VANTAGEPOINT FUNDS, 497, 2000-05-03

VANTAGEPOINT FUNDS
497, 2000-05-03

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<PAGE> 1

THE VANTAGEPOINT FUNDS
PROSPECTUS

MAY 1, 2000

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 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]
<PAGE> 2

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

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

FEE TABLES 11

INVESTMENT OBJECTIVES AND POLICIES 14

RISKS OF INVESTING IN THE FUNDS 23
Investment Limitations 24

MANAGEMENT OF THE FUNDS 24
Directors and Officers 26

SHAREHOLDER INFORMATION 27
Share Accounting for All Funds 27
Valuation of Funds 27
Reinvestment of Earnings 27
Pricing and Timing of Transactions 27
Reporting to Investors 28

PURCHASES, EXCHANGES AND REDEMPTIONS 28
Purchases 28
Purchases by Employee Benefit Plans 28
Exchanges and Allocations Among
Funds 29
Exchanges by Telephone 29
VantageLine 29
VantageLink 30
Purchases by IRA Investors 30

DISTRIBUTION ARRANGEMENTS 30

TAXATION 31

FINANCIAL HIGHLIGHTS 32
</TABLE>
<PAGE> 3

SUMMARY -- INVESTMENTS, RISKS AND PERFORMANCE
- --------------------------------------------------------------------------------

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 7, 8 and 9 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 23. To the extent that a particular Fund is managed according to a specific
style, 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.

Performance--The Vantagepoint Funds are patterned on, have the same investment
objectives, and are operated in substantially the same fashion, as certain funds
that have been offered through the ICMA Retirement Trust (the "Trust"), an
unregistered commingled fund that holds and invests the assets of public sector
retirement plans. Substantially all of the portfolio securities of each of the
Vantagepoint Funds were transferred from the corresponding fund of the ICMA
Retirement Trust on March 1, 1999. Performance figures set forth in this
prospectus for any period prior to March 1, 1999 represent performance of the
trust funds.

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.

Performance Information--The bar chart and the performance tables below
illustrate the risks and volatility of an investment in the Fund. Of course, the
Fund's past performance does not necessarily indicate how the Fund will perform
in the future.

The periods prior to March 1, 1999, when the Fund began operating, represent the
performance of a commingled fund that had the same investment objective and
policies and was advised by an affiliate of the Fund's adviser. This past
performance has been adjusted to reflect current expenses of the Fund. The
commingled fund was not a registered mutual fund so it was not subject to the
same investment and tax restrictions as the Fund. If it had been, the commingled
fund's performance may have been lower.

1
<PAGE> 4

This bar chart shows changes in the performance of the Aggressive Opportunities
Fund's shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
AGGRESSIVE OPPORTUNITIES FUND
-----------------------------
<S> <C>
1995 39.35%
1996 25.50
1997 17.39
1998 12.17
1999 58.08
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
39.89% -20.20%
(4TH QTR 99) (3RD QTR 98)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
Since
Shares* 1 Year 3 Years 5 Years Inception*
------- ------ ------- ------- ----------
<S> <C> <C> <C> <C>
AGGRESSIVE
OPPORTUNITIES FUND 58.08% 27.68% 29.49% 29.11%**
WILSHIRE 4500 INDEX 35.03% 22.62% 23.59% 21.76%
LIPPER CAPITAL
APPRECIATION FUND
INDEX 39.19% 26.06% 24.82% 23.17%
</TABLE>

* October 1, 1994

**Shares of the Fund were offered beginning March 1, 1999. The performance
information shown prior to that date represents performance of the Fund's
predecessor commingled fund which was offered beginning October 1, 1994.

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 with above-average potential for growth
- investing in stocks believed to be undervalued.

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.

This bar chart shows changes in the performance of the International Fund's
shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
INTERNATIONAL FUND
------------------
<S> <C>
1995 10.78%
1996 16.47
1997 4.48
1998 4.96
1999 39.01
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
21.28% -15.50%
(4TH QTR 99) (3RD QTR 98)
</TABLE>

2
<PAGE> 5

Performance Table

<TABLE>
<CAPTION>
Since
1 Year 3 Years 5 Years Inception*
------ ------- ------- ----------
<S> <C> <C> <C> <C>
INTERNATIONAL FUND 39.01% 15.09% 14.48% 12.97%**
MSCI EAFE INDEX 27.30% 16.06% 13.15% 12.28%
LIPPER INTERNATIONAL
FUND INDEX 37.83% 18.53% 15.96% 14.19%
</TABLE>

* October 1, 1994

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

Principal Risk--The Fund's growth 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.

This bar chart shows changes in the performance of the Growth Fund's shares from
year to year.

[BAR CHART]

<TABLE>
<CAPTION>
GROWTH FUND
-----------
<S> <C>
1990 3.81%
1991 52.70
1992 -2.49
1993 11.62
1994 -3.72
1995 36.64
1996 21.61
1997 25.84
1998 19.84
1999 35.79
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
27.72% -15.83%
(4TH QTR 98) (3RD QTR 98)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
GROWTH FUND 35.79% 26.99% 27.75% 18.91%*
WILSHIRE 5000 INDEX 23.56% 26.04% 27.07% 17.59%
LIPPER GROWTH FUND
INDEX 27.96% 27.23% 26.27% 17.25%
</TABLE>

*Shares of the Fund were offered beginning March 1, 1999. The performance
information shown prior to that date represents performance of the Fund's
predecessor commingled fund which was offered beginning April 1, 1983.

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, secondarily, 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.

3
<PAGE> 6

This bar chart shows changes in the performance of the Growth & Income Fund's
shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
GROWTH & INCOME FUND
--------------------
<S> <C>
1999 26.03%
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
17.62% -6.00%
(4TH QTR 99) (3RD QTR 99)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
1 Year Since Inception*
------ ----------------
<S> <C> <C>
GROWTH & INCOME FUND 26.03% 46.39%**
S&P 500 INDEX 21.03% 39.18%
LIPPER GROWTH & INCOME
FUND INDEX 11.87% 27.07%
</TABLE>

* October 1, 1998

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.
- investing in companies whose stocks are considered "out of favor."

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 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.

4
<PAGE> 7

This bar chart shows changes in the performance of the Equity Income Fund's
shares from year to year. Please note that the Fund was managed by two
subadvisers which were replaced by three new subadvisers in July of 1999.

[BAR CHART]

<TABLE>
<CAPTION>
EQUITY INCOME FUND
------------------
<S> <C>
1995 35.35%
1996 18.29
1997 33.97
1998 16.02
1999 -8.46
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
12.86% -10.40%
(2ND QTR 97) (3RD QTR 99)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
Since
1 Year 3 Years 5 Years Inception*
------ ------- ------- ----------
<S> <C> <C> <C> <C>
EQUITY INCOME FUND -8.46% 12.48% 17.90% 16.09%**
S&P/BARRA VALUE INDEX 12.72% 18.88% 22.94% 20.23%
LIPPER EQUITY INCOME
FUND INDEX 4.19% 13.98% 17.80% 15.83%
</TABLE>

*April 1, 1994

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 has invested 45% to 85% of its assets in common
stocks, although the stock allocation can range from 0-100%. 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:

- allocating among stocks, bonds and cash
- 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

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

The periods prior to March 1, 1999, when the Fund began operating, represent the
performance of a commingled fund that had the same investment objectives and
policies and was advised by an affiliate of the Fund's adviser. This past
performance has been adjusted to reflect current expenses of the Fund. The
commingled fund was not a registered mutual fund so it was not subject to the
same investment and tax restrictions as the Fund. If it had been, the commingled
fund's performance may have been lower.

This bar chart shows changes in the performance of the Asset Allocation Fund's
shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
---------------------
<S> <C>
1990 0.07%
1991 25.86
1992 6.04
1993 10.19
1994 -1.71
1995 29.24
1996 15.74
1997 25.32
1998 22.42
1999 8.22
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
12.61% -8.60%
(4TH QTR 98) (3RD QTR 90)
</TABLE>

5
<PAGE> 8

Performance Table

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
ASSET ALLOCATION FUND 8.22% 18.41% 19.95% 13.64%*
65/25/10 INDEX** 11.42% 19.93% 21.25% 14.58%
LIPPER FLEXIBLE
PORTFOLIO FUND INDEX 9.83% 14.81% 16.37% 12.24%
</TABLE>

**65% S&P 500 Index/25% Lehman Brothers Long Treasury Index/10% 91 day T-bills.

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 net assets in U.S. Treasury
Securities.
- investing up to 35% of the Fund's net assets in 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.

This bar chart shows changes in the performance of the U.S. Treasury Securities
Fund's shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
U.S. TREASURY SECURITIES FUND
-----------------------------
<S> <C>
1993 10.64%
1994 -5.38
1995 18.06
1996 1.69
1997 8.70
1998 9.70
1999 -2.67
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
6.25% -3.46%
(3RD QTR 98) (1ST QTR 94)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
Since
Shares 1 Year 3 Years 5 Years Inception*
------ ------ ------- ------- ----------
<S> <C> <C> <C> <C>
U.S. TREASURY
SECURITIES FUND -2.67% 5.09% 6.86% 5.80%**
MERRILL LYNCH 5-7
YEAR TREASURY INDEX -2.35% 5.64% 7.57% 6.62%
</TABLE>

*July 1, 1992

** Shares of the Fund were offered beginning March 1, 1999. The performance
information shown prior to that date represents performance of the Fund's
predecessor commingled fund which was offered beginning July 1, 1992.

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.

6
<PAGE> 9

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.

Performance Information--Performance varies from year to year and past
performance is not necessarily an indication of future performance. The Money
Market Fund commenced operations on March 1, 1999.

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
those of the Morgan Stanley Capital International Europe, Australia and Far East
Free (EAFE Free) Index and performance that will correlate with the performance
of that index.

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

The periods prior to March 1, 1999, when the Fund began operating, represent the
performance of a commingled fund that had the same investment objective and
policies and was advised by an affiliate of the Fund's adviser. This past
performance has been adjusted to reflect current expenses of the Class I shares
of the Fund. The commingled fund was not a registered mutual fund so it was not
subject to the same investment and tax restrictions as the Fund. If it had been,
the commingled fund's performance may have been lower.

This bar chart shows changes in the performance of the Overseas Equity Index
Fund's Class I shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
OVERSEAS EQUITY INDEX FUND
--------------------------
<S> <C>
1998 19.79%
1999 26.25
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
20.05% -14.12%
(4TH QTR 98) (3RD QTR 98)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
Class I Shares 1 Year Since Inception*
-------------- ------ ----------------
<S> <C> <C>
OVERSEAS EQUITY INDEX FUND 26.25% 15.25%**
MORGAN STANLEY EAFE FREE
INDEX 27.05% 16.30%
</TABLE>

*June 2, 1997

**Class I shares of the Fund were offered beginning March 1, 1999. The
performance information shown prior to that date represents performance of the
Fund's predecessor commingled fund which was offered beginning June 2, 1997.

MID/SMALL COMPANY INDEX FUND

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

Principal Investment Strategy--To invest in a sampling of securities that is
selected and weighted to result in investment characteristics comparable to
those of the Wilshire 5000 Index and performance that will correlate with the
performance of that index.

Principal Risks--The returns on stocks of mid-to small-capitalization companies
tend to be more

7
<PAGE> 10

volatile than the returns on stocks of larger-capitalization companies.

The periods prior to March 1, 1999, when the Fund began operating, represent the
performance of a commingled fund that had the same investment objective and
policies and was advised by an affiliate of the Fund's adviser. This past
performance has been adjusted to reflect current expenses of the Class I shares
of the Fund. The commingled fund was not a registered mutual fund so it was not
subject to the same investment and tax restrictions as the Fund. If it had been,
the commingled fund's performance may have been lower.

This bar chart shows changes in the performance of the Mid/Small Company Index
Fund's Class I shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
MID/SMALL COMPANY INDEX FUND
----------------------------
<S> <C>
1998 7.28%
1999 33.08
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
29.62% -17.78%
(4TH QTR 99) (3RD QTR 98)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
Class I Shares 1 Year Since Inception*
-------------- ------ ----------------
<S> <C> <C>
MID/SMALL COMPANY INDEX
FUND 33.08% 22.52%**
WILSHIRE 4500 INDEX 35.03% 24.09%
</TABLE>

* June 2, 1997

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
those of the Wilshire 5000 Index and performance that will correlate with the
performance of that index.

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.

The periods prior to March 1, 1999, when the Fund began operating, represent the
performance of a commingled fund that had the same investment objective and
policies and was advised by an affiliate of the Fund's adviser. This past
performance has been adjusted to reflect current expenses of the Class I shares
of the Fund. The commingled fund was not a registered mutual fund so it was not
subject to the same investment and tax restrictions as the Fund. If it had been,
the commingled fund's performance may have been lower.

8
<PAGE> 11

This bar chart shows changes in the performance of the Broad Market Index Fund's
Class I shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
BROAD MARKET INDEX FUND
-----------------------
<S> <C>
1990 -4.71%
1991 30.15
1992 7.58
1993 8.49
1994 0.47
1995 35.09
1996 20.75
1997 30.82
1998 22.65
1999 23.43
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
21.42% -14.15%
(4TH QTR 98) (3RD QTR 90)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
Class I Shares 1 Year 3 Years 5 Years 10 Years
-------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
BROAD MARKET INDEX FUND 23.43% 25.58% 26.43% 16.73%*
WILSHIRE 5000 INDEX 23.56% 26.04% 27.07% 17.59%
</TABLE>

*Class I shares of the Fund were offered beginning March 1, 1999. The
performance information shown prior to that date represents performance of the
Fund's predecessor commingled fund which was offered beginning November 1,
1988.

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 replicate, as closely as practical, investment
characteristics of the index.

Principal Risks--The Fund is expected to have the same volatility as the S&P 500
Index.

The periods prior to March 1, 1999, when the Fund began operating, represent the
performance of a commingled fund that had the same investment objectives and
policies and was advised by an affiliate of the Fund's adviser. This past
performance has been adjusted to reflect current expenses of the Class I shares
of the Fund. The commingled fund was not a registered mutual fund so it was not
subject to the same investment and tax restrictions as the Fund. If it had been,
the commingled fund's performance may have been lower.

This bar chart shows changes in the performance of the 500 Stock Index Fund's
Class I shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
500 STOCK INDEX FUND
--------------------
<S> <C>
1998 28.12%
1999 20.52
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
21.18% -9.95%
(4TH QTR 98) (3RD QTR 98)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
Class I Shares 1 Year Since Inception*
-------------- ------ ----------------
<S> <C> <C>
500 STOCK INDEX FUND 20.52% 25.13%**
S&P 500 INDEX 21.04% 25.51%
</TABLE>

*June 2, 1997

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 those of the
Lehman Brothers Government/Corporate Bond Index and performance that will
correlate with the performance of that index.

9
<PAGE> 12

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.

The periods prior to March 1, 1999, when the Fund began operating, represent the
performance of a commingled fund that had the same investment objectives and
policies and was advised by an affiliate of the Fund's adviser. This past
performance has been adjusted to reflect current expenses of the Class I shares
of the Fund. The commingled fund was not a registered mutual fund so it was not
subject to the same investment and tax restrictions as the Fund. If it had been,
the commingled fund's performance may have been lower.

This bar chart shows changes in the performance of the Core Bond Index Fund's
Class I shares from year to year.

[BAR CHART]

<TABLE>
<CAPTION>
CORE BOND INDEX FUND
--------------------
<S> <C>
1998 8.43%
1999 -2.88
</TABLE>

<TABLE>
<S> <C>
BEST QUARTER WORST QUARTER
4.42% -1.52%
(3RD QTR 98) (2ND QTR 99)
</TABLE>

Performance Table

<TABLE>
<CAPTION>
Class I Shares 1 Year Since Inception*
-------------- ------ ----------------
<S> <C> <C>
CORE BOND INDEX FUND -2.88% 4.88%**
LEHMAN BROTHERS
GOVERNMENT/CORPORATE
BOND INDEX -2.15% 5.84%
</TABLE>

*June 2, 1997

10
<PAGE> 13

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 first 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
MAXIMUM ACCOUNT FEE NONE
</TABLE>

The second table shows the annual operating expenses you may pay if you buy and
hold shares of a Fund. 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.

11
<PAGE> 14

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% 0.72% 0.42% 1.24%
INTERNATIONAL 0.10% 0.51% 0.51% 1.12%
GROWTH 0.10% 0.38% 0.39% 0.87%
GROWTH & INCOME 0.10% 0.36% 0.43% 0.89%
EQUITY INCOME 0.10% 0.34% 0.41% 0.85%
ASSET ALLOCATION 0.10% 0.28% 0.41% 0.79%
U.S. TREASURY SECURITIES 0.10% 0.14% 0.43% 0.67%
MONEY MARKET 0.10%* 0.09% 0.42% 0.61%

OVERSEAS EQUITY INDEX++
CLASS I 0.20% N/A 0.47% 0.67%
CLASS II ** 0.20% N/A 0.27% 0.47%

MID/SMALL CO. INDEX++
CLASS I 0.15% N/A 0.37% 0.52%
CLASS II ** 0.15% N/A 0.17% 0.32%

BROAD MARKET INDEX++
CLASS I 0.13% N/A 0.33% 0.46%
CLASS II ** 0.13% N/A 0.13% 0.26%

500 STOCK INDEX++
CLASS I 0.10% N/A 0.34% 0.44%
CLASS II ** 0.10% N/A 0.14% 0.24%

CORE BOND INDEX++
CLASS I 0.13% N/A 0.34% 0.47%
CLASS II ** 0.13% N/A 0.14% 0.27%
</TABLE>

++ 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%.
** Amounts shown are equivalent to the total expenses that will be paid by Class
II shareholders. Please see page 28 for the eligibility criteria for Class II
shares.

12
<PAGE> 15

EXAMPLE

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

This example assumes that you invest $10,000 in a Fund 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 5 YRS 10 YRS
----- ---- ----- ----- ------
<S> <C> <C> <C> <C>
AGGRESSIVE OPPORTUNITIES $127 $396 $685 $1,507
INTERNATIONAL $115 $358 $620 $1,369
GROWTH $ 89 $279 $484 $1,076
GROWTH & INCOME $ 91 $285 $495 $1,100
EQUITY INCOME $ 87 $272 $473 $1,052
ASSET ALLOCATION $ 81 $253 $440 $ 981
U.S. TREASURY SECURITIES $ 69 $215 $374 $ 837
MONEY MARKET $ 63 $196 $341 $ 764

OVERSEAS EQUITY INDEX
CLASS I $ 69 $215 $374 $ 837
CLASS II ** $ 48 $151 $264 $ 593

MID/SMALL CO. INDEX
CLASS I $ 53 $167 $291 $ 654
CLASS II ** $ 33 $103 $180 $ 406

BROAD MARKET INDEX
CLASS I $ 47 $148 $258 $ 580
CLASS II ** $ 27 $ 84 $146 $ 331

500 STOCK INDEX
CLASS I $ 45 $142 $247 $ 555
CLASS II ** $ 25 $ 77 $135 $ 306

CORE BOND INDEX
CLASS I $ 48 $151 $264 $ 593
CLASS II ** $ 28 $ 87 $152 $ 344
</TABLE>

** Amounts shown are equivalent to the total expenses that will be paid by Class
II shareholders. Please see page 28 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.

13
<PAGE> 16

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, 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 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.

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.

INVESTMENT SUBADVISERS--The Fund is managed by multiple subadvisers:

First Pacific Advisors, Inc. ("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

14
<PAGE> 17

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.

MFS Institutional Advisors, Inc. ("MFS") (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 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 Investment Management Company ("TCW") (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. TCW 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 of 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 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 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.

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--The fund is managed by multiple subadvisers:

Capital Guardian Trust Company ("Capital Guardian") (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 ("Lazard") (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.

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

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

15
<PAGE> 18

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.

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--The Fund is managed by multiple subadvisers:

Barclays Global Fund Advisors ("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 500 Index.

Fidelity Management Trust Company ("Fidelity") (Boston, Massachusetts) serves as
a subadviser to the Fund. 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.

TCW Investment Management Company ("TCW") (Los Angeles, California) serves as a
subadviser to the fund. Glen Bickerstaff serves as portfolio manager. Mr.
Bickerstaff has 19 years of experience as a portfolio manager and joined TCW in
1998. TCW follows a concentrated growth investment style which stresses the
stocks of larger companies that TCW believes have superior business models, and
are judged to be beneficiaries of secular market changes.

Tukman Capital Management, Inc. ("Tukman") (Larkspur, California) serves as a
subadviser to the Fund. Melvin T. Tukman serves as portfolio manager. Mr. Tukman
has over 30 years of experience as a portfolio manager, and he founded the firm
in 1980. Tukman follows a contrarian investment style that focuses on stocks
that they believe exhibit strong fundamentals and are currently undervalued due
to investor neglect or anxiety.

Brown Capital Management, Inc. ("Brown") (Baltimore, Maryland) serves as a
subadviser to the Fund. Eddie Brown, CFA serves as portfolio manager. Mr. Brown
has 28 years of experience as a portfolio manager and he founded the firm in
1983. Brown follows a growth-at-a-reasonable price investment style, that
selects stocks of mid- to large-sized companies that they believe have the
potential for earnings growth and are selling at a lower price relative to the
market.

William Blair & Company, L.L.C. ("William Blair") (Chicago, Illinois) will serve
as a subadviser to the Fund until May 8, 2000. 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.

As of May 8, 2000, Atlanta Capital Management ("Atlanta") will serve as
subadviser to the Fund. Atlanta uses a team portfolio management approach with
Dan Boone, III, Marilyn R. Irvin, and Bill Hackney serving on the team. Mr.
Boone, Ms. Irvine and Mr. Hackney have been with Atlanta for 24 years, 11 years,
and 5 years respectively. Atlanta pursues growth of capital from a diversified
portfolio of high quality companies. Growth potential is identified from both a
top-
16
<PAGE> 19

down (economic and sector) approach as well as a bottom-up company specific
approach.

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 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.

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--The Fund is managed by multiple 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 invests in are stocks of companies of any size that they believe
have potential for growth that is not recognized by the market.

Putnam Investment Management, Inc. ("Putnam") (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.

Wellington Management Company, LLP ("Wellington") (Boston, Massachusetts) serves
as a subadviser to the Fund. John R. Ryan, CFA serves as portfolio manager. Mr.
Ryan began his investment career in 1969 and has been with Wellington since
1981. Wellington seeks to achieve the Fund's objective by investing in large
capitalization companies, which are selling at attractive prices relative to
their upside potential.

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.

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 sectors and/or 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 is expected to be equal to, or lower than that of the S&P
500 Index.

17
<PAGE> 20

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

Barrow, Hanley, Mewhinney & Strauss, Inc. ("BHM&S") (Dallas, Texas) serves as a
subadviser to the Fund. Richard A. Englander serves as portfolio manager. Mr.
Englander began his career as a portfolio manager in 1963 and joined BHM&S in
1985. BHM&S follows a value-oriented investment approach which stresses active
management through a process of individual stock selection on a bottom-up basis.

T. Rowe Price Associates, Inc. ("T. Rowe Price") (Baltimore, Maryland) serves as
a subadviser to the Fund. Brian C. Rogers, CFA, CIC serves as portfolio manager.
Mr. Rogers has over 20 years of experience as a portfolio manager and has been
with T. Rowe Price since 1981. T. Rowe Price seeks to achieve the Fund's
objective by investing in securities that display above-market yield and
below-market valuation.

Wellington Management Company, LLP ("Wellington") (Boston, Massachusetts) serves
as a subadviser to the Fund. Stephen O'Brien, CFA serves as portfolio manager.
Mr. O'Brien began his investment career in 1969 and has been with Wellington
since 1982. Wellington seeks to achieve the Fund's objective by investing in
large capitalization companies, that are selling at attractive prices relative
to their earnings potential and offer current income.

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 it 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 is passively managed to approximate
the investment characteristics and performance of the Lehman Brothers Long
Treasury Index; 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 Investors Associates Corp. ("Avatar") (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.

Mellon Capital Management Corp. ("Mellon") (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 U.S. Treasury
securities, or to money

18
<PAGE> 21

market instruments, although shifts more typically occur incrementally.

Wilshire Asset Management ("Wilshire") (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 ("Payden & Rygel") (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

GENERAL DESCRIPTION AND GOALS--The U.S. Treasury Securities Fund seeks 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.

INVESTMENT STRATEGY--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 U.S. Treasury securities.
In addition, the subadviser is authorized to invest up to 35 percent of the net
assets 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 intermediate term
portfolio.

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

INVESTMENT SUBADVISER--The Fund's subadviser, Seix Investment Advisors, 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.

MONEY MARKET FUND

GENERAL DESCRIPTION AND GOALS--The Money Market Fund seeks 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
will meet the diversification and quality provisions of Rule 2a-7 under the
Investment Company Act of 1940.

INVESTMENT RISKS--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.

INVESTMENT STRATEGY--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

19
<PAGE> 22

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 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 "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 managed by 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 approximate the weighted capitalization 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 may deviate more than that of Funds investing in all of the
securities contained in a benchmark.

Performance of the Index Funds will differ from that of the underlying indexes
for several reasons. First, fees are netted against Fund performance, while the
indexes themselves bear no management fees, transaction costs, or other
expenses. Second, due to sampling techniques used by all the Index Funds except
the 500 Stock Index Fund, there will be tracking error, which may impact Fund
performance positively or negatively. Third, the timing of cash flows into and
out of the Funds will affect the ability to precisely track the underlying
indexes.

The Master Portfolios maintain equity exposure for cash balances by purchasing
appropriate futures contracts. Futures contracts are not used for leverage. 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.

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."

- ---------------
(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.
20
<PAGE> 23

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 invests in a Master
Portfolio that invests 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 invests 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 invests in a Master Portfolio
that invests in two other Master Portfolios managed by 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 invests 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 S&P 500 Index.

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.

21
<PAGE> 24

INVESTMENT STRATEGY--The Core Bond Index Fund invests in a Master Portfolio that
invests in a sampling of securities contained in the Lehman Brothers
Government/Corporate Bond 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. 23 for a
detailed discussion of credit risk.

22
<PAGE> 25

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.

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
(1926-1999)

<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS 20 YEARS
------ ------- -------- --------
<S> <C> <C> <C> <C>
BEST 52.99% 28.55% 20.06% 17.87%
WORST -43.34% -12.47% -0.89% 3.11%

AVERAGE 13.28% 10.99% 11.13% 11.18%
</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 bonds held by the Core Bond Index Fund,
are generally considered to carry moderate credit risk.

23
<PAGE> 26

Corporate bonds rated lower than 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 subadvisers, or the
investment adviser to the Master Portfolios with respect to the Index Funds,
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 style 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.

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, VIA selects the Master Portfolios in which each
Index Fund invests. Effective May 8, 2000 the Funds have received an exemptive
order from the SEC that allows VIA to change subadvisers with the approval

24
<PAGE> 27

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 fees paid to VIA
and the subadvisers for the period from March 1, 1999 to December 31, 1999 are
as follows:

<TABLE>
<CAPTION>
Funds Advisory Fee Paid*
----- ------------------
<S> <C>
AGGRESSIVE OPPORTUNITIES 0.85%
INTERNATIONAL 0.63%
GROWTH 0.41%
GROWTH AND INCOME 0.51%
EQUITY INCOME 0.35%
ASSET ALLOCATION 0.39%
U.S. TREASURY SECURITIES 0.22%
MONEY MARKET 0.18%
OVERSEAS EQUITY INDEX 0.25%
MID/SMALL COMPANY INDEX 0.15%
BROAD MARKET INDEX 0.13%
500 STOCK INDEX 0.10%
CORE BOND INDEX 0.13%
</TABLE>

*Consists of Advisory Fee plus the appropriate subadviser fee

The fees charged by each subadviser to the Funds 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, 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 16 years of experience in investment management, 6 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.

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.

25
<PAGE> 28

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 Gilding Director Chief Investment Officer
New York, NY City of New York Pensions
Robert A. Bowman Director Chief Executive Officer, Outpost.com;
Westport, CT President, Chief Operating Officer and
Director (1995-1998)
Chief Financial Officer (1992-1995)
ITT Corporation
Formerly: State Treasurer State of
Michigan
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 Director -- Universal Corporation
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.

26
<PAGE> 29

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 is valued daily by the
Master Portfolio itself, and each Index Fund's investment in the underlying
Master Portfolio 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

27
<PAGE> 30

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

The Funds are 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 $30
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 $75 million with an average participant balance of at least $35
thousand; 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 $30 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 the 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

28
<PAGE> 31

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 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).

29
<PAGE> 32

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

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

DISTRIBUTION ARRANGEMENTS
- ----------------------------------------------------

ICMA-RC Services, LLC (RC Services) serves as distributor to the Funds. RC
Services receives no compensation for its services as distributor.

30
<PAGE> 33

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
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.

31
<PAGE> 34

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

The following financial highlights table is intended to help you understand a
Fund's performance for the period of the Fund's operation. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report along with the financial statements and related notes, appears in
the 1999 Annual Report which is available upon request.

FOR THE PERIOD FROM MARCH 1, 1999 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31,
1999.
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH & EQUITY ASSET U.S. TREASURY
OPPORTUNITIES INTERNATIONAL GROWTH INCOME INCOME ALLOCATION SECURITIES
------------- ------------- ---------- -------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................. $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss).................. (0.04) 0.08 0.00* 0.01 0.18 0.24 0.44
Net realized and
unrealized gain (loss)
on investments and
futures and foreign
currency transactions... 6.34 4.15 3.95 2.31 (0.68) 0.62 (0.50)
-------- -------- ---------- -------- -------- ---------- -------
TOTAL FROM INVESTMENT
OPERATIONS................ 6.30 4.23 3.95 2.32 (0.50) 0.86 (0.06)
-------- -------- ---------- -------- -------- ---------- -------
LESS DISTRIBUTIONS:
From net investment
income.................. (0.00) (0.15) (0.00)* (0.01) (0.18) (0.24) (0.44)
From net realized gains... (0.48) (0.32) (0.74) (0.46) (2.16) (0.13) (0.00)
-------- -------- ---------- -------- -------- ---------- -------
TOTAL DISTRIBUTIONS......... (0.48) (0.47) (0.74) (0.47) (2.34) (0.37) (0.44)
-------- -------- ---------- -------- -------- ---------- -------
NET ASSET VALUE, END OF
PERIOD.................... $ 15.82 $ 13.76 $ 13.21 $ 11.85 $ 7.16 $ 10.49 $ 9.50
======== ======== ========== ======== ======== ========== =======
Total return++.............. 63.39% 42.62% 40.03% 23.50% (4.60)% 8.61% (0.66)%
Ratios/Supplemental data:
Net assets, end of period
(000)................... $631,505 $316,937 $3,361,695 $235,062 $486,690 $1,100,101 $76,468
Number of shares
outstanding, end of
period (000)............ 39,924 23,039 254,497 19,833 67,988 104,874 8,052
Ratios to average net
assets:
Ratio of expenses to
average net assets+..... 1.28% 1.12% 0.80% 0.94% 0.75% 0.80% 0.66%
Ratio of net investment
income (loss) to average
net assets+............. (0.48)% 0.86% (0.01)% 0.17% 2.08% 2.68% 5.26%
Portfolio turnover++........ 50% 29% 129% 51% 77% 6% 176%
(1) Ratio of expenses to
average net assets prior
to expense reductions and
reimbursed expenses+...... 1.28% 1.14% 0.81% 0.96% 0.76% N/A N/A
(2) Ratio of net investment
income (loss) to average
net assets prior to
expense reductions and
reimbursed expenses+...... (0.48)% 0.84% (0.02)% 0.15% 2.07% N/A N/A

<CAPTION>
MONEY
MARKET
-------
<S> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................. $ 1.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss).................. 0.04
Net realized and
unrealized gain (loss)
on investments and
futures and foreign
currency transactions... 0.00
-------
TOTAL FROM INVESTMENT
OPERATIONS................ 0.04
-------
LESS DISTRIBUTIONS:
From net investment
income.................. (0.04)
From net realized gains... (0.00)
-------
TOTAL DISTRIBUTIONS......... (0.04)
-------
NET ASSET VALUE, END OF
PERIOD.................... $ 1.00
=======
Total return++.............. 4.00%
Ratios/Supplemental data:
Net assets, end of period
(000)................... $76,773
Number of shares
outstanding, end of
period (000)............ 76,773
Ratios to average net
assets:
Ratio of expenses to
average net assets+..... 0.55%
Ratio of net investment
income (loss) to average
net assets+............. 4.70%
Portfolio turnover++........ N/A
(1) Ratio of expenses to
average net assets prior
to expense reductions and
reimbursed expenses+...... 0.60%
(2) Ratio of net investment
income (loss) to average
net assets prior to
expense reductions and
reimbursed expenses+...... 4.65%
</TABLE>

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

* --Rounds to less than .01
+ --Annualized
++ --Not annualized

32
<PAGE> 35

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
OVERSEAS EQUITY INDEX MID/ SMALL COMPANY INDEX
-------------------------------------- ---------------------------------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
FROM MARCH 1, FROM APRIL 5, FROM MARCH 1, FROM APRIL 5,
1999 (COM- 1999 (COM- 1999 (COM- 1999 (COM-
MENCEMENT OF MENCEMENT OF MENCEMENT OF MENCEMENT OF
OPERATIONS) TO OPERATIONS) TO OPERATIONS) TO OPERATIONS) TO
DECEMBER 31, 1999 DECEMBER 31, 1999 DECEMBER 31, 1999 DECEMBER 31, 1999
----------------- ------------------ ------------------ ------------------
CLASS I CLASS II CLASS I CLASS II
----------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD..................... $ 10.00 $10.00 $ 10.00 $10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)................... 0.11 0.15 0.06 0.07
Net realized and unrealized
gain (loss) on
investments and futures
and foreign currency
transactions............. 2.88 2.30 4.02 3.48
------- ------ ------- ------
TOTAL FROM INVESTMENT
OPERATIONS................. 2.99 2.45 4.08 3.55
------- ------ ------- ------
LESS DISTRIBUTIONS:
From net investment
income................... (0.17) (0.19) (0.06) (0.08)
From net realized gains.... (0.07) (0.07) (0.10) (0.10)
------- ------ ------- ------
TOTAL DISTRIBUTIONS.......... (0.24) (0.26) (0.16) (0.18)
------- ------ ------- ------
NET ASSET VALUE, END OF
PERIOD..................... $ 12.75 $12.19 $ 13.92 $13.37
======= ====== ======= ======
Total return++............... 30.03% 24.59% 40.90% 35.64%
Ratios/Supplemental data:
Net assets, end of period
(000).................... $48,416 $8,623 $21,548 $9,296
Number of shares
outstanding, end of
period (000)............. 3,798 708 1,548 695
Ratios to average net assets:
Ratio of expenses to
average net assets+...... 0.95% 0.75% 0.60% 0.40%
Ratio of net investment
income (loss) to average
net assets+.............. 1.17% 1.53% 0.75% 0.97%
Portfolio turnover++......... N/A N/A N/A N/A
(1) Ratio of expenses to
average net assets prior to
expense reductions and
reimbursed expenses+....... N/A N/A N/A N/A
(2) Ratio of net investment
income (loss) to average
net assets prior to expense
reductions and reimbursed
expenses+.................. N/A N/A N/A N/A

<CAPTION>
BROAD MARKET INDEX
-------------------------------------
FOR THE PERIOD FOR THE PERIOD
FROM MARCH 1, FROM APRIL 5,
1999 (COM- 1999 (COM-
MENCEMENT OF MENCEMENT OF
OPERATIONS) TO OPERATIONS) TO
DECEMBER 31, 1999 DECEMBER 31, 1999
----------------- -----------------
CLASS I CLASS II
----------------- -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD..................... $ 10.00 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)................... 0.10 0.09
Net realized and unrealized
gain (loss) on
investments and futures
and foreign currency
transactions............. 2.30 1.80
-------- --------
TOTAL FROM INVESTMENT
OPERATIONS................. 2.40 1.89
-------- --------
LESS DISTRIBUTIONS:
From net investment
income................... (0.09) (0.11)
From net realized gains.... (0.10) (0.10)
-------- --------
TOTAL DISTRIBUTIONS.......... (0.19) (0.21)
-------- --------
NET ASSET VALUE, END OF
PERIOD..................... $ 12.21 $ 11.68
======== ========
Total return++............... 24.07% 19.01%
Ratios/Supplemental data:
Net assets, end of period
(000).................... $519,581 $163,050
Number of shares
outstanding, end of
period (000)............. 42,539 13,963
Ratios to average net assets:
Ratio of expenses to
average net assets+...... 0.46% 0.26%
Ratio of net investment
income (loss) to average
net assets+.............. 0.99% 1.18%
Portfolio turnover++......... N/A N/A
(1) Ratio of expenses to
average net assets prior to
expense reductions and
reimbursed expenses+....... N/A N/A
(2) Ratio of net investment
income (loss) to average
net assets prior to expense
reductions and reimbursed
expenses+.................. N/A N/A
</TABLE>

- ------------------
+ --Annualized
++ --Not annualized

33
<PAGE> 36

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>
<CAPTION>
500 STOCK INDEX CORE BOND INDEX
------------------------------------- -------------------------------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
FROM MARCH 1, FROM APRIL 5, FROM MARCH 1, FROM APRIL 5,
1999 (COM- 1999 (COM- 1999 (COM- 1999 (COM-
MENCEMENT OF MENCEMENT OF MENCEMENT OF MENCEMENT OF
OPERATIONS) TO OPERATIONS) TO OPERATIONS) TO OPERATIONS) TO
DECEMBER 31, 1999 DECEMBER 31, 1999 DECEMBER 31, 1999 DECEMBER 31, 1999
----------------- ----------------- ----------------- -----------------
CLASS I CLASS II CLASS I CLASS II
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 10.00 $ 10.00 $ 10.00 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss).................... 0.09 0.08 0.49 0.45
Net realized and unrealized gain (loss) on
investments and futures and foreign currency
transactions.................................. 1.86 1.36 (0.59) (0.57)
-------- -------- -------- -------
TOTAL FROM INVESTMENT OPERATIONS.................. 1.95 1.44 (0.10) (0.12)
-------- -------- -------- -------
LESS DISTRIBUTIONS:
From net investment income...................... (0.07) (0.09) (0.49) (0.45)
From net realized gains......................... (0.03) (0.03) (0.00) (0.00)
-------- -------- -------- -------
TOTAL DISTRIBUTIONS............................... (0.10) (0.12) (0.49) (0.45)
-------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD.................... $ 11.85 $ 11.32 $ 9.41 $ 9.43
======== ======== ======== =======
Total return...................................... 19.52% 14.44% (1.05)% (1.19)%
Ratios/Supplemental data:
Net assets, end of period (000)................. $135,372 $119,236 $261,607 $48,288
Number of shares outstanding, end of period
(000)......................................... 11,428 10,532 27,796 5,118
Ratios to average net assets:
Ratio of expenses to average net assets+........ 0.44% 0.24% 0.47% 0.27%
Ratio of net investment income (loss) to average
net assets+................................... 1.04% 1.23% 5.99% 6.26%
Portfolio turnover++.............................. N/A N/A N/A N/A
(1) Ratio of expenses to average net assets prior
to expense reductions and reimbursed
expenses+....................................... N/A N/A N/A N/A
(2) Ratio of net investment income (loss) to
average net assets prior to expense reductions
and reimbursed expenses+........................ N/A N/A N/A N/A
</TABLE>

- ------------------
+ --Annualized
++ --Not annualized

34
<PAGE> 37

The Statement of Additional
Information ("SAI") includes
additional information about the
Vantagepoint Funds. The SAI has been
filed with the Securities and Exchange
Commission ("SEC") and is incorporated
by reference into this prospectus.
This means that the SAI, for legal
purposes, is part of this prospectus.

Additional information about the
Funds' investments is available in the
annual and semi-annual reports to
shareholders. In the Funds' annual
report, you will find a discussion of
the market conditions and investment
strategies that significantly affected
the Funds' performance during its last
year.

You can obtain a free copy of the SAI
and the most recent annual or
semi-annual report by calling
1-800-669-7400. You may also call
1-800-669-7400 to request other
information or to make shareholder
inquiries.

Information about the Fund (including
the SAI) can be reviewed and copied at
the Securities and Exchange
Commission's Public Reference Room in
Washington, D.C., or from the EDGAR
Database on the SEC's website
(http://www.sec.gov). Information on
the operation of the Public Reference
Room may be obtained by calling the
Commission at 1-202-942-8090. Copies
of this information may be obtained
upon payment of a duplicating fee, by
writing to: Securities and Exchange
Commission, Public Reference Section,
Washington, D.C. 20549-0102. You may
also obtain this information, upon
payment of a duplicating fee, by
e-mailing the SEC at the following
address: [email protected].

Reports and other information about
the Funds are also available on the
Commission's Internet site at
http://www.sec.gov.

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

[RECYCLE LOGO]
THIS PROSPECTUS IS PRINTED ENTIRELY ON
RECYCLED PAPER.
<PAGE> 38
THE VANTAGEPOINT FUNDS

STATEMENT OF ADDITIONAL INFORMATION

MAY 1, 2000
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 ("SAI") 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, dated May 1,
2000 respectively. A copy of the prospectus may be obtained by writing to the
Funds or calling 1-800-669-7400.

The Funds' most recent financial statements are included in the Audited Annual
Report which is herein incorporated by reference to this SAI. A copy of this
Annual Report must accompany this SAI.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Objectives & Policies........................................... 2
Management of The Vantagepoint Funds....................................... 7
Control Persons and Principal Holders of Securities........................ 8
Investment Advisory and Other Services..................................... 8
Portfolio Transactions..................................................... 12
Capital Stock and Other Securities......................................... 13
Purchase, Redemption, and Pricing of Shares................................ 14
Taxation of the Fund....................................................... 15
Calculation of Performance Data............................................ 15
Legal Counsel, Independent Auditors, & Custodian........................... 17
Financial Statements....................................................... 17
</TABLE>

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 on July 28, 1998. 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, VIA selects
the Master Portfolios in which each Index Fund invests. The Vantagepoint Funds
are as follows:

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

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.

1
<PAGE> 39

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 Investments 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
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").

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"), nor are
the Broad Market Index or Mid/Small Company Index Funds sponsored, endorsed,
sold, or promoted 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 4500 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.

2
<PAGE> 40

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 ("S&P 500 Index") -- consists of 500 companies
representing larger capitalization stocks traded in the U.S.

Standard & Poor's/BARRA Value Index -- a subset of the S & P 500 Index that
includes stocks with lower price-to-book ratios.

Wilshire 5000 Equity Index -- consists of common equity securities of companies
domiciled in the U.S. for which daily pricing is available; the broadest measure
of the U.S. equity market.

Wilshire 4500 Equity Index -- consists of all stocks in the Wilshire 5000 except
for those included in the Standard & Poor's 500 Index; represents mid- and
small- capitalization companies.

Morgan Stanley Capital International EAFE Index ("EAFE" Index) -- consists of
approximately 1,100 securities listed on the stock exchanges of developed
markets of countries in Europe, Australia and the Far East.

Morgan Stanley Capital International EAFE Free Index -- ("EAFE Free Index") A
subset of the EAFE Index that excludes securities that are not available for
purchase by foreign 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.

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 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. Such instruments are considered as the same type of security in which a
Fund invests primarily for the purpose of any limitations set forth here or in
the prospectus.

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.

3
<PAGE> 41

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);

(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

4
<PAGE> 42

(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).

THE INDEX FUNDS

Each Index Fund is managed by Barclays using quantitative, structured and
passive management techniques. Each such 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 (see page 6 for a description of the Master
Portfolio's policies).

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 Overseas Equity Index Fund's Master Portfolio is the International Index
Master Portfolio which seeks to match the total return performance of an
international portfolio of common stocks represented by the EAFE Free 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 Overseas Equity Index Fund
invests exclusively in the International Index Master 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 Overseas Equity, 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.

FUNDAMENTAL OPERATING POLICIES OF THE MASTER PORTFOLIO

The Master Portfolio is subject to the following fundamental investment
limitations which cannot be changed without approval by the holders of a
majority (as defined in the 1940 Act) of the Master Portfolio's outstanding
voting securities. To obtain approval, a majority of the Master Portfolio's
outstanding voting securities means the vote of the lesser of: (1) 67% or more
of the voting securities present, if more than 50% of the outstanding voting
securities are present or represented, or (2) more than 50% of the outstanding
voting shares.

The Master Portfolio may not:

1. invest more than 5% of its assets in the obligations of any single issuer,
except that up to 25% of the value of its total assets may be invested, and
securities issued or guaranteed by the U.S. government, or its agencies or
instrumentalities may be purchased, without regard to any such limitation.
This limitation does not apply to foreign currency transactions including,
without limitation, foreign currency contracts.

2. hold more than 10% of the outstanding voting securities of any single
issuer. This investment restriction applies only with respect to 75% of its
total assets.

3. invest in commodities, except that the Master Portfolio may purchase and
sell (i.e., write) options, forward contracts, futures contracts, including
those relating to indexes, and options on futures contracts or indexes.

4. purchase, hold or deal in real estate, or oil, gas or other mineral leases
or exploration or development programs, but the Master

5
<PAGE> 43

Portfolio may purchase and sell securities that are secured by real estate
or issued by companies that invest or deal in real estate.

5. borrow money, except to the extent permitted under the 1940 Act, provided
that the Master Portfolio may borrow up to 20% of the current value of its
net assets for temporary purposes only in order to meet redemptions, and
these borrowings may be secured by the pledge of up to 20% of the current
value of its net assets. For purposes of this investment restriction, the
Master Portfolio's entry into options, forward contracts, futures
contracts, including those relating to indexes, and options on futures
contracts or indexes shall not constitute borrowing to the extent certain
segregated accounts are established and maintained by the Master Portfolio.

6. make loans to others, except through the purchase of debt obligations and
the entry into repurchase agreements. However, the Master Portfolio may
lend its portfolio securities in an amount not to exceed one-third of the
value of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the SEC and the Master Portfolio's
Board of Trustees.

7. act as an underwriter of securities of other issuers, except to the extent
that the Master Portfolio may be deemed an underwriter under the Securities
Act of 1933, as amended, by virtue of disposing of portfolio securities.

8. invest 25% or more of its total assets in the securities of issuers in any
particular industry or group of closely related industries except that, in
the case of the Master Portfolio, there shall be no limitation with respect
to investments in (i) obligations of the U.S. government, its agencies or
instrumentalities; or (ii) any industry in which the EAFE Free Index
becomes concentrated to the same degree during the same period, the Master
Portfolio will be concentrated as specified above only to the extent the
percentage of its assets invested in those categories of investments is
sufficiently large that 25% or more of its total assets would be invested
in a single industry.

9. issue any senior security (as such term is defined in Section 18(f) of the
1940 Act), except to the extent the activities permitted in the Master
Portfolio's fundamental policies (3) and (5) may be deemed to give rise to
a senior security.

10. purchase securities on margin, but the Master Portfolio may make margin
deposits in connection with transactions in options, forward contracts,
futures contracts, including those related to indexes, and options on
futures contracts or indexes.

Non-Fundamental Investment Restrictions. The Master Portfolio has adopted the
following investment restrictions as non-fundamental policies. These
restrictions may be changed without shareholder approval by vote of a majority
of the Trustees of MIP, at any time. The Master Portfolio is subject to the
following investment restrictions, all of which are non-fundamental policies.

(1) The Master Portfolio may invest in shares of other open-end management
investment companies, subject to the limitations of Section 12(d)(1) of the 1940
Act. Under the 1940 Act, the Master Portfolio's investment in such securities
currently is limited, subject to certain exceptions, to (i) 3% of total voting
stock of any one investment company, (ii) 5% of the Master Portfolio's net
assets with respect to any one investment company, and (iii) 10% of the Master
Portfolio's net assets in the aggregate. Other investment companies in which the
Master Portfolio invests can be expected to charge fees for operating expenses,
such as investment advisory and administration fees, that would be in addition
to those charged by the Master Portfolio.

(2) The Master Portfolio may not invest more than 15% of its net assets in
illiquid securities. For this purpose, illiquid securities include, among
others, (a) securities that are illiquid by virtue of the absence of a readily
available market or legal or contractual restrictions on resale, (b) fixed time
deposits that are subject to withdrawal penalties and that have maturities of
more than seven days, and (c) repurchase agreements not terminable within seven
days.

(3) The Master Portfolio may lend securities from its portfolio to brokers,
dealers, and financial institutions, in amounts not to exceed (in the aggregate)
one-third of the Master Portfolio's total assets. Any such loans of portfolio
securities will be fully collateralized based on values that are marked to
market daily. The Master Portfolio will not enter into any portfolio security
lending arrangement having a duration of longer than one year.

NON-FUNDAMENTAL OPERATING POLICIES OF THE MASTER PORTFOLIO ("FUND")

The following are the Master Portfolio ("Fund") non-fundamental operating
policies which may be changed by the Fund's Board of Directors without
shareholder approval.

Unless indicated otherwise below, the Fund may not:

1. Sell securities short, unless the Fund owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short, or
unless it covers such short sale as required by the current rules and
positions of the Securities and Exchange Commission

6
<PAGE> 44

("SEC") or its staff, and provided that transactions in options, futures
contracts, options on futures contracts, or other derivative instruments
are not deemed to constitute selling securities short.

2. Purchase securities on margin, except that the Fund may obtain such
short-term credits as are necessary for the clearance of transactions; and
provided that margin deposits in connection with futures contracts, options
on futures contracts, or other derivative instruments shall not constitute
purchasing securities on margin.

3. Invest in illiquid securities if, as a result of such investment, more than
15% (10% with respect to a money fund) of its net assets would be invested
in illiquid securities, or such other amounts as may be permitted under the
1940 Act.

4. Purchase securities of other investment companies except in compliance with
the 1940 Act and applicable state law.

5. Invest all of its assets in the securities of a single open-end investment
management company with substantially the same fundamental investment
objective, restrictions and policies as the Fund.

6. Engage in futures or options on futures transactions which are
impermissible pursuant to Rule 4.5 under the Commodity Exchange Act and, in
accordance with Rule 4.5, will use futures or options on futures
transactions solely for bona fide hedging transactions (within the meaning
of the Commodity Exchange Act), provided, however, that the Fund may, in
addition to bona fide hedging transactions, use futures and options on
futures transactions if the aggregate initial margin and premiums required
to establish such positions, less the amount by which any such options
positions are in the money (within the meaning of the Commodity Exchange
Act), do not exceed 5% of the Fund's net assets.

7. Borrow money except (1) from banks or (2) through reverse repurchase
agreements or mortgage dollar rolls, and will not purchase securities when
bank borrowings exceed 5% of its total assets.

8. Make any loans other than loans of portfolio securities, except through (1)
purchases of debt securities or other debt instruments, or (2) engaging in
repurchase agreements.

Non-Fundamental Policy No. 5 does not apply because the Fund seeks to achieve
its investment objective by investing substantially all of its assets in the
Master Portfolio of MIP.

Unless noted otherwise, if a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a change
in the Fund's assets (i.e. due to cash inflows or redemptions) or in market
value of the investment or the Fund's assets will not constitute a violation of
that restriction.

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 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".

7
<PAGE> 45

The Vantagepoint Funds have adopted an Insider Trading Policy that is designed
to comply with the requirements of Rule 17j-1 of the Investment Company Act of
1940. This policy permits fund personnel to engage in personal securities
transactions subject to certain conditions and limitations. Fund personnel who
have access to fund trading information as part of their jobs must obtain prior
approval from the Fund's Compliance Officer. The policy is on public file with
the Securities and Exchange Commission.

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

The principal shareholder in the Vantagepoint Funds is 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 owns a majority of the outstanding shares of
each Fund and is therefore considered a "control" person for purposes of the
Investment Company Act of 1940.

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.

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 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>

8
<PAGE> 46

VIA received the following investment advisory fees for the fiscal period ended
December 31, 1999:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Advisory Fees Paid
- ------------------------------------------------------------------------------------------
<S> <C>
Aggressive Opportunities $ 301,479
- ------------------------------------------------------------------------------------------
International 174,734
- ------------------------------------------------------------------------------------------
Growth 1,985,662
- ------------------------------------------------------------------------------------------
Growth & Income 133,407
- ------------------------------------------------------------------------------------------
Equity Income 410,089
- ------------------------------------------------------------------------------------------
Asset Allocation 816,758
- ------------------------------------------------------------------------------------------
U.S. Treasury Securities 62,708
- ------------------------------------------------------------------------------------------
Money Market* 49,099
- ------------------------------------------------------------------------------------------
Overseas Equity Index 17,067
- ------------------------------------------------------------------------------------------
Mid/Small Company Index 7,240
- ------------------------------------------------------------------------------------------
Broad Market Index 221,418
- ------------------------------------------------------------------------------------------
500 Stock Index 72,566
- ------------------------------------------------------------------------------------------
Core Bond Index 107,980
- ------------------------------------------------------------------------------------------
</TABLE>

* VIA WAIVED $24,715 of its fees for the period.
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:

FEE FOR FEE FOR
INVESTOR SERVICES FUND SERVICES
All Funds except ----------------- -------------
the Index Funds 0.20% 0.15%

Index Funds
Class I 0.15% 0.15%
-------
Class II 0.05% 0.05%
--------

VIA or VTA received the following fees for administrative services for the
fiscal period ended December 31, 1999:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Amount Received
- ------------------------------------------------------------------------------------------
<S> <C>
Aggressive Opportunities $ 1,051,232
- ------------------------------------------------------------------------------------------
International 613,774
- ------------------------------------------------------------------------------------------
Growth 7,155,685
- ------------------------------------------------------------------------------------------
Growth & Income 465,427
- ------------------------------------------------------------------------------------------
Equity Income 1,428,709
- ------------------------------------------------------------------------------------------
Asset Allocation 2,845,926
- ------------------------------------------------------------------------------------------
U.S. Treasury Securities 218,386
- ------------------------------------------------------------------------------------------
Money Market 171,166
- ------------------------------------------------------------------------------------------
Overseas Equity Index 90,539
- ------------------------------------------------------------------------------------------
Mid/Small Company Index 35,744
- ------------------------------------------------------------------------------------------
Broad Market Index 1,153,990
- ------------------------------------------------------------------------------------------
500 Stock Index 316,074
- ------------------------------------------------------------------------------------------
Core Bond Index 585,974
- ------------------------------------------------------------------------------------------
</TABLE>

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 Board of Directors of the Fund has adopted Insider Trading Policies pursuant
to Rule 17j-1 under the Investment Company Act of 1940. This policy applies to
the personal investing activities of its access persons as defined by Rule
17j-1.

9
<PAGE> 47

The policy is designed to prevent unlawful practices in connection with the
purchase and sale of securities by access persons. Under the policy, access
persons are permitted to engage in personal securities transactions, but are
required to report their personal securities transactions for monitoring
purposes. A copy of this policy is on file with the Securities & Exchange
Commission and is available to the public.

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 and the fees paid for the fiscal period
ended December 31, 1999 are set forth below.

<TABLE>
<CAPTION>
AGGRESSIVE OPPORTUNITIES FUND

AMOUNT PAID FOR
ASSETS PERIOD ENDED
SUBADVISER MANAGED FEE DEC. 31, 1999
----------------------------------- ------------------------ ------- -------------
<S> <C> <C> <C>
First Pacific Advisers, Inc. First $100 million 0.80% $639,257
Over $100 million 0.75%

MFS Institutional Advisors, Inc. Flat fee 0.75% $634,124

TCW Funds Management, Inc. First $100 Million 0.73% $626,419
Next $100 Million 0.69%
Over $200 Million 0.67%

INTERNATIONAL FUND

Subadviser
----------
Capital Guardian Trust Company First $25 Million 0.75%* $254,792
Next $25 Million 0.60%
Next $200 Million 0.43%
Next $250 Million 0.38%
*Minimum Fee of $337,500
Payable to Capital
Guardian

Lazard Asset Management First $100 million 0.50% $231,876
Over $100 million 0.40%

Rowe Price-Fleming, International,
Inc. First $20 Million 0.75% $130,239
Next $30 Million 0.60%
Over $50 Million 0.50%
After $200 Million 0.50%*
*On all assets managed
by Rowe Price-Fleming

GROWTH FUND

Subadviser
----------
TCW Funds Management, Inc. First $25 million 0.70% --
Next $25 million 0.50%
Next $50 million 0.45%
Next $400 million 0.40%
Over $500 million 0.35%

William Blair & Company, LLC First $150 million 0.50% $890,609
Next $150 million 0.45%
Over $300 million 0.40%

Tukman Capital Management, Inc. Flat fee 0.50% --

Barclays Global Fund Advisors First $500 million 0.04% $24,810
Next $500 million 0.02%
Over $1 billion 0.01%

Fidelity Management Trust Company First $25 million 0.80% $1,255,100
Over $25 million 0.60%

Brown Capital Management, Inc. First $50 million 0.45% --
Next $50 million 0.40%
Next $100 million 0.30%
</TABLE>

10
<PAGE> 48

<TABLE>
<S> <C>
Next $300 million 0.25%
Over $500 million 0.20%
** From 1/1/2000 to
12/31/2000 the annual
fee will be .45 of 1%.
Beginning on 1/1/2001
the annual fee will be
.80 of 1% on the first
$25 million and .60% of
1% on assets over $25
million.
</TABLE>

<TABLE>
<CAPTION>
GROWTH & INCOME FUND

AMOUNT PAID FOR
ASSETS PERIOD ENDED
SUBADVISER MANAGED FEE DEC. 31, 1999
-------------------------------------- ----------------- ------- -------------
<S> <C> <C> <C>
Capital Guardian Trust Company First $25 million 0.55%* $188,689
Next $25 million 0.40%
Over $50 million 0.23%
* Minimum fee of
$167,500 payable to
Capital Guardian

Putnam Investments Management, Inc. First $15 million 0.55% $213,438
Next $35 million 0.40%
Next $50 million 0.30%
Over $100 million 0.25%

Wellington Management Company, LLP First $50 million 0.40% N/A
Next $50 million 0.30%
Over $100 million 0.25%

EQUITY INCOME FUND

Subadviser
----------

Wellington Management Company, LLP First $50 million 0.40% $90,361
Next $100 million 0.30%
Over $200 million 0.25%

Barrow, Hanley, Mewhinney & Strauss,
Inc. First $10 million 0.75% $84,858
Next $15 million 0.50%
Next $175 million 0.25%
Next $600 million 0.20%
Next $200 million 0.15%
Over $1 billion 0.13%

T. Rowe Price Associates, Inc. First $500 million 0.40% $119,840
Over $500 million 0.375%

ASSET ALLOCATION FUND

Subadviser
----------

Investors Associates Corp. First $250 million 0.25% $831,145
Next $250 million 0.20%
Over $500 million 0.18%

Mellon Capital Management First $200 million 0.38% $978,777
Over $200 million 0.20%

Wilshire Asset Management First $100 million 0.04% $83,037
Next $400 million 0.02%
Over $500 million 0.01%

Payden & Rygel Investment Counsel First $200 million 0.10% $233,511
Next $100 million 0.09%
</TABLE>

11
<PAGE> 49

<TABLE>
<S> <C> <C> <C>
Over $300 million 0.08%

U.S. TREASURY SECURITIES FUND

Subadviser

Seix Investment Advisors, Inc. First $25 million 0.17% $75,600
Next $50 million 0.12%
Next $25 million 0.07%

MONEY MARKET FUND

N/A - amount
deducted from the
daily dividend
AIM Advisors, Inc. 0.08% factor
</TABLE>

<TABLE>
<CAPTION>
INDEX FUNDS (BARCLAYS)

ADVISORY AND
ADMINISTRATIVE
FEES
-----------------------------
<S> <C> <C>
Broad Market Index Fund 0.08%** $357,301

500 Stock Index Fund 0.05% $71,073

Core Bond Index Fund 0.08% $172,231

Mid/Small Company Index 0.10% $14,403

Overseas Equity Index Investment advisory fees of $21,557
0.15% of the first $1 billion
of assets 0.10% of assets
in excess of $1 billion;
and administrative fees of
.10% on the first $1 billion
of assets and .07% on assets in
excess of $1 billion.
</TABLE>

**Barclays is entitled to receive monthly fees at the annual rate of 0.01% of
the average daily net assets of the U.S. Equity 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
approximately 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.

Cadence Capital Management, Neuberger & Berman LLC and Fidelity Management Trust
Company also served as subadvisors to the Growth Fund until September 30, 1999
and received $1,019,044, $290,681 and $471,539 in subadvisory fees,
respectively.*

Crawford Investments and Newell Associates served as subadvisers to the Equity
Income Fund until July 28, 1999 and received $220,502 and $287,436 respectively
in subadvisory fees, respectively.

* Fidelity Management Trust Company remains as subadviser to the Growth Fund,
however, that portion of the Fidelity account that had been managed by Kennedy
P. Richardson has been terminated.

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 following amount represents the amount of these
transactions and commissions paid for the fiscal period ended December 31, 1999:

12
<PAGE> 50

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Total Brokerage Commissions Directed Brokerage Commissions
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Aggressive Opportunities $ 385,476 $ 1,210
- ------------------------------------------------------------------------------------------------------------------------------------
International 240,532 19,238
- ------------------------------------------------------------------------------------------------------------------------------------
Growth 5,540,732 711,081
- ------------------------------------------------------------------------------------------------------------------------------------
Growth & Income 179,678 42,743
- ------------------------------------------------------------------------------------------------------------------------------------
Equity Income 1,093,636 369,904
- ------------------------------------------------------------------------------------------------------------------------------------
Asset Allocation 104,539 --
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Securities -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Overseas Equity Index N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Mid/Small Company Index N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Broad Market Index N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
500 Stock Index N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Core Bond Index N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Total $7,544,593 $1,144,176
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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.

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' custodian 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

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<PAGE> 51

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.

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 $30 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 $75 million with an average
participant balance of at least $35 thousand 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 $30 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.

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<PAGE> 52

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;

* 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.

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<PAGE> 53

CALCULATION OF PERFORMANCE DATA

For purposes of quoting and comparing the performance of a Fund (other than the
Money Market Fund) to that of other mutual funds and to other relevant market
indexes in advertisements or in reports to shareholders, performance for the
Fund may be stated in terms of total return. Under the rules of the Securities
and Exchange Commission ("SEC Rules"), Funds advertising performance must
include total return quotes calculated according to the following formula:
n
P(1+T) = ERV

Where: P = a hypothetical initial payment of $1,000;

T = average annual total return;
n = number of years (1, 5 or 10); and

ERV = ending redeemable value of a hypothetical
$1,000 payment, made at the beginning of the
1, 5 or 10 year periods, at the end of the
1, 5, or 10 year periods (or fractional
portion thereof).

Under the foregoing formula, the time periods used in advertising will be based
on rolling calendar quarters, updated to the last day of the most recent quarter
prior to submission of the advertising for publication, and will cover 1, 5, and
10 year periods or a shorter period dating from the effectiveness of the
Registration Statement of the Funds. In calculating the ending redeemable value,
all dividends and distributions by a Fund are assumed to have been reinvested at
net asset value as described in the Trust's Prospectus on the reinvestment dates
during the period. Total return, or 'T' in the formula above, is computed by
finding the average annual compounded rates of return over the 1, 5, and 10 year
periods (or fractional portion

16
<PAGE> 54

thereof) that would equate the initial amount invested to the ending redeemable
value.

The total returns for each Fund for the period from March 1, 1999 through
December 31, 1999 were:

------------------------------------------------
Aggressive Opportunities 63.39%
------------------------------------------------
International 42.62%
------------------------------------------------
Growth 40.03%
------------------------------------------------
Growth & Income 23.50%
------------------------------------------------
Equity Income -4.60%
------------------------------------------------
Asset Allocation 8.61%
------------------------------------------------
U.S. Treasury Securities -0.66%
------------------------------------------------
Money Market 4.00%
------------------------------------------------
Overseas Equity Index Class I 30.03%
------------------------------------------------
Mid/Small Company Index Class I 40.90%
------------------------------------------------
Broad Market Index Class I 24.07%
------------------------------------------------
500 Stock Index Class I 19.52%
------------------------------------------------
Core Bond Index Class I -1.05%
------------------------------------------------

The total returns for Class II shares of the Index Funds for the period from
April 5, 1999 to December 31, 1999 were:

------------------------------------------------
Overseas Equity Index Class II 24.59%
------------------------------------------------
Mid/Small Company Index Class II 35.64%
------------------------------------------------
Broad Market Index Class II 19.01%
------------------------------------------------
500 Stock Index Class II 14.44%
------------------------------------------------
Core Bond Index Class II -1.19%
------------------------------------------------

In addition to the total return quotations discussed above, a Fund also may
advertise its yield based on a thirty-day (or one month) period ended on the
date of the most recent balance sheet included in the Trust's Registration
Statement, computed by dividing the net investment income per share of the Fund
earned during the period by the maximum offering price per Fund share on the
last day of the period, according to the following formula:

6
YIELD = 2(a-b / cd + 1) - 1

<TABLE>
<S> <C> <C>
Where: a = dividends and interest earned during the period;

b = expenses accrued for the period (net of reimbursements);

c = the average daily number of shares outstanding during the period
that were entitled to receive dividends; and

d = the maximum offering price per share on the last day of the period.
</TABLE>

Under this formula, interest earned on debt obligations for purposes of "a"
above, is calculated by (i) computing the yield to maturity of each obligation
held by the "a" Fund based on the market value of the obligation (including
actual accrued interest) at the close of business on the last day of each month,
or, with respect to obligations purchased during the month, the purchase price
(plus actual accrued interest), (ii) dividing that figure by 360 and multiplying
the quotient by the market value of the obligation (including actual accrued
interest as referred to above) to determine the interest income on the
obligation that is in a Fund's portfolio (assuming a month of thirty days), and
(iii) computing the total of the interest earned on all debt obligations and all
dividends accrued on all equity securities during the thirty-day or one month
period. In computing dividends accrued, dividend income is recognized by
accruing 1/360 of the stated dividend rate of a security each day that the
security is in the Fund's portfolio. Undeclared earned income, computed in
accordance with generally accepted accounting principles, may be subtracted from
the maximum offering price calculation required pursuant to "d" above.

The 30-day yield as of December 31, 1999 for the following Funds was

Core Bond Class I 6.77%
Core Bond Class II 6.98%

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<PAGE> 55

U.S. Treasury 5.99%

The Money Market Fund's annualized current yield, as may be quoted from time to
time in advertisements and other communications to shareholders and potential
investors, is computed by determining, for a stated seven-day period, the net
change, exclusive of capital changes and including the value of additional
shares purchased with dividends and any dividends declared therefrom (which
reflect deductions of all expenses of the Money Market Fund such as management
fees), in the value of a hypothetical pre-existing account having a balance of
one share at the beginning of the period, and dividing the difference by the
value of the account at the beginning of the base period to obtain the base
period return, and then multiplying the base period return by 365 divided by 7.

The Money Market Fund's annualized effective yield, as may be quoted from time
to time in advertisements and other communications to shareholders and potential
investors, is computed by determining (for the same stated seven-day period as
the current yield) the net change, exclusive of capital changes and including
the value of additional shares purchased with dividends and any dividends
declared therefrom (which reflect deductions of all expenses of the Money Market
Fund such as management fees), in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the period, and
dividing the difference by the value of the account at the beginning of the base
period to obtain the base period return, and then compounding the base period
return by adding 1, raising the sum to a power equal to 365 divided by 7, and
subtracting 1 from the result.

The current and effective 7-day yield as of December 31, 1999 for the Money
Market Fund was 5.01% and 5.13%, respectively.

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.

PURCHASE AND REDEMPTION OF SHARES

MINIMUM INVESTMENT REQUIREMENTS
Shareholders will be informed of any increase in the minimum investment
requirements by a new prospectus or a prospectus supplement, in which the new
minimum is disclosed. Any request for a redemption (including pursuant to check
writing privileges) by an investor whose account balance is (a) below the
currently applicable minimum investment, or (b) would be below that minimum as a
result of the redemption, will be treated as a request by the investor of a
complete redemption of that account. In addition, the Trust may redeem an
account whose balance (due in whole or in part to redemptions since the time of
last purchase) has fallen below the minimum investment amount applicable at the
time of the shareholder's most recent purchase of Fund shares (unless the
shareholder brings his or her account value up to the currently applicable
minimum investment).

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<PAGE> 56

TAX CONSEQUENCES
Note that in the case of tax-qualified retirement plans, a redemption from such
a plan may have adverse tax consequences. A shareholder contemplating such a
redemption should consult his or her own tax advisor. Other shareholders should
consider the tax consequences of any redemption.

SUSPENSION OF THE RIGHT OF REDEMPTION
The Funds may suspend the right of redemption or the date of payment: (i) for
any period during which the NYSE, the Federal Reserve Bank of New York, the
NASDAQ, the Chicago Mercantile Exchange ("CME"), the CBOT, or any other
exchange, as appropriate, is closed (other than customary weekend or holiday
closings), or trading on the NYSE, the NASDAQ, the CME, the CBOT, or any other
exchange, as appropriate, is restricted; (ii) for any period during which an
emergency exists so that sales of a Fund's investments or the determination of
its NAV is not reasonably practicable; or (iii) for such other periods as the
SEC may permit for the protection of a Fund's investors.

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.