
invest in other securities including stock index futures contracts, convertible
securities, currency futures, and investment grade bonds.

The Fund will be managed to limit concentration in the securities of any one
issuer or industry.

Investment Risks--The Fund is subject to all of the general risks of investing
in the stock market. The Fund is also exposed to the additional risks of
investing in foreign securities. These risks include loss due to political,
legal, regulatory, and operational uncertainty, as well as currency conversion
factors. These risks can be greater in emerging markets.

Investment Subadvisers--Capital Guardian Trust Company: (Los Angeles,
California), employs a multiple portfolio manager system in managing the
portfolio. Capital Guardian invests its portion of the Fund's assets in the
stocks of companies of any size that they believe have potential for growth that
is not recognized by the market.

Lazard Asset Management: (New York, New York), employs a team approach to
managing the portfolio. Lazard invests its portion of the Fund's assets
primarily in large-capitalization stocks and emphasizes a value approach that
seeks to identify certain characteristics of companies that it believes indicate
improving fundamentals.

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<PAGE> 14

Rowe Price-Fleming: (London, United Kingdom/ Baltimore, Maryland), employs a
team approach to managing the portfolio. Rowe Price invests its portion of the
Fund's assets primarily in medium-capitalization stocks and seeks companies with
above-average market earnings growth potential at a reasonable price.

A portion of the Fund's assets will be invested in the Overseas Equity Index
Fund, for which Barclays Global Fund Advisors ("Barclays") serves as subadviser.
The Overseas Equity Index seeks to approximate the performance and portfolio
characteristics of the Morgan Stanley Capital International Europe, Australia,
and Far East Free (EAFE Free) Index.

GROWTH FUND

General Description and Goals--The Growth Fund seeks long-term growth of capital
by investing primarily (at least 65% of its assets) in common stocks with
above-average potential for growth in corporate earnings.

Investment Strategy--The Growth Fund is designed to incorporate complementary
investment disciplines that provide exposure to a wide variety of portfolio
management approaches. Each subadviser employs a distinctive growth strategy and
focuses on securities reflecting that strategy.

The Fund invests primarily in common stocks of companies with prospects for
above-average growth in earnings, with emphasis on stocks of seasoned,
medium-and larger-capitalization growth firms. The Fund also includes
smaller-capitalization stocks. The Fund will be managed to limit concentration
in the securities of any one issuer or industry.

Investment Risks--The Fund is subject to all of the general risks of investing
in the stock market. Additionally, the Fund's growth stock investment strategy
may expose it to a greater degree of price and earnings volatility over shorter
time periods than the stock market as a whole. There may be periods of time over
which other styles of investing outperform the growth style of the Fund.

Investment Subadvisers--Barclays (San Francisco, California), uses an index
approach to managing its portion of the Fund's assets. Barclays seeks to
replicate the performance and portfolio characteristics of the S&P BARRA MidCap
Growth Index, which consists of that portion of the S&P 400 MidCap Index with
growth characteristics.

Cadence Capital Management (Boston, Massachusetts) serves as a subadviser to the
Fund. William B. Bannick serves as the Fund's portfolio manager. Mr. Bannick
began his investment career in 1984 and joined Cadence as a portfolio manager in
1992. Cadence invests its portion of the Fund's assets in medium- to
large-capitalization stocks of companies with long-term growth characteristics
selling at reasonable valuations in relation to the fundamental prospects of the
underlying companies.

Fidelity Management Trust Company (Boston, Massachusetts) serves as a subadviser
to the Fund. Kennedy P. Richardson, who began his investment career in 1978 and
joined Fidelity as a portfolio manager in 1985 manages a portion of the Fund
that focuses on the equity securities of smaller companies having valuations
close to or below those of the broad domestic equity market. Neal Miller, who
began his investment career in 1983 and joined Fidelity as a portfolio manager
in 1988, manages a portion of the Fund that focuses on stocks of
well-established, well-managed companies of all sizes whose earnings benefit
from emerging trends that are identified by Fidelity.

Neuberger & Berman, LLC (New York, New York), serves as a subadvisor to the
Fund. Jennifer K. Silver serves as the Fund's portfolio manager. Ms. Silver
began her career as a portfolio manager in 1981 and assumed her current position
with Neuberger & Berman in 1997. This subadviser invests its portion of the
Fund's assets in medium-capitalization stocks of companies that appear to offer
high long-term earnings-per-share growth at a reasonable price relative to their
growth rates.

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<PAGE> 15

William Blair & Company, LLC (Chicago, Illinois) serves as a subadviser to the
Fund. Robert Lanphier, IV serves as the Fund's portfolio manager. Mr. Lanphier
joined William Blair as a portfolio manager in 1987. Blair invests its portion
of the Fund's assets in medium to large capitalization stocks and seeks to
invest in durable companies exhibiting strong business leadership, quality
products and services, solid financial prospects, and strong management.

The Growth Fund can be expected to have significantly greater volatility than
the broad U.S. stock market (as measured by the S&P 500 Index) over any selected
time period.

GROWTH & INCOME FUND

General Description and Goals--The Growth & Income Fund seeks long-term capital
growth by investing primarily (at least 65 percent) in common stocks that offer
the potential for high total return through a combination of capital
appreciation and current income.

Investment Strategy--The Growth & Income Fund is designed to incorporate
complementary investment disciplines that provide exposure to a variety of
portfolio management approaches. Each subadviser employs a distinctive equity
income strategy and focuses on securities reflecting that strategy.

The Fund focuses on large-capitalization companies whose stocks offer good
potential for price appreciation because of undervaluation, earnings growth, or
both, with an emphasis on those which may provide current dividend income. The
Fund shall be managed to limit the concentration in the securities of any one
issuer or industry.

Investment Risks--The Fund is subject to all the general risks of investing in
the stock market and is expected to exhibit the risk characteristics of a common
stock portfolio.

Investment Subadvisers--Capital Guardian Trust Company: (Los Angeles, CA) serves
as a subadviser to the Fund and employs a multiple portfolio manager system in
managing the portfolio. This subadviser seeks to meet the Fund's objectives
using an approach that combines both value and growth orientations.

Putnam Investment Management: (Boston, MA) serves as a subadviser to the Fund.
Manuel Weiss Herrero serves as the Fund's portfolio manager. Mr. Weiss Herrero
began his investment career in 1987 when he joined Putnam as a portfolio
manager. This subadviser seeks the potential returns from growth stocks but with
reduced volatility through the use of risk control techniques.

EQUITY INCOME FUND

General Description and Goals--The Equity Income Fund seeks long-term, stable
growth of capital by investing primarily (at least 65 percent) in
dividend-paying, common stocks of well-established companies.

Investment Strategy--The Equity Income Fund incorporates complementary
investment disciplines that seek stocks that provide exposure to a variety of
portfolio management approaches. Each subadviser employs a distinctive strategy
and focuses on securities reflecting that strategy.

The Fund invests in the common stocks of companies that pay dividends at
relatively high levels. These yields may be indicative of attractive valuations
and investments that are undervalued relative to a stock's history and to the
overall U.S. stock market. The Fund may be diversified across all sizes of
companies but generally focuses on large-capitalization companies, which tend to
have the most stable long-term earnings and dividend-paying records.

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<PAGE> 16

Investment Risks--While investment in the Fund involves risks, the Fund's
emphasis on income should result in less volatility than is associated with
other types of common stock funds over the long-term. As a result of the Fund's
income focus, certain industry sectors and/or specific industries may be
emphasized. As such, the Fund may exhibit greater sensitivity to certain
economic factors (e.g., rising interest rates) than the general stock market.

Due to the Fund's emphasis on large-capitalization, dividend-paying companies,
the Fund's volatility level is expected to be equal to, or lower than that of
the S&P 500 Index.

Investment Subadvisers--Crawford Investment Counsel: (Atlanta, GA) serves as a
subadviser to the Fund. John Crawford, III serves as portfolio manager. Mr.
Crawford began his investment career in 1970 and established Crawford Investment
Counsel in 1980. This subadviser seeks consistent dividend growth by investing
primarily in the securities of companies that consistently raised their
dividends every year for the past ten years.

Newell Associates: (Palo Alto, CA) serves as a subadviser to the Fund. Roger
Newell serves as portfolio manager. Mr. Newell began his investment career in
1958 and established Newell Associates in 1986. This subadviser seeks to produce
high current income from common stocks. It invests in large, well-established
dividend-paying companies with a current yield at least 25% higher than the
Standard & Poor's Industrials.

ASSET ALLOCATION FUND

General Description and Goals--The Asset Allocation Fund seeks long-term growth
of capital at a lower level of risk than a portfolio consisting entirely of
common stocks. The Fund pursues this objective by allocating assets among
stocks, U.S. Treasury securities, and money market instruments in proportions
determined by the subadvisers based on projected returns and risks for each
asset class.

Investment Strategy--The Asset Allocation Fund is designed to incorporate
complementary tactical asset allocation strategies, in which overall exposure to
stocks, U.S. Treasury securities, and cash is varied according to perceived
changes in relative value among asset classes. These strategies are based on
systematic assessments of quantifiable criteria such as long-term expected asset
class returns, valuation measures, economic and monetary indicators, and
financial market conditions.

The primary responsibility of the Fund's subadvisers is to allocate assets among
stocks, U.S. Treasury securities, and cash; the subadvisers do not select
individual common stocks. Allocation among asset classes may change dramatically
over time, although typically will occur incrementally. The stock allocation is
passively managed in a portfolio designed to approximate the performance of the
S&P 500 Index; the Treasury allocation may be actively or passively managed; and
the money market allocation is actively managed. Stock and Treasury exposure may
be obtained or modified by using futures contracts.

Investment Risks--The Fund is subject to the general risks associated with stock
market investing, as well as to interest rate risk.

Investment Subadvisers--The Fund is managed by multiple subadvisers:

AVATAR Associates (New York, New York) serves as a subadviser to the Fund.
Edward S. Babbitt serves as the Fund's portfolio manager. Mr. Babbitt entered
the investment industry in 1970 and joined AVATAR as a portfolio manager in
1980. AVATAR actively allocates assets between stocks and money market
instruments. At any given time, 100% of assets may be allocated to stocks or to
money market instruments, although shifts more typically occur incrementally.

12
<PAGE> 17

Mellon Capital Management (San Francisco, California) serves as a subadviser to
the Fund. Thomas B. Hazuka serves as the Fund's portfolio manager. Mr. Hazuka
entered the investment industry in 1986 when he joined Mellon as a portfolio
manager. Mellon actively allocates assets among common stocks, long-term U.S.
Treasury obligations, and money market instruments. At any given time, 100% of
assets may be allocated to stocks, to Treasury securities, or to money market
instruments, although shifts more typically occur incrementally.

Wilshire Asset Management (Santa Monica, California) serves as a subadviser to
the Fund. Thomas D. Stevens serves as the Fund's portfolio manager. Mr. Stevens
entered the investment industry in 1980, when he joined Wilshire as a portfolio
manager. Wilshire passively manages the stock allocations of AVATAR and Mellon
in a portfolio that fully replicates the S&P 500 Index, with small
period-to-period variances.

Payden & Rygel Investment Counsel (Los Angeles, California) serves as a
subadviser to the Fund. Brian Matthews serves as the Fund's portfolio manager.
Mr. Matthews entered the investment industry in 1982 and joined Payden & Rygel
in 1985 as a portfolio manager. Payden & Rygel manages the money market
instrument allocations of AVATAR and Mellon, as well as cash underlying futures
positions.

Since AVATAR does not invest in bonds, the Fund's structure is biased to take
advantage of the long-term return potential of stocks. As a result, the Fund may
exhibit a level of price volatility and risk of loss more consistent with a
common stock portfolio than with a balanced portfolio, especially over the
shorter term.

U.S. Treasury Securities Fund--primary investment objective is to offer current
income obtainable from active management of intermediate-term U.S. Treasury
securities and certain U.S. Government and Agency securities. Capital growth is
a secondary objective.

The Fund is designed to offer a rate of return equivalent to intermediate-term
U.S. Treasury securities, while minimizing the possibility of default. Returns
will reflect both interest income and market price changes in the bonds held by
the Fund.

The U.S. Treasury Securities Fund invests primarily in intermediate-term U.S.
Treasury securities. In addition, the subadviser is authorized to invest up to
35 percent of the Fund in U.S. Government Agency pass-through mortgage-backed
securities. The Fund may also invest in U.S. Treasury note and bond futures
contracts to adjust duration exposure in response to anticipated interest rate
movements. The combination of fixed-income securities and futures maintains
fixed-income exposure comparable to that of a fully invested portfolio position.

The Fund's subadviser, Seix Investment Advisers, Inc., seeks to offer more
return than is available in a passively managed intermediate-term U.S. Treasury
index by identifying undervalued U.S. Treasury securities, and by allocating
assets to, and selecting securities in, the mortgage-backed sector. Christina
Seix serves as the Fund's portfolio manager. She founded the firm in 1991.

The Fund should experience the volatility characteristics of an
intermediate-duration bond fund.

Money Market Fund--primary investment objective is to obtain the maximum current
income, consistent with preservation of capital and liquidity, that is available
through investments in specified money market instruments. The Fund seeks to
maintain a constant net asset value per share of $1.00. However there is no
guarantee that it will be able to do so. The Fund will meet the diversification
and quality provisions of Rule 2a-7 under the Investment Company Act of 1940.

13
<PAGE> 18

The Fund seeks to obtain its investment objective by investing substantially all
of its assets in a registered money market mutual fund, the Short-Term
Investment Co. Liquid Assets Portfolio, whose investment adviser is AIM
Advisers, Inc. The underlying portfolio of the AIM Liquid Assets Fund consists
of certificates of deposit of major U.S. banks, prime commercial paper, high
quality short-term corporate obligations, and short-term U.S. government and
agency securities. The Fund has an average maturity of less than 90 days.

THE INDEX FUNDS

The five Index Funds described below follow an indexed or "passively managed"
approach to investing. This means that Barclays selects securities designed to
approximate the investment characteristics and performance of a specified
benchmark, such as the S&P 500 Index.(1)

Unlike an actively managed portfolio, an index fund does not rely on a portfolio
manager's ability to predict the performance of individual securities. An index
fund simply seeks to parallel the performance of its benchmark. Additionally,
index funds tend to have lower operating expenses than actively managed funds.

In order to take advantage of the economies of scale offered by a larger pool of
assets, each Index Fund (except the Overseas Equity Index Fund) is structured as
a "feeder" fund. A "feeder" fund seeks to achieve its investment objective by
investing its assets in a "Master Portfolio" managed by Barclays. Each Master
Portfolio invests substantially all of its assets in securities in accordance
with investment objectives, policies, and limitations that are substantially
similar to those of the applicable Index Fund. In other words, each Index Fund
(other than the Overseas Equity Fund) "feeds" shareholder investments into its
corresponding Master Portfolio.

The Broad Market Index Fund's Master Portfolio invests substantially all of its
assets in two other Master Portfolios of Barclays. One of these Master
Portfolios, in turn, invests substantially all of its assets in a representative
sample of stocks comprising the Wilshire 4500 Index. The other Master Portfolio,
in turn, invests substantially all of its assets in stocks comprising the S&P
500 Index (together, the "Underlying Portfolios"). The Master Portfolio's assets
will be invested in the Underlying Portfolios in proportions adjusted
periodically to maintain the capitalization range of the Wilshire 5000 Index.

Because it can be very expensive to buy and sell all of the securities in a
target benchmark, the Index Funds, with the exception of the 500 Stock Index
Fund, employ "sampling" techniques to approximate benchmark characteristics such
as capitalization and industry weight using fewer securities than contained in
the benchmark. Therefore, the performance of the Funds versus their respective
benchmarks can be expected to deviate more than that of Funds investing in all
of the securities contained in a benchmark.

The Overseas Equity Index Fund and the Master Portfolios maintain equity
exposure for cash balances by purchasing appropriate futures contracts. Futures
contracts are not used for leverage. The Overseas Equity Index Fund and the
Master Portfolios seek to remain fully invested at all times, without
significant cash balances.

Each Index Fund investing in a Master Portfolio reserves the right to change the
Master Portfolio in which it invests when the Board of Directors believes it is
in the best interests of the Fund's shareholders.

- ---------------

(1)McGraw-Hill, Inc. ("McGraw-Hill") and Wilshire Associates, Inc. ("Wilshire
Associates") do not sponsor any portfolios of the Funds, nor are they affiliated
in any way with the Funds. "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," and
"Standard & Poor's 500(R)" are trademarks of McGraw-Hill. "Wilshire 5000 Equity
Index(R)" and "Wilshire 4500 Equity Index(R)" and related marks are trademarks
of Wilshire Associates. None of the Funds are sponsored, endorsed, sold, or
promoted by these indices or their sponsors and neither the indices nor their
sponsors make any representation or warranty, express or implied, regarding the
advisability of investing in Funds.

14
<PAGE> 19

The Index Funds offer two classes of shares, Class I and Class II. Information
on your eligibility to invest in a particular class can be found under the
heading "Shareholder Information: Purchases."

OVERSEAS EQUITY INDEX FUND

General Description and Goals--The Overseas Equity Index Fund seeks long-term
growth of capital by investing in common stocks of companies domiciled outside
the United States. The goal is to provide a portfolio that approximates the
investment characteristics and performance of the Morgan Stanley Capital
International Europe, Australia, and Far East Free (EAFE Free) Index.

Investment Strategy--The Overseas Equity Index Fund will invest in a sampling of
securities contained in the EAFE Free Index.

Investment Risks--The Overseas Equity Index Fund is exposed to the risks of
investing in common stocks as well as the additional risks of investing in
foreign securities, which can be affected by currency, political, legal,
regulatory, and operational factors.

MID/SMALL COMPANY INDEX FUND

General Description and Goals--The Mid/ Small Company Index Fund seeks long-term
growth of capital by investing in common stocks of U.S. small- to
medium-capitalization companies. The goal is to provide a portfolio that
approximates the investment characteristics and performance of the Wilshire 4500
Index.

Investment Strategy--The Mid/Small Company Index Fund will invest in a Master
Portfolio that invests in a sampling of securities contained in the Wilshire
4500 Index.

Investment Risks--The Fund is exposed to the general risks of stock investing.
Additionally, the Wilshire 4500 Index includes smaller-capitalization companies
whose stocks tend to have more price volatility than those of larger companies.

BROAD MARKET INDEX FUND

General Description and Goals--The Broad Market Index Fund seeks long-term
growth of capital by investing in common stocks of U.S. companies across all
capitalization ranges. The goal is to provide a portfolio that approximates the
investment characteristics and performance of the Wilshire 5000 Index.

Investment Strategy--The Broad Market Index Fund will invest in a Master
Portfolio that invests in two other Master Portfolios of Barclays that invest in
a sampling of securities contained in the Wilshire 4500 Index and the S&P 500
Index, respectively, in order to approximate the performance of the Wilshire
5000 Index.

Investment Risks--The Broad Market Index Fund is exposed to the general risks of
stock investing. Additionally, the Wilshire 5000 Index includes
smaller-capitalization companies whose stocks tend to have more price volatility
than those of larger companies.

500 STOCK INDEX FUND

General Description and Goals--The 500 Stock Index Fund seeks long-term growth
of capital by investing in common stocks of larger-capitalization companies
traded on U.S. stock exchanges. The goal is to provide a portfolio that
approximates the investment characteristics and performance of the Standard &
Poor's 500 Index.

Investment Strategy--The 500 Stock Index Fund will invest in a Master Portfolio
that seeks to replicate the holdings of the Standard & Poor's 500 Index.

Investment Risks--The 500 Stock Index Fund is exposed to the general risks of
stock investing. The Fund is expected to have the same volatility as the U.S.
stock market, as measured by the 500 Stock Index.

15
<PAGE> 20

CORE BOND INDEX FUND

General Description and Goals--The Core Bond Index Fund seeks current income and
growth of capital by investing in U.S. government and corporate investment-grade
obligations. The goal is to provide a portfolio that approximates the investment
characteristics and performance of the Lehman Brothers Government/Corporate Bond
Index.

Investment Strategy--The Core Bond Index Fund will invest in a Master Portfolio
that invests in a sampling of securities contained in the Lehman Brothers
Government/Corporate Index.

Investment Risks--The Core Bond Index Fund is exposed to the general risks of
investing in bonds. The Fund experiences volatility similar to that of an
intermediate-term bond fund. The average maturity of the Fund is expected to
range from eight years to twelve years. Market prices of the securities held in
the portfolio, including government securities, will fluctuate as interest rates
change. Interest rate changes also could affect the duration of bonds held in
the portfolio. The Fund is also exposed to credit risk, which is the risk that
the issuer of a corporate bond included in the index will default on its
obligations. However, the average credit quality of the index is Aaa, which
means that the level of such credit risk is very low. Please see p. 17 for a
detailed discussion of credit risk.

16
<PAGE> 21

RISKS OF INVESTING IN THE FUNDS
- --------------------------------------------------------------------------------

The following is a description of one or more of the risks that you will face as
an investor in the Funds. It is important to keep in mind one of the main axioms
of investing: the higher the potential reward, the higher the risk of losing
money. The reverse is also generally true: the lower the potential reward, the
lower the risk.

Each of the Funds is exposed to one or more of the following types of risk:

I. STOCK MARKET RISK

Market risk is the possibility that stock prices overall will decline over short
or extended periods. Markets tend to move in cycles, with periods of rising
prices and periods of falling prices.

Although the U.S. stock market has risen substantially in recent years, this
trend is not indicative of the market's overall history.

To illustrate the volatility of the U.S. stock market, the following table shows
the best, worst and average total returns for the U.S. stock market over various
time periods as measured by the S&P 500 Index.

Average Annual U.S. Stock Market Returns
(1926-1997)

<TABLE>
<CAPTION>
1 year 5 years 10 years 20 years
------ ------- -------- --------
<S> <C> <C> <C> <C>
BEST 53.9% 23.9% 20.1% 16.9%
WORST -43.3 -12.5 -0.9 3.1

AVERAGE 13.0 10.5 10.9 10.9
</TABLE>

Keep in mind that the S&P 500 Index tracks mainly large-capitalization stocks.
Other groupings of stocks are likely to carry different degrees of volatility.
For example, small-capitalization stocks, as a group, have historically
exhibited greater short-term volatility than that of the S&P 500 Index. All of
the Funds except the Money Market Fund, the U.S. Treasury Securities Fund and
the Core Bond Index Fund are subject to some level of stock market risk.

Foreign securities are subject to the same market risks as U.S. securities, such
as general economic conditions and company and industry prospects. However,
foreign securities involve additional risk of loss due to political, economic,
legal, regulatory, operational and currency conversion and pricing factors
affecting investment in the securities of foreign businesses or governments.
These risk factors may be even more prevalent in emerging markets. Foreign
securities are also subject to the risks associated with the value of foreign
currencies. A decline in the value of foreign currency vs. the U.S. dollar
reduces the dollar value of securities denominated in that currency. The
International Fund and the Overseas Equity Index Fund are subject to these
risks. The Aggressive Growth, Growth, Growth & Income and Equity Income Funds
may invest a limited portion of their respective assets in foreign securities,
and would be subject to these risks to the extent of such investment.

II. BOND MARKET RISK

Bonds also experience market risk, which is primarily attributable to changes in
interest rates. The general rule is that if INTEREST RATES rise, bond prices
will fall. The reverse is also true: if interest rates fall, bond prices will
generally rise. These rules apply to government securities as well as to
corporate securities.

A bond with a longer MATURITY (or a bond fund with a longer average maturity)
will be more volatile than shorter term bonds. The U.S. Treasury Securities Fund
and the Core Bond Index Fund are both subject to this risk. Because of their
extreme short-term nature, money market instruments carry little market risk.

Bonds and bond funds are also exposed to CREDIT risk, which is the possibility
that the issuer of a bond will default on its obligation to pay interest and
principal. U.S. Treasury securities, which are backed by the full faith and
credit of the U.S. Government, have virtually no credit risk. Corporate bonds
rated Baa or above, such as some of the

17
<PAGE> 22

bonds held by the Core Bond Index Fund, are generally considered to carry medium
credit risk. Corporate bonds rated below Ba are considered to have significant
credit risk.

Of course, bonds with lower credit ratings generally pay a higher level of
income to investors.

III. OBJECTIVE/STYLE RISK

All of the Funds are subject, in varying degrees, to objective risk, which is
the possibility that returns from a specific type of security in which a Fund
invests or the investment style of one or more of a Fund's subadviser, or the
investment adviser to the Master Portfolios with respect to the Index Funds
(other than the Overseas Equity Index Fund) will trail the returns of the
overall market.

In the past, different types of securities have experienced cycles of
outperformance and underperformance in comparison to the market in general.
Therefore, if you invest in a fund with a specific objective, such as the Growth
Fund, you would be exposed to this risk.

IV. MANAGER RISK

Manager risk is the risk that one of the Funds' subadvisers will do a poor job
of selecting securities and thus fail to meet the Fund's objectives. With
respect to the Index Funds, there is a risk that Fund performance will deviate
from that of the index. As with any mutual fund, there can be no guarantee that
a particular Fund will achieve its objective.

INVESTMENT LIMITATIONS
- ----------------------------------------------------

Each Fund has adopted certain limitations designed to reduce its exposure to
specific situations. Some of these limitations are that a Fund will not:

(a) with respect to 75% (100% for the Money Market Fund) of the value of its
total assets, purchase the securities of any issuer (except obligations of
the United States government and its instrumentalities and securities of
other investment companies) if as a result the Fund would hold more than
10% of the outstanding voting securities of the issuer, or more than 5% of
the value of the Fund's total assets would be invested in the securities of
such issuer;

(b) invest more than 25% of its assets in any one industry (except for the Money
Market Fund or to the extent that the applicable benchmark for an Index Fund
does not meet this standard);

(c) borrow money except from banks for temporary or emergency purposes, and in
no event in excess of 15% of the market value of its total assets.

MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------

The investment adviser to the Vantagepoint Funds is VIA, whose offices are
located at 777 North Capitol Street NE, Suite 600, Washington, DC 20002-4240.
VIA provides its advisory services pursuant to an investment advisory agreement
with the Vantagepoint Funds. VIA is a wholly-owned subsidiary of the ICMA
Retirement Corporation (RC), which has been registered as an investment adviser
with the U.S. Securities and Exchange Commission since 1983. RC was established
as a not-for-profit organization in 1972 to assist state and local governments
and their agencies and instrumentalities in the establishment and maintenance of
deferred compensation and qualified retirement plans for the employees of such
public sector entities. RC's primary advisory client is the ICMA Retirement
Trust, which was formed to commingle and invest the assets of the retirement
plans administered by RC. VIA is a newly formed entity.

As investment adviser to the Funds, VIA continually monitors the performance of
the subadvisers. VIA supervises and directs each Fund's investments. With
respect to the Index Funds (other than the Overseas Equity Index Fund), VIA
selects the Master Portfolios in which each Index Fund invests. The Funds intend
to apply for an exemp-

18
<PAGE> 23

tive order from the SEC that will allow VIA to change subadvisers with the
approval of the Fund's Board of Directors and upon notice to shareholders.

Compensation for the investment management of the Funds is asset based, i.e, it
consists of an annual percentage fee calculated based on average assets under
management. The fee is paid out of Fund assets. The aggregate annual fees paid
to VIA and to subadvisers and to the investment adviser of the Master Portfolios
for advisory services are as follows:

<TABLE>
<CAPTION>
AGGREGATE ANNUAL
FUNDS ADVISORY FEE
----- ----------------
<S> <C>
Aggressive Opportunities 0.85%
International 0.63%
Growth 0.38%
Growth and Income 0.52%
Equity Income 0.27%
Asset Allocation 0.39%
U.S. Treasury Securities 0.22%
Money Market 0.18%
Overseas Equity Index 0.23%
Mid/Small Company Index 0.13%
Broad Market Index 0.12%
500 Stock Index 0.10%
Core Bond Index 0.13%
</TABLE>

The fees charged by each subadviser and the investment adviser of the Master
Portfolios can be found in the Statement of Additional Information under the
heading "Investment Advisory and Other Services".

The subadvisers are retained on behalf of the Funds by VIA, and day-to-day
discretionary responsibility for security selection and portfolio management
rests with the subadvisers. VIA supervises and directs each Fund's investments.
With respect to the Index Funds (other than the Overseas Equity Index Fund), VIA
selects the Master Portfolios in which each Index Fund invests. The
responsibility for overseeing subadvisers rests with VIA's Investment Division,
whose division head, Senior Vice President John Tobey, reports directly to
Girard Miller, CFA, President of VIA.

Mr. Miller has over 15 years of experience in investment management, 5 years as
Chief Executive Officer and President of RC. He holds a Political Economy degree
from the University of Washington, a Masters in Economics from Wayne State
University in Detroit, Michigan, and a Masters of Public Administration from
Syracuse University, and is a Chartered Financial Analyst.

Mr. Tobey began his investment career in 1969. He assumed his current position
with RC in January of 1998. From 1995 to 1998 Mr. Tobey served as President and
Chief Executive Officer of Investment Directions, Inc., and from 1986 to 1994 he
served as President of the Liberty Asset Management Company. He holds a BS
degree in Finance from San Diego State University and an MBA degree from the
Stanford Graduate School of Business.

The investment program and its performance are subject to overall supervision
and periodic review by the Funds' Board of Directors.

Further information on Fund subadvisers, including fees, can be found in the
Statement of Additional Information.

The Directors and Officers of the Vantagepoint Funds, together with information
as to present positions and their principal business occupations during the last
five years, are shown below. Directors who are deemed to be "interested
persons", as defined in the Investment Company Act of 1940, are indicated by an
asterisk. The mailing address for the Directors and Officers of the Funds is 777
North Capitol St., NE, Ste. 600, Washington, D.C. 20002-4240.

DIRECTORS AND OFFICERS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS POSITION DURING PAST 5 YEARS
------------- ---------- -----------------------------------------
<S> <C> <C>
George Bissell Director Chairman of Board
Boston, MA Keystone Group Funds
Donna Anderson Director Chief Investment Officer
New York, NY City of New York Pensions
</TABLE>

19
<PAGE> 24

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS
NAME, ADDRESS POSITION DURING PAST 5 YEARS
------------- ---------- -----------------------------------------
<S> <C> <C>
Robert A. Bowman Director President, Chief Operating Officer and
Westport, CT Director (1995-1998)
Chief Financial Officer (1992-1995)
ITT Corporation
N. Anthony Calhoun Director Deputy Executive Director and
Chevy Chase, MD Chief Financial Officer
Pension Benefit Guaranty Assoc.
Arthur Lynch Director Director of Finance
Glendale, AZ City of Glendale, Arizona
Eddie Moore Director President, Virginia State University
Petersburg, VA
Robin L. Wiessmann Director* Principal
Yardley, PA Artemis Capital Group, Inc.
Girard Miller President* President and Chief Executive Officer
Washington, DC ICMA Retirement Corporation
Paul Breault Treasurer* Chief Financial Officer (1998 to present)
Washington, DC ICMA Retirement Corporation
Formerly; Senior Vice President and
Retail Group Chief Financial Officer
Fidelity Investments
Paul Gallagher Secretary* General Counsel (1998-present)
Washington, DC ICMA Retirement Corporation;
Formerly; Principal and Assistant General
Counsel,
The Vanguard Group
</TABLE>

* Ms. Wiessmann is considered an interested person because she is a member of
the Board of Directors of the ICMA Retirement Corporation. Officers of the
Funds are considered interested persons as defined in the Investment Company
Act of 1940.

20
<PAGE> 25

SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------

(For purposes of the following discussion, unless noted otherwise, "business
day" means the period(s) of time on any given day during which the New York
Stock Exchange is open for business. Unless noted otherwise, "close of business"
means 4:00 p.m. Eastern time on each business day or the final close of business
on any business day during which trading on the New York Stock Exchange is
suspended.)

SHARE ACCOUNTING FOR ALL FUNDS
- ----------------------------------------------------

The shares represent a dollar-weighted proportional ownership interest in each
of the Funds in which you are invested. The Funds do not issue share
certificates.

The price of a share is known as its net asset value ("NAV"). The daily NAV of a
share is determined at the close of each business day by adding the value of all
of a Fund's investments, plus cash and other assets, deducting liabilities, and
then dividing the result by the number of outstanding shares in the Fund as of
the end of the prior day and rounding the results to the nearest cent. The value
of your investment position equals the number of shares you own multiplied by
the current day's NAV.

Since share values (except for the Money Market Fund) and investment returns
will fluctuate, an exchange or redemption at any given time will normally result
in your receiving more or less than the original cost of your investment. Each
Fund's share value can be found daily in the mutual fund listing of most major
newspapers under the heading "Vantagepoint Funds".

VALUATION OF THE FUNDS
- ----------------------------------------------------

Investment securities held by the Funds are valued daily. Stocks are valued at
the price in effect at the close of business of the exchange on which they are
traded. Bonds are valued using pricing matrices obtained through Merrill Lynch
and other commercial pricing services.

Securities for which market quotations are not readily available are valued
according to methods established by the Board of Directors that are believed to
reflect fair value. If values of foreign securities have been materially
affected by events occurring after the close of a foreign market, foreign
securities may be valued by another method that the Board of Directors believes
reflects fair value.

The underlying Master Portfolio for each Index Fund (except the Overseas Equity
Index Fund) is valued daily by the Master Portfolio itself, and the Master
Portfolio's NAV is part of the calculation of each Index Fund's NAV. Once the
market value of each Index Fund is determined, it is then divided by the number
of shares outstanding to arrive at that day's NAV for the Fund.

For the Money Market Fund, net asset value is calculated by valuing portfolio
securities by reference to the Fund's acquisition cost as adjusted for
amortization of premium or accretion of discount, rather than by reference to
their value based on current market factors. This valuation method generally
ignores fluctuations in the market price of the Fund's debt securities and
assumes a steady increase (decrease) in value until maturity.

REINVESTMENT OF EARNINGS
- ----------------------------------------------------

All earnings of the Funds (interest, dividend income, and capital gains) are
reinvested in the Funds and used to purchase additional shares.

PRICING AND TIMING OF TRANSACTIONS
- ----------------------------------------------------

Purchases, exchanges and redemptions are executed at the NAV next calculated
after the Fund or its transfer agent receives the transaction request. For
example, under normal circumstances, a transaction request received at 9:30 a.m.
on a business day is executed at the same price as that of a transaction request
received at 3:00 p.m. -- at that day's closing price. If the Funds receive a
transaction request in the morning, you do not insulate

21
<PAGE> 26

yourself from market gains or losses during the rest of the business day. A
transaction request received after the calculation of the NAV on one day will be
executed at the price in effect at the close of the next business day.
Transaction requests by facsimile must be received by 12 noon to receive that
day's NAV.

REPORTING TO INVESTORS
- ----------------------------------------------------

With respect to any investment transaction reports you may receive from
Vantagepoint Funds, review these reports carefully, and call the toll-free
customer service line at 1-800-669-7400 or contact the Funds on-line at
[email protected]. immediately if you see any discrepancies. In order
to correct a discrepancy, the Funds must be notified within 120 days of the
close of the calendar quarter in which the discrepancy occurs.

PURCHASES, EXCHANGES, AND REDEMPTIONS
- --------------------------------------------------------------------------------

PURCHASES
- ----------------------------------------------------

Initially, the Funds will be open for investment exclusively by (i) the ICMA
Retirement Trust; (ii) the employee benefit plans of state and local governments
and their agencies and instrumentalities (including retirement and deferred
compensation plans established under Sections 401 and 457, respectively, of the
Internal Revenue Code of 1986, as amended); and (iii) Individual Retirement
Accounts ("IRAs") of employees of state and local governments and the IRAs of
other persons having a familial or otherwise close relationship to those public
sector employees. The details of such eligibility criteria are set forth in the
account application.

Class I shares of the Index Funds are open to IRA and other individual accounts
and each public sector employee benefit plan that invests indirectly in the
Funds through the ICMA Retirement Trust containing assets of less than $40
million. Class II shares are open to (i) qualifying public sector employee
benefit plans that invest directly in the Funds and have qualifying assets in
excess of $125 million; and (ii) public sector employee benefit plans that
invest indirectly in the Funds through the ICMA Retirement Trust and have
qualifying assets in excess of $40 million so invested. Other plans with average
account balances or other features that are expected to afford the Index Funds
with certain economies of scale in servicing employee benefit plan participant
accounts, may also qualify for Class II shares.

There are no minimum investment amounts, front-end sales charges, deferred sales
charges, back-end sales or redemption charges associated with investment in the
Vantagepoint Funds.

The Vantagepoint Funds reserve the right in their sole discretion to (i) suspend
the offering of their shares or (ii) to reject purchase orders when in the
judgment of management such rejection is in the best interest of a particular
Fund or Funds.

PURCHASES BY EMPLOYEE
BENEFIT PLANS
- ----------------------------------------------------

Employee benefit plans must fill out a retirement plan account form that is to
be signed by the plan's trustee or other authorized official.

Investors may submit purchase orders to the Funds as often as daily. Payments
may be transmitted by check, wire, and Automated Clearing House, although it is
preferred that the Funds receive assets by wire. Investment detail must be
submitted on paper forms, diskette, magnetic tape, or electronically.

Purchase orders received in good order prior to next calculation of the NAV (or
12 noon with respect to fax instructions) are posted to investor accounts at the
closing NAV of that day, or if the day the contributions are received is not a
business day, at the closing NAV of the next business day. Purchase orders
received in good order after close

22
<PAGE> 27

of business are posted at the closing NAV of the next business day.

With respect to purchases made through the ICMA Retirement Trust, or by certain
employee benefit plans and other types of omnibus accounts, other arrangements
may be negotiated as to the timing and delivery of purchase instructions.

Posting of contributions to investor accounts is contingent upon submission of
purchase orders in good order to the Vantagepoint Funds. This means that the
requests must be accompanied by sufficient detail to enable the Vantagepoint
Funds to allocate assets properly. If a purchase request is not received in good
order, the deposit is held in a non-interest bearing account until all necessary
information is received. If the purchase request is still not in good order
after three business days, the assets are returned to the investor. Purchases
received for unidentified accounts for which no account form has been received
will be returned to the investor.

EXCHANGES AND ALLOCATIONS
AMONG FUNDS
- ----------------------------------------------------

Investors may submit exchange requests daily in writing or by telephone
exclusively through the VantageLine phone system at 1-800-669-7400. Remember
that an exchange is a two-part transaction-a redemption of shares in one Fund
and a purchase of shares in another Fund.

Exchange requests received in good order prior to close of business on the New
York Stock Exchange (normally 4:00 p.m. Eastern Time), or 12 noon for fax
instructions, on a business day are posted to investor accounts at that day's
closing NAV. Exchange requests received in good order after close of business
will be posted at the closing NAV of the next business day.

The allocation of new purchase amounts among the Funds may be changed by
investors without charge or limitation.

Written confirmations are normally sent to Investors on the business day
following the day the transaction occurs. Investors should verify the accuracy
of information in confirmations immediately upon receipt.

EXCHANGES BY TELEPHONE
- ----------------------------------------------------

Investors may make daily exchanges through VantageLine, the Funds' automated
service line by calling 1-800-669-7400. Instructions received through
VantageLine must be accompanied by a Personal Identification Number. In
addition, verbal instructions given to a telephone representative will be
accepted upon verification of your identity and will be tape recorded to permit
verification. Written confirmations are normally sent to investors on the
business day following the day the transactions occur. Investors should verify
the accuracy of information in confirmations immediately upon receipt. See
"VantageLine" below for more information.

VANTAGELINE
- ----------------------------------------------------

The Funds maintain VantageLine, an automated service line for the benefit of
Investors who have access to touch-tone telephones. You may use VantageLine to
make exchanges among Funds and change your investment allocation. The phone
number is 1-800-669-7400.

VantageLine is normally available 24 hours a day, seven days a week for your
convenience; however, service availability is not guaranteed. Neither the Funds,
the Funds' investment adviser nor the Funds' transfer agent will be responsible
for any loss (or foregone gain) you may experience as a result of the service
being unavailable or inoperative.

Should the VantageLine service or the "800" number become unavailable,
transactions may be made by VantageLink, as described below, or by express mail
at the shareholders' expense (see back cover for the Fund's address).

VANTAGELINK
- ----------------------------------------------------

The Funds maintain VantageLink, a home page on the Internet. The address is
http://www.icmarc.org.

23
<PAGE> 28

Information available from the Internet includes account balances (which
requires a special password), investment allocations, and investment
performance. You may also execute transactions or make changes in your
investment allocation via VantageLink. The transfer agent for the Funds will
require that instructions received over the Internet be accompanied by a
Personal Identification Number. Written confirmations will normally be sent on
the business day after the transaction occurs. You should verify the accuracy of
information in confirmations immediately upon receipt.

VantageLink is normally available 24 hours a day, seven days a week. However,
service availability is not guaranteed. Like other Internet-based services,
VantageLink may be subject to external transmission problems that are beyond the
control of the Funds' management. Accordingly, neither the Funds, the Funds'
investment adviser, nor the Funds' transfer agent will be responsible for any
loss (or foregone gain) you may incur as a result of service being unavailable
or delayed.

PURCHASES BY IRA INVESTORS
- ----------------------------------------------------

PAYROLL DEDUCTION IRAS

Purchases made through payroll deduction of IRA contributions will be handled
the same as purchases made by employee benefit plans, but will require a
separate account form. Timing of investment, exchanges, and available services
will be the same as those for employee benefit plans. See "Purchases by Employee
Benefit Plans."

NON-PAYROLL DEDUCTION IRAS

First time IRA investors must fill out an IRA account application and mail it to
the Funds along with a check. Please call 1-800-669-7400 for assistance when you
are establishing a non-payroll deduction IRA account. Timing of investment,
exchanges, and available services will be the same as those for employee benefit
plans. See "Purchases by Employee Benefit Plans."

REDEMPTIONS

Shares may be redeemed at any time, subject to certain restrictions imposed by
the Internal Revenue Code on the timing of distributions under tax-favored
employee benefit plans and IRAs. If investment in the Funds has been made
through one or more of these plans, please call 1-800-669-7400 regarding these
restrictions. With the exception of redemptions that are made to effect
exchanges among the Vantagepoint Funds, redemption requests must be in writing.

REDEEMING SHARES IN WRITING

Write a letter of instruction with:

* Name of retirement plan, if applicable

* If a non-payroll IRA, your name and address

* The Fund's name

* Your Fund account number

* The dollar amount or number of shares to be redeemed

* How assets are to be distributed (by mail or by wire)

* If funds are to be distributed by wire, wire instructions.

A signature guarantee may be required, at the Funds' discretion, for certain
redemptions.

TAXATION
- --------------------------------------------------------------------------------

The Vantagepoint Funds intend to elect to be treated and to qualify each year as
a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended. A regulated investment company generally is not subject to
federal income tax on income and gains distributed in a timely manner to its
shareholders. The Fund intends to distribute capital gains annually. The Money
Market, Core Bond Index and U.S. Treasury Funds will distribute dividends

24
<PAGE> 29

monthly, and all of the remaining Funds will distribute dividends annually.

Normally, distributions to shareholders are taxable as income or capital gains
when such income and gains are distributed to them. However, shareholders who
invest in the Funds through section 401 plans, section 457 plans or IRAs, will
have earnings reinvested. If that is the case, the income is not taxable in the
year in which it is earned.

YEAR 2000 COMPLIANCE
- --------------------------------------------------------------------------------

Time and space saving programming decisions made by computer programmers in the
1960's have resulted in two-digit computer codes that recognize "00" as "1900",
not "2000". Such computers must be reprogrammed to prevent this error and make
them "Year 2000 compliant." VIA and its affiliated entities have successfully
completed a conversion to a new core recordkeeping system that is Year 2000
compliant. A number of the other systems employed by the Vantagepoint Funds have
been developed within the past few years and are already Year 2000 compliant.
The Funds and VIA are also working with vendors to make any changes to the
systems necessary to achieve full Year 2000 compliance. There can be no
assurance of success in this regard. Additionally, because Year 2000 issues
affect virtually all organizations, the companies or entities in which the Funds
invest also could be adversely impacted by Year 2000 issues. The extent of such
impact cannot be predicted.

25
<PAGE> 30

Other information, including the
Statement of Additional Information
can be reviewed and copied at the
Securities and Exchange Commission's
Public Reference Room in Washington,
D.C. For information on the operation
of the public reference room, call
1-800-SEC-0330.

The Securities and Exchange Commission
maintains a Web site
(http://www.sec.gov) that contains the
Statement of Additional Information
and other related information. Copies
of this information may be obtained,
upon payment of a duplicating fee, by
writing the Public Reference Section
of the SEC, Washington, D.C. 20549-
6009.

The Statement of Additional
Information is incorporated in this
prospectus by reference -- it is
legally a part of this prospectus.
Detailed information on the investment
adviser and each subadviser for the
Vantagepoint Funds may be found in
this prospectus and in the Statement
of Additional Information.

Mutual fund shares are not guaranteed
or insured by the FDIC or any other
agency of the U.S. government.

Investment Company Act file numbers:
811-08941; 333-60789

[RECYCLE LOGO]
THIS PROSPECTUS IS PRINTED ENTIRELY ON
RECYCLED PAPER.
<PAGE> 31
THE VANTAGEPOINT FUNDS

STATEMENT OF ADDITIONAL INFORMATION

MARCH 1, 1999

The Vantagepoint Funds is a no-load, diversified open-end management investment
company. The Vantagepoint Funds operates as a "series" investment company,
offering thirteen distinct investment portfolios (the "Funds"), each Fund having
different investment objectives. This Statement of Additional Information
contains additional information about the Funds.

This Statement of Additional Information is not a prospectus. This Statement of
Additional Information is incorporated by reference into, and should be read in
conjunction with, the Funds' current prospectus, also dated March 1, 1999.
A copy of the prospectus may be obtained by writing to the Funds or calling
1-800-669-7400.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Description of the Fund and Its Investments and Risks ........ 1
Management of The Vantagepoint Funds ......................... 5
Control Persons and Principal Holders of Securities .......... 6
Investment Advisory and Other Services ....................... 6
Portfolio Transactions ....................................... 10
Capital Stock and Other Securities ........................... 11
Purchase, Redemption, and Pricing of Shares .................. 12
Taxation of the Fund.......................................... 12
Calculation of Performance Data .............................. 13
Legal Counsel, Independent Auditors, & Custodian.............. 13
Financial Statements ......................................... 14
</TABLE>

<PAGE> 32
DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS

GENERAL INFORMATION

The Vantagepoint Funds is a no-load, diversified open-end management investment
company organized as a Delaware business trust. The Vantagepoint Funds are
managed by Vantagepoint Investment Advisers, LLC ("VIA"), which in turn hires
and manages subadvisers who are responsible for the day-to-day management and
security selections for the Funds. VIA supervises and directs each Fund's
investments. With respect to the Index Funds (other than the Overseas Equity
Index Fund), VIA selects the Master Portfolios in which each Index Fund
invests. The Vantagepoint Funds are as follows:

<TABLE>
<S> <C>
Actively-Managed Funds: Aggressive Opportunities Fund
International Fund
Growth Fund
Growth & Income Fund
Equity Income Fund
Asset Allocation Fund
U.S. Treasury Securities Fund
Money Market Fund
Index Funds: Overseas Equity Index Fund
Mid/Small Company Index Fund
Broad Market Index Fund
500 Stock Index Fund
Core Bond Index Fund
</TABLE>

The following discussion of investment objectives and policies for the Funds
supplements the discussion of those objectives and policies that is set forth in
the prospectus.

INVESTMENT OBJECTIVES AND POLICIES

The policies and guidelines set forth below for each Fund have been adopted by
the Board of Directors of the Vantagepoint Funds to govern the management and
administration of each Fund by VIA. Those designated as fundamental in this
Statement of Additional Information and in the prospectus cannot be changed
without shareholder approval. Other policies and guidelines described below and
in the prospectus may be reviewed and revised at the discretion of the Board of
Directors. Each Fund's investment administration is under the supervision of
VIA, which is responsible for appointing and monitoring of subadvisers to handle
the day-to-day investment of assets assigned to them.

With the exception of the Money Market Fund the assets of each actively-managed
Fund are managed by one or more subadvisers. Subadvisers are retained to manage
a particular portion of each Fund under the terms of written investment
advisory contracts with VIA.

The Money Market Fund is invested in the Short Term Investment Co. Liquid
Assets Portfolio, a registered money market mutual fund. The mutual fund's
investment adviser is AIM Advisors. Inc.

As explained in the prospectus, and in greater detail on page 5, each Index
Fund (with the exception of the Overseas Equity Index Fund) is structured as a
"feeder" fund investing in a "Master Portfolio" which has substantially similar
investment objectives and strategies as the applicable Index Fund. The
investment adviser for each "Master Portfolio" in which the corresponding Index
Fund invests is Barclays Global Fund Advisors ("Barclays")

<PAGE> 33

Each subadviser is selected for its individual investment management expertise
and each operates independently of the others. Each subadviser is either
registered with the Securities and Exchange Commission (SEC) under the
Investment Advisers Act of 1940 or is a Bank, Insurance Company or Trust Company
exempt as such from registration. Further information on each Fund's
subadviser(s) may be found in the prospectus and this Statement of Additional
Information in the description of each Fund and under the heading "Investment
Advisory and Other Services".

Each subadviser agrees to exercise complete management discretion over assets of
the Fund allocated to its account in a manner consistent with the Fund's
investment policies and guidelines and within such further investment
limitations and conditions as may be established by VIA.

A formal review and appraisal of each Fund's investment objectives and
performance will be conducted periodically by the Board of Directors, and any
material changes in the Fund's fundamental investment objectives will be put to
a vote of its shareholders.

The Funds may engage in one or more securities lending programs conducted by the
Funds' custodian or other appropriate entities.

The 500 Stock Index Fund is not sponsored, endorsed, sold or promoted by
Standard & Poor's a division of the McGraw-Hill Companies, Inc. ("S&P"), or by
Wilshire Associates Inc. ("Wilshire Associates"). Neither S&P nor Wilshire
Associates makes any representation or warranty, express or implied, to the
owners of the product or any member of the public regarding the advisability of
investing in securities generally or in the product particularly or the ability
of the S&P 500 Index, the Wilshire 45000 Index(R) or the Wilshire 5000
Index(R) to track general stock market performance. S&P's and Wilshire
Associates' only relationship to the licensee is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index and Wilshire
Associates and the Wilshire 4500 Index and Wilshire 5000 Index, which are
determined, composed and calculated by S&P or Wilshire Associates without
regard to the licensee or the product. S&P and Wilshire Associates have no
obligation to take the needs of the licensee or the owners of the product into
consideration in determining, composing or calculating the S&P 500 Index, the
Wilshire 4500 Index or the Wilshire 5000 Index. S&P and Wilshire Associates are
not responsible for and have not participated in the determination of the
prices and amount of the product or the timing of the issuance or sale of the
product or in the determination or calculation of the equation by which the
product is to be converted into cash. S&P and Wilshire Associates have no
obligation or liability in connection with the administration, marketing or
trading of the product.

Neither S&P nor Wilshire Associates guarantees the accuracy and/or the
completeness of the S&P 500 Index, the Wilshire 4500 Index, the Wilshire 5000
Index or any data included therein and neither S&P nor Wilshire Associates
shall have any liability for any errors, omissions, or interruptions therein.
S&P and Wilshire Associates make no warranty, express or implied, as to
results to be obtained by licensees, owners of the product, or any other
person or entity from the use of the S&P 500 Index, Wilshire 4500 Index,
Wilshire 5000 Index or any data included therein. S&P and Wilshire Associates
make no express or implied warranties, and expressly disclaim all warranties
of merchantability or fitness for a particular purpose or use with respect to
the S&P 500 Index, Wilshire 4500 Index, Wilshire 5000 Index or any data
included therein. Without limiting any of the foregoing, in no event shall S&P
or Wilshire Associates have any liability for any special, punitive, indirect,
or consequential damages (including lost profits), even if notified of the
possibility of such damages.

COMPARATIVE INDEXES

The Funds may, from time to time, use one or more of the unmanaged indexes
listed below for purposes of appraising fund performance. This list of indexes
is not intended to be all inclusive, and other indexes, benchmarks or peer
groups may be used, as deemed appropriate by the Board of Directors.

Standard & Poor's 500 Stock Index -- consists of 500 companies representing
larger capitalization stocks traded in the U.S.

Standard & Poor's MidCap 400 Index -- consists of 400 medium sized domestic
stocks traded in the U.S.

<PAGE> 34

Standard & Poor's BARRA MidCap Growth Index -- consists of the stocks of the
S&P MidCap 400 Index having growth characteristics.

Wilshire 5000 Equity Index -- consists of all common equity securities
domiciled in the U.S. for which daily pricing is available.

Wilshire 4500 Equity Index -- consists of all stocks in the Wilshire 5000 except
for those included in the Standard & Poor's 500 Stock Index.

Morgan Stanley Capital International EAFE Free Index -- consists of
approximately 1100 securities listed on the stock exchanges of developed
markets of countries in Europe, Australia and the Far East. The EAFE Free
Index excludes securities that are not available to U.S. investors.

Lehman Brothers Long-Term Treasury Bond Index -- consists of all Treasury
obligations with maturities of 10 years or greater.

Lehman Brothers Government/Corporate Bond Index -- consists of U.S. Treasury,
agency, and corporate securities rated BBB or better.

Merrill Lynch 5-7 Year Treasury Index -- consists of all Treasury obligations
with maturities between 5 and 7 years.

Russell 2000 Index -- consists of the smallest 2,000 of the 3000 largest U.S.
companies based on total market capitalization, representing approximately 7%
of the Russell 3000 Index's total market capitalization.

ELIGIBLE INVESTMENTS

In addition to the securities and financial instruments described in the
prospectus, the Vantagepoint Funds are authorized to invest in the types of
securities and financial instruments listed below. Not all Funds will invest in
all such securities and/or financial

<PAGE> 35

instruments as indicated below.

A. CASH/CASH EQUIVALENTS: Fixed income obligations with maturity less than one
year, including short term accounts managed by a custodian institution and
shares of money market mutual funds. All funds may also participate in
repurchase agreements and reverse repurchase agreements.

B. FINANCIAL FUTURES: A futures contract is an agreement to buy or sell a
specific amount of a commodity or financial instrument at a particular price on
a stipulated future date. Futures are used to adjust investment exposure and
may involve a small investment of cash relative to the magnitude of the risk
assumed.

OTHER INVESTMENTS:

The funds may invest in certain other instruments as follows:

i. Rights and Warrants. All funds except the Money Market Fund and the
U.S. Treasury Securities Fund.

ii. Convertible Securities. All funds except the Money Market Fund and
the U.S. Treasury Securities Fund.

iii. Forward contracts. The International Fund and the Overseas Equity
Index Fund.

ELIGIBLE PRACTICES: There are no restrictions on subadvisers as to the
following:

- - Fund turnover.

- - Realized gains and losses.

These guidelines are not fundamental policies and may be changed by the Funds'
Board of Directors without a vote of shareholders.

FUND POLICIES AND INVESTMENT LIMITATIONS

The following policies supplement the Funds' investment limitations set forth in
the prospectus. It is the policy of each Fund not to engage in any of
the activities or business practices set forth below. Unless it is noted that a
particular restriction is not fundamental, these restrictions may not be
changed with respect to a particular Fund without the approval of a
dollar-weighted majority of the outstanding shares (the term "majority" is used
as defined in the Investment Company Act of 1940) of that Fund. A Fund may not:

(1) Issue senior securities, (as defined in the Investment Company Act of 1940)
except as permitted by rule, regulation, or order of the S.E.C.;

(2) Engage in the business of underwriting securities issued by others, except
to the extent a Fund may technically be deemed to be an underwriter under the
Securities Act of 1933, as amended (this restriction is not fundamental);

(3) Purchase or otherwise acquire any security if, as a result, more than 15% of
its net assets would be invested in securities that are illiquid (this
restriction is not fundamental);

<PAGE> 36

(4) Make loans, except (i) by purchasing bonds, debentures or similar
obligations (including repurchase agreements, subject to the limitation
described in (3) above) which are either publicly distributed or customarily
purchased by institutional investors, and (ii) by lending its securities to
banks, brokers, dealers and other financial institutions so long as such loans
are not inconsistent with the Investment Company Act of 1940 or the rules and
regulations or interpretations of the Securities and Exchange Commission (the
"Commission") thereunder and the aggregate value of all securities loaned does
not exceed 33 1/3% of the market value of a Fund's net assets;

(5) Pledge, mortgage, or hypothecate its assets, except to secure authorized
borrowings as provided in the prospectus (this restriction is not fundamental);

(6) Buy any securities or other property on margin (except as may be needed to
enter into futures and options transactions as described in the prospectus and
this Statement of Additional Information and for such short-term credits as are
necessary for the clearance of transactions), or engage in short sales (unless
by virtue of a Fund's ownership of other securities that it has a right to
obtain at no added cost and which are equivalent in kind and amount to the
securities sold), except as set forth in the prospectus (this restriction is
not fundamental);

(7) Purchase or sell puts or calls, or combinations thereof except as provided
in the prospectus;

(8) Purchase or sell real estate or real estate limited partnerships (although a
Fund may purchase securities secured by real estate interests or interests
therein, or issued by companies or investment trusts which invest in real estate
or interests therein);

(9)Invest in the securities of other investment companies, except as may be
acquired as part of a merger, consolidation or acquisition of assets approved by
a Fund's shareholders or otherwise to the extent permitted by Section 12 of the
Investment Company Act of 1940 or by any rule, regulation, opinion or
interpretation of the Commission. Notwithstanding this restriction, the Index
Funds and the Money Market Fund may enter into arrangements as described in the
prospectus and in this Statement of Additional Information. A Fund will invest
only in investment companies which have investment objectives and investment
policies consistent with those of the Fund making such investment except that a
Fund may invest a portion of its assets in a money market fund for cash
management purposes (this restriction is not fundamental);

(10) Invest in companies for the purpose of exercising control or management;
and

(11) Invest more than 25% of its assets in any single industry, except for the
Money Market Fund and with respect to the Index Funds, to the extent that such
industry concentration is a component of a Fund's benchmark index.

The above-mentioned Fund policies and investment limitations are considered at
the time investment securities are purchased (with the exception of the
restriction on illiquid securities).

<PAGE> 37

THE INDEX FUNDS
---------------

Each Index Fund is managed by Barclays using quantitative, structured and
passive management techniques. Each such Fund, except the Overseas Index Fund,
is structured as a "feeder" fund which invests in a Master Portfolio of the
Master Investment Portfolio. The "Master Portfolio" invests in securities
in accordance with investment objectives, policies, and limitations that are
substantially similar to those of the applicable Index Fund.

The Broad Market Index Fund's Master Portfolio invests substantially all of its
assets in two other Master Portfolios of Barclays. One of these Master
Portfolios, in turn, invests substantially all of its assets in a representative
sample of stocks comprising the Wilshire 4500 Index. The other Master
Portfolio, in turn, invests substantially all of its assets in stocks
comprising the S&P 500 Index (together, the "Underlying Portfolios"). The
Master Portfolio's assets will be invested in the Underlying Portfolios in
proportions adjusted periodically to maintain the capitalization range of the
Wilshire 5000 Index.

The assets of the Vantagepoint Index Funds are invested in these Master
Portfolios in proportions that are designed to meet their respective
objectives. The Vantagepoint 500 Stock Index Fund invests exclusively in the
S&P 500 Index Portfolio. The Vantagepoint Mid/Small Company Index Fund invests
exclusively in the Extended Index Portfolio. The Vantagepoint Broad Market
Index Fund invests the U.S. Equity Index Fund which, in turn, invests in both
Underlying Portfolios in proportions that are designed to approximate the
performance of the Wilshire 5000 Index. Finally, the Vantagepoint Core Bond
Index Fund invests in a separate Master Portfolio that is designed to track
its benchmark index.

The Index Funds employ "passive" management techniques, meaning that each Fund
tries to match, as closely as possible, the performance of its benchmark index.
Because it would be very expensive to buy and sell all of the stocks (or bonds,
as the case may be) in the target index, the Mid / Small Company, the Broad
Market, and the Core Bond Index Funds use a "sampling" technique. Using computer
programs, each of these Funds selects securities that will recreate its
benchmark index in terms of factors such as industry, size, and other
characteristics. Therefore, the performance of the Funds versus their
respective benchmarks can be expected to deviate more than that of funds
investing in all of the securities contained in a benchmark.

<PAGE> 38

MANAGEMENT OF THE VANTAGEPOINT FUNDS

The Vantagepoint Funds is organized as a Delaware business trust and is governed
by a 7-member Board of Directors, one of whom is an "interested" director as
that term is defined in the Investment Company Act of 1940. The Directors stand
in the position of fiduciaries to the shareholders and, as such, they have a
duty of due care and loyalty, and are responsible for protecting the interests
of shareholders. The Directors are responsible for the overall supervision of
the operations of the Vantagepoint Funds and evaluation of the performance of
its investment adviser.

Vantagepoint Investment Advisers, LLC ("VIA") serves as investment adviser to
the Funds and employs a supporting staff of management personnel needed to
provide the requisite services to the Funds and also furnishes the Funds with
necessary office space, furnishings, and equipment. Each Fund pays its share of
VIA's net expenses which are allocated among the Funds under procedures
approved by the Funds' Board of Directors. In addition, each Fund bears its own
direct expenses, such as legal, auditing and custodial fees.

The Officers of the Vantagepoint Funds are also officers of VIA. The Officers of
the Funds manage its day-to-day operations and are responsible to the Funds'
Board of Directors.

The Vantagepoint Funds and affiliates adhere to an Insider Trading Policy
established pursuant to Rule 17j-1 of the Investment Company Act of 1940. The
policy is designed to prevent unlawful

<PAGE> 39

practices in connection with the purchase and sale of securities by persons
associated with the Funds, including officers and employees of VIA.

The names of the Directors and Officers of the Funds and their principal
occupations over the last 5 years may be found in the prospectus under the
heading "Management of the Vantagepoint Funds".

COMPENSATION
------------

Directors and Officers of the Funds do not receive salaries, retirement
benefits, deferred compensation or any other form of compensation from the
Vantagepoint Funds. Directors are reimbursed for expenses incurred in the
exercise of their duties. As of the date of this Statement of Additional
Information, Directors and Officers of the Funds as a group beneficially owned
less than 1% of the outstanding shares of the Funds.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

Initially, the principal shareholder in the Vantagepoint Funds will be the ICMA
Retirement Trust (the "RT"), a District of Columbia common law trust. The RT was
established for the purpose of holding and investing the assets of public sector
retirement and deferred compensation plans. The RT will own a majority of the
outstanding shares of the Funds upon registration.

In exercising its rights as a shareholder in the Funds, the RT will seek
instructions from its investors, the plan sponsors of the public sector
retirement plans invested in the RT (the "employers"), in advance of exercising
the RT's voting rights. The RT will vote its shares of the Fund in the same
proportion as the instructions that it receives from the employers.

INVESTMENT ADVISORY AND OTHER SERVICES

VIA is a wholly-owned subsidiary of, and is controlled by the ICMA Retirement
Corporation ("RC"), a retirement plan administrator and investment adviser whose
principal investment advisory client is the RT. RC was established as a
not-for-profit organization in 1972 to assist state and local governments and
their agencies and instrumentalities in the establishment and maintenance of
deferred compensation and qualified retirement plans for the employees of such
public sector entities. These plans are established and maintained in accordance
with Sections 457 and 401, respectively, of the Internal Revenue Code of 1986,
as amended. RC has been registered as an investment adviser with the U.S.
Securities and Exchange Commission since 1983.

<PAGE> 40

RC is governed by a 10-member Board of Directors approved by the Executive
Committee of the International City/County Management Association, the
organization that founded RC. RC is a non-stock corporation.

VIA is a Delaware limited liability company, and is registered as an investment
adviser with the Securities and Exchange Commission.

VIA provides investment advisory services to each of the Vantagepoint Funds
pursuant to a Master Advisory Agreement (the "Advisory Agreement"). The advisory
services include Fund design, establishment of Fund investment objectives and
strategies, selection and management of subadvisers, and performance monitoring.
VIA supervises and directs the Funds' investments. Additionally, VIA selects
the Master Portfolios in which the Index Funds (other than the Overseas Equity
Index Fund) invest. VIA furnishes periodic reports to the Funds' Board of
Directors regarding the investment strategy and performance of each Fund.

Pursuant to the Advisory Agreement, the Vantagepoint Funds compensate VIA for
these services by paying VIA an annual advisory fee assessed against daily
average net assets under management in each Fund as follows:

<TABLE>
<CAPTION>
Advisory fee
------------

<S> <C>
All Funds except the Index Funds 0.10%

Index Funds 0.05%
</TABLE>

VIA or its broker-dealer affiliate, ICMA-RC Services LLC, provides all
distribution and marketing services for the Funds. VIA or its transfer agent
affiliate, Vantagepoint Transfer Agents, LLC. ("VTA"), also provides certain
administrative shareholder support services for the Vantagepoint Funds related
to the retirement plans investing in the Funds. VIA or VTA, as the case may be,
also provides Fund administration services, such as preparation of shareholder
reports and proxies, shareholder recordkeeping and processing of orders.

VIA or VTA receives asset-based compensation for these administrative services
on an annual basis as follows:

<TABLE>
<CAPTION>
Fee for Fee for
Investor Services Fund Services
----------------- -------------

<S> <C> <C>
All Funds except
the Index Funds 0.20% 0.15%

Index Funds
Class I 0.15% 0.15%
- -------
Class II 0.05% 0.05%
- --------
</TABLE>

<PAGE> 41
The advisory fee, the fee for Investor services, and the fee for Fund services
are deducted from the applicable Fund's assets, and their effect is factored
into any quoted share price or investment return for that Fund.

The day-to-day management of each Fund rests with one or more subadvisers hired
by the Funds with the assistance of VIA. The responsibility for overseeing
subadvisers rests with VIA's Investment Division, headed by Senior Vice
President John Tobey, reporting directly to Girard Miller, CFA , President of
VIA. The following tables identify each subadviser and indicate the annual
subadvisory fee that is paid out of the assets of each Fund. The fee is assessed
against average daily net assets under management. The fee schedules that have
been negotiated with each subadvisers are set forth below.

<TABLE>
<CAPTION>
AGGRESSIVE OPPORTUNITIES FUND

Assets
Subadviser Managed Fee
- ---------- ------- ---
<S> <C> <C>
First Pacific Advisers First $100 million 0.80%
Over $100 million 0.75%

MFS Institutional Advisers, Inc. Flat fee 0.75%

TCW Funds Management, Inc. First $100 Million 0.73%
Next $100 Million 0.69%
Over $200 Million 0.67%

INTERNATIONAL FUND

Subadviser
- ----------

Capital Guardian Trust Company First $25 Million 0.75%*
Next $25 Million 0.60%
Next $200 Million 0.43%
Next $250 Million 0.38%
*Mimimum Fee of $337,500
Payable to Capital
Guardian

Lazard Asset Management First $100 million 0.50%
Over $100 million 0.40%

Rowe Price-Fleming, International, Inc. First $20 Million 0.75%
Next $30 Million 0.60%
Over $50 Million* 0.50%
*On all assets managed
by Rowe Price-Fleming

GROWTH FUND

Subadviser
- ----------

Cadence Capital Management First $100 million 0.45%
Next $400 million 0.20%
Over $500 million 0.15%

William Blair & Company, LLC First $150 million 0.50%
Next $150 million 0.45%
Over $300 million 0.40%

Neuberger Berman, LLC Flat fee 0.45%

Barclays Global Fund Advisors First $500 million 0.04%
Next $500 million 0.02%
Over $1 billion 0.01%
Fidelity Management Trust Company
(Small Company account) First $25 million 0.80%
Over $25 million 0.60%
(Aggressive Equity account) Flat fee** 0.38%
</TABLE>

** From 1/1/2000 to 12/31/2000 the annual fee will be 45 of 1%. Beginning on
1/1/2000 the annual fee will be .80 of 1% on the first $25 milliom and .60% on
assets over $25 million. of 1%

<PAGE> 42

<TABLE>
<CAPTION>
GROWTH AND INCOME FUND

Assets
Subadviser Managed Fee
- ---------- ------- ---

<S> <C> <C>
Capital Guardian Trust Company First $25 million 0.55%*
Next $25 million 0.40%
Over $50 million 0.23%
* Mimimum fee of
$167,500 payable to
Capital Guardian

Putnam Investments Management, Inc. First $15 million 0.55%
Next $35 million 0.40%
Next $50 million 0.30%
Over $100 million 0.25%

EQUITY INCOME FUND

Subadviser
- ----------

Crawford Investment Counsel, Inc. First $100 million 0.20%
Next $100 million 0.15%
Over $200 million 0.10%

Newell Associates First $250 million 0.20%
Next $500 million 0.15%
Next $250 million 0.10%
Over $1 billion 0.08%

ASSET ALLOCATION FUND

Subadviser
- ----------

AVATAR Investors Associates Corp. First $250 million 0.25%
Next $250 million 0.20%
Over $500 million 0.18%

Mellon Capital Management First $200 million 0.38%
Over $200 million 0.20%

Wilshire Asset Management First $100 million 0.04%
Next $400 million 0.02%
Over $500 million 0.01%

Payden & Rygel Investment Counsel First $200 million 0.10%
Next $100 million 0.09%
Over $300 million 0.08%

U.S. TREASURY SECURITIES FUND

Subadviser
- ----------

Seix Investment Advisors, Inc. First $25 million 0.17%
Next $50 million 0.12%
Next $25 million 0.07%

Money Market Fund (Aim Advisors, Inc) 0.08%

OVERSEAS EQUITY INDEX FUND

Barclays Global Fund Advisors N.A.* First $25 million 0.20%
Over $25 million 0.15%
* Minimum fee of
$75,000 payable to
Barclays
</TABLE>

<PAGE> 43

<TABLE>
<CAPTION>
Index Funds (Barclays)

Advisory and
Administrative
Fees
--------
<S> <C>
Broad Market Index Fund** 0.08%

500 Stock Index Fund 0.05%

Core Bond Index Fund 0.08%

Mid/Small Company Index 0.10%
</TABLE>

**Barclays is entitled to receive monthly fees at the annual rate of 0.01% of
the average daily net assets of the Master Portfolio, 0.08% of the average
daily net assets of the Extended Index Portfolio and 0.05% of the average daily
net assets of the S&P 500 Index Portfolio as compensation for its advisory
services. The Master Portfolio bears its pro rata share of the advisory fees of
the Underlying Portfolios. Based on these fee levels and the expected
allocation of assets between the two Underlying Portfolios, the advisory fees
payable to Barclays by the Master Portfolio on a combined basis will be
approximaetly 0.07% of the average daily net assets of the Master Portfolio.
From time to time, Barclays may waive such fees in whole or in part. Any such
waiver will reduce the expenses of the Master Portfolio and, accordingly, have
a favorable impact on its performance.

Information on the advisory services provided by each subadviser and services
provided by Barclays for each Fund can be found in the prospectus, under the
heading "Investment Policies, Investment Objectives, Principal Investment
Strategies, and Related Risks".

PORTFOLIO TRANSACTIONS OF THE FUNDS

VIA maintains a commission recapture program with certain brokers for the
Aggressive Opportunities Fund, the International Fund, the Growth Fund, the
Growth and Income Fund, and the Equity Income Fund. Under that program, a
percentage of commissions generated by the portfolio transactions for those
Funds is rebated to the Funds by the brokers and used to reduce the operating
expenses of those Funds.

The advisory agreements with each subadviser authorize the subadviser to select
the brokers or dealers who will execute the purchases or sales of securities for
each Fund. The agreements direct the subadvisers to use best efforts to obtain
the best available price and most favorable execution with respect to all
transactions for the Funds.

<PAGE> 44

In placing Fund transactions, each subadviser will use its best judgment to
choose the broker most capable of providing the brokerage services necessary to
obtain most favorable execution.

In choosing brokers, the subadvisers may take into account, in addition to
commission cost and execution capabilities, the financial stability and
reputation of the brokers and the brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided by such brokers. The subadviser is authorized to pay brokers who
provide such brokerage or research services a commission for executing a
transaction which is in excess of the commission another broker would have
charged for that transaction if the subadviser determines that such commission
is reasonable in relation to the value of the brokerage and research services
provided to the subadviser by the broker.

With respect to the Index Funds, Barclays assumes general supervision over
placing orders on behalf of the Master Portfolio for the purchase or sale of
portfolio securities. Allocation of brokerage transactions, including their
frequency, is made in the best judgment of Barclays and in a manner deemed fair
and reasonable to interestholders. In executing portfolio transactions and
selecting brokers or dealers, Barclays seeks to obtain the best overall terms
available for the Master Portfolio. In assessing the best overall terms
available for any transaction, Barclays considers factors deemed relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. The primary consideration is prompt execution of
orders at the most favorable net price. Certain of the brokers or dealers with
whom the Master Portfolio may transact business offer commission rebates to the
Master Portfolio. Barclays considers such rebates in assessing the best
overall terms available for any transaction. The overall reasonableness of
brokerage commissions paid is evaluated by Barclays based upon its knowledge of
available information as to the general level of commissions paid by other
institutional investors for comparable services. Brokers also are selected
because of their ability to handle special executions such as are involved in
large block trades or broad distributions, provided the primary consideration
is met. Portfolio turnover may vary from year to year, as well as within a
year. High turnover rates over 100% are likely to result in comparatively
greater brokerage expenses.

One or more of the subadvisers may aggregate sale and purchase orders from the
Funds with similar orders made simultaneously for other clients of the
subadviser. The subadviser will do so when, in its judgment, such aggregation
will result in overall economic benefit to the Fund, taking into consideration
the advantageous selling or purchase price, brokerage commission, and other
expenses.

If an aggregate order is executed in parts at different prices, or two or more
separate orders for two or more of a subadviser's clients are entered at
approximately the same time on any day are executed at different prices, the
subadviser has discretion, subject to its fiduciary duty to all its clients, to
use an average price at which such securities were purchased or sold for each of
the clients for whom such orders were executed.

The Vantagepoint Funds participate in a securities lending program under which
the Funds' custodians is authorized to lend Fund securities to qualified
institutional investors under contracts calling for collateral in U.S.
Government securities or cash in excess of the market value of the securities
loaned. The Vantagepoint Funds receive dividends and interest on the loaned
securities. Lending fees received in the Vantagepoint Funds account are used to
reduce overall custodial expenses in the Funds from which the loaned securities
originated.

CAPITAL STOCK AND OTHER SECURITIES

The Vantagepoint Funds is an open-end diversified management investment company
organized as a Delaware business trust. As an open-end company, the Vantagepoint
Funds continually offers shares to the public. With the exception of the Index
Funds, each Fund offers a single class of shares.

<PAGE> 45

The Index Funds offer two classes of shares, Class I and Class II. Class I
shares are open to IRA and other individual accounts and each public sector
employee benefit plan that invests indirectly in the Funds through the ICMA
Retirement Trust containing assets of less than $40 million. Class II shares are
open (i) to qualifying public sector employee benefit plans that invest directly
in the Funds and have qualifying assets in excess of $125 million and (ii)
public sector employee benefit plans that invest indirectly in the Funds through
the ICMA Retirement Trust and have qualifying assets in excess of $40 million so
invested. Other plans with average account balances or other features that are
expected to afford the Index Funds with certain economies of scale in servicing
employee benefit plan participant accounts, may also qualify for Class II
shares.

PURCHASE, REDEMPTION AND PRICING OF SHARES

Purchases
- ---------

Reference is made to the prospectus under the heading "Purchases, Exchanges and
Redemptions".

The Funds reserve the right in their sole discretion (i) to suspend the offering
of their shares or (ii) to reject purchase orders when in the judgment of
management such rejection is in the best interest of a particular Fund or Funds.

Redemptions
- -----------

Reference is made to the prospectus under the heading "Purchases, Exchanges and
Redemptions". The Funds may suspend redemption privileges or postpone the date
of payment (i) during any period that the New York Stock Exchange is closed or
trading on the exchange is restricted as determined by the Securities and
Exchange Commission (the "Commission"), (ii) during any period when an emergency
exists as defined by the rules of the Commission as a result of which it is not
reasonably practicable for the Funds to dispose of securities owned by it, or
fairly to determine the value of its assets, and (iii) for such other periods as
the Commission may permit.

Certain redemption requests must include a signature guarantee
- --------------------------------------------------------------

A signature guarantee is designed to protect you against fraud and may be
required by The Vantagepoint Funds at the discretion of its management. A
redemption request must be made in writing and must include a signature
guarantee if any of the following situations would apply:

* The account registration has changed within the past 30 days;
* The check is being mailed to an address other than the one listed on the
account (record address);
* The check is being made payable to someone other than the account owner;
* The redemption proceeds are being transferred to an account with a
different registration;
* Proceeds are to be wired to a bank account that was not pre-designated;

<PAGE> 46

* Any other transaction reasonably determined by the Funds to require a
signature guarantee.

A signature guarantee may be obtained from a bank, broker, dealer, credit union
(if authorized under state law), securities exchange or association, clearing
agency or savings association. Please note: a notary public cannot provide a
signature guarantee, and a notarized redemption request is not sufficient.

The Funds have made an election with the Commission to pay in cash all
redemptions requested by any shareholder of record limited in an amount during
any 90-day period to the lesser of $250,000 or 1% of the net assets of the Fund
at the beginning of such period. Such commitment is irrevocable without the
prior approval of the Commission. Redemptions in excess of the above limits may
be paid, in whole or in part, in investment securities or in cash, as the
Directors may deem advisable; however, payment will be made wholly in cash
unless the Directors believe that economic or market conditions exist which
would make a practice detrimental to the best interests of the Fund. If
redemptions are paid in investment securities, such securities will be valued as
set forth in the Prospectus under "Pricing and Timing of Transactions" and a
redeeming shareholder would normally incur brokerage expenses if he or she
converted these securities to cash.

TAXATION OF THE FUND

The Vantagepoint Funds intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code, which would cause the income
and capital gains of the Trust to "pass through" to the shareholders for federal
income and capital gains tax purposes. Failure to qualify for Subchapter M
status could result in federal income and capital gains taxes being assessed at
the Fund level, which would reduce Fund returns correspondingly.

CALCULATION OF PERFORMANCE DATA

As newly registered funds, the Vantagepoint Funds have no performance history.
However, the Vantagepoint Funds are patterned on, have the same investment
objectives, and are operated in subtantially the same fashion, as certain funds
that have been offered through the ICMA Retirement Trust, an unregistered
commingled fund which holds and invests the assets of public sector retirement
plans. The inception dates of these funds are noted below. Substantially all of
the portfolio securities of each Vantagepoint Fund were transferred from the
corresponding fund of the ICMA Retirement Trust. Barclays was not the adviser
to any of the Funds shown during these periods. The underlying portfolio of
each fund of the ICMA Retirement Trust currently consists solely of the shares
of the corresponding Vantagepoint Fund in which it invests.

The performance shown below is the performance an investor would have received
had the funds of the ICMA Retirement Trust charged the same asset-based fees and
expenses as the Vantagepoint Funds, as set forth in the prospectus.

The ICMA Retirement Trust's index funds offered a single class of shares. The
ICMA Retirement Trust did not offer a money market fund or a growth and income
fund or a core bond index fund, and performance is not shown for those
Vantagepoint Funds. Figures shown are updated to most recent quarter-end.

Please note that the performance depicted is hypothetical. Actual performance
of the Vantagepoint Funds may vary from that shown.

<PAGE> 47
<TABLE>
<CAPTION>
Since
Fund 1 yr 3 yr 5 yr 10 yr Inception
- ---- ---- ---- ---- ----- ---------
<S> <C> <C> <C> <C> <C>
Aggressive
Opportunities (inception date: 10/1/94) 12.2% 18.2% n/a n/a 23.1%
International (inception date: 10/1/94) 5.0% 8.5% n/a n/a 7.6%
Growth 19.8% 22.4% 19.3% 18.9% n/a
Equity Income (inception date: 4/1/94) 2.5% n/a n/a 22.0%
Asset Allocation 22.4% 21.1% 17.7% 15.0% n/a
U.S. Treasury
Securities (inception date: 7/1/92) 9.7% 6.6% 6.3% n/a 7.2%
Overseas Equity
Index (inception date: 7/1/97) 19.8% n/a n/a n/a 8.8%
Mid/Small Company (inception date: 7/1/97) 7.3% n/a n/a n/a 16.3%
Broad Market Index 22.7% 24.7% 21.3% 17.1% n/a
500 Stock Index (inception date: 7/1/97) 28.1% n/a n/a n/a 28.1%
</TABLE>

Communications which refer to the use of a Fund as a potential investment for
employee benefit plans or Individual Retirement Accounts may quote a total
return based upon compounding of dividends on which it is presumed no Federal
tax applies.

In assessing such comparison of yields, an investor should keep in mind that the
composition of the investments in the reported averages may not be identical to
the formula used by the Fund to calculate its yield. In addition, there can be
no assurance that any Fund will continue its performance as compared to such
other averages.

<PAGE> 48

LEGAL COUNSEL INDEPENDENT AUDITORS & CUSTODIAN.

Morgan, Lewis & Bockius, Washington, D.C. serves as legal counsel to The
Vantagepoint Funds. PricewaterhouseCoopers, LLP, Baltimore, MD, serves as
independent auditors. Investors Bank & Trust, Boston, MA serves as custodian.

<PAGE> 49

VANTAGEPOINT FUNDS
VANTAGEPOINT MONEY MARKET FUND

Statement of Asset and Liabilities

February 19, 1999

<TABLE>
<S> <C>
Cash $100,000

Total Assets $100,000

Total Liabilities -

Net Assets - Offering and redemption price of $1.00 $100,000
Per share with 100,000 shares outstanding
</TABLE>

Notes to Financial Statements

A. Organization

The Vantagepoint Funds (Delaware Business Trust) was organized on July 28, 1999
and was established as a no load open-end diversified "series" investment
company offering thirteen distinct investment portfolios (the "Funds"). The five
Index Funds offer two classes of shares. The other Funds offer a single class of
shares. The Vantagepoint Funds has had no operations other than those matters
related to their organization and registration as an investment company under
the Investment Company Act of 1940. The Statement of Assets and Liabilities
presented is for the Vantagepoint Money Market Fund, one of the portfolios
comprising The Vantagepoint Funds. The ICMA Retirement Corporation (a registered
Investment Adviser) has provided the initial capital for the Fund by purchasing
100,000 shares of the Vantagepoint Money Market Fund at $1.00 per share. Such
shares were acquired for investment and can be disposed of only by redemption.

The Funds are patterned on, have the same investment objectives, and are
operated in substantially the same fashion as certain funds offered through the
ICMA Retirement Trust, an unregistered commingled fund which holds and invests
the assets of public sector retirement plans. Most of the portfolio securities
of the ICMA Retirement Trust will be transferred in-kind to the corresponding
fund of the Vantagepoint Funds upon the commencement of operations. The
underlying portfolio of each fund of the ICMA Retirement Trust will consist
solely of the shares of the corresponding Vantagepoint Fund in which it invests.

B. Organization Costs

<PAGE> 50

The costs incurred in connection with the organization of the Funds has been
borne by ICMA Retirement Corporation. The Funds will not be required to
reimburse ICMA Retirement Corporation for these costs.

C. Management of the Funds

The Funds are managed by Vantagepoint Investment Advisers, LLC (VIA) a
wholly-owned subsidiary of ICMA Retirement Corporation. VIA employs a
"multi-management" strategy in which it evaluates, selects, and monitors one or
more subadvisors for each Fund. Compensation for the investment management of
the Funds paid to VIA and the subadvisors is asset based, i.e., it consists of
an annual percentage fee calculated based on average assets under management.
The aggregate annual advisory fees paid to VIA and to subadvisors ranges from
.10% to .86% of the average daily net assets of each Fund. VIA or its
broker-dealer affiliate, ICMA-RC Services, LLC, provides all distribution and
marketing services to the Funds. VIA or its transfer agent affiliate,
Vantagepoint Transfer Agents, LLC ("UTA") also provides certain administrative
shareholder support services for the Funds. VIA or VTA receives asset-based
compensation for these additional administrative services ranging from .10% to
.35% of the average daily net assets of the Funds.

<PAGE> 51

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
The Vantagepoint Funds:

In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of the Vantagepoint
Money Market Fund, one portfolio comprising The Vantagepoint Funds (the "Fund")
at February 19, 1999 in conformity with generally accepted accounting
principles. This financial statement is the responsibility of the Fund's
management; our responsibility is to express an opinion on this financial
statement based upon our audit. We conducted our audit of this financial
statement in accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for the opinion expressed above.

PricewaterhouseCoopers LLP

Baltimore, Maryland
February 22, 1999