Form N-CSR (Page 1 of 6)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08941

                                                  The Vantagepoint Funds                                                   
(Exact name of registrant as specified in charter)

            777 North Capitol Street, NE, Suite 600, Washington D.C. 20002-4240            
(Address of principal executive offices)               (Zip code)

Angela Montez, Secretary of the Registrant                                             
            777 North Capitol Street, NE, Suite 600, Washington D.C. 20002-4240            
(Name and address of agent for service

Registrant's telephone number, including area code:  202-962-4600         

Date of fiscal year end:   12/31/09        

Date of reporting period:   01/01/09 - 12/31/09       

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Form N-CSR (Page 2 of 6)

Item 1 (Report to Shareholders): The annual report is set forth below.

 

TABLE OF CONTENTS

Shareholder Expenses	1
Management’s Discussion of Fund Performance	3
Vantagepoint Funds
Report of Independent Registered Public Accounting Firm	91
Statements of Assets and Liabilities	92
Statements of Operations	99
Statements of Changes in Net Assets	106
Financial Highlights	123
Notes to Financial Statements	158
Schedules of Investments	215

 

Shareholder Expenses

As a shareholder of a Vantagepoint Fund, you incur ongoing expenses, such as advisory fees and other fund expenses. The following example is intended to help you understand your ongoing expenses (in dollars and cents) of investing in a fund and to compare these expenses with the ongoing expenses of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2009 to December 31, 2009.

Actual Expenses

The first section in the example below provides information about the actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number for your fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second section in the example below provides information about the hypothetical account values and hypothetical expenses based on each fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

ACTUAL										HYPOTHETICAL
Beginning Account Value 7/01/09	Ending Account Value 12/31/09		2009 Annualized Expense Ratio			Expenses Paid During Period*		Vantagepoint Funds	Beginning Account Value 7/01/09		Ending Account Value 12/31/09		2009 Annualized Expense Ratio			Expenses Paid During Period*
$1,000.00	$	1,000.00		0.42	%	$	2.12	Money Market**	$	1,000.00	$	1,023.09		0.42	%	$	2.14
$1,000.00	$	1,038.90		0.67	%	$	3.44	Low Duration Bond	$	1,000.00	$	1,021.83		0.67	%	$	3.41
$1,000.00	$	1,047.70		0.66	%	$	3.41	Inflation Protected Securities	$	1,000.00	$	1,021.88		0.66	%	$	3.36
$1,000.00	$	1,167.30		0.80	%	$	4.37	Asset Allocation	$	1,000.00	$	1,021.17		0.80	%	$	4.08
$1,000.00	$	1,253.20		0.88	%	$	5.00	Equity Income	$	1,000.00	$	1,020.77		0.88	%	$	4.48
$1,000.00	$	1,230.80		0.81	%	$	4.55	Growth & Income	$	1,000.00	$	1,021.12		0.81	%	$	4.13
$1,000.00	$	1,225.20		0.83	%	$	4.66	Growth	$	1,000.00	$	1,021.02		0.83	%	$	4.23
$1,000.00	$	1,269.50		1.04	%	$	5.95	Select Value	$	1,000.00	$	1,019.96		1.04	%	$	5.30
$1,000.00	$	1,284.00		0.98	%	$	5.64	Aggressive Opportunities	$	1,000.00	$	1,020.27		0.98	%	$	4.99
$1,000.00	$	1,263.60		0.97	%	$	5.53	Discovery	$	1,000.00	$	1,020.32		0.97	%	$	4.94
$1,000.00	$	1,212.40		1.04	%	$	5.80	International	$	1,000.00	$	1,019.96		1.04	%	$	5.30
$1,000.00	$	1,033.00		0.94	%	$	4.82	Diversified Assets***	$	1,000.00	$	1,020.47		0.94	%	$	4.79
$1,000.00	$	1,036.20		0.42	%	$	2.16	Core Bond Index Class I	$	1,000.00	$	1,023.09		0.42	%	$	2.14
$1,000.00	$	1,037.00		0.22	%	$	1.13	Core Bond Index Class II	$	1,000.00	$	1,024.10		0.22	%	$	1.12
$1,000.00	$	1,223.50		0.43	%	$	2.41	500 Stock Index Class I	$	1,000.00	$	1,023.04		0.43	%	$	2.19
$1,000.00	$	1,225.30		0.23	%	$	1.29	500 Stock Index Class II	$	1,000.00	$	1,024.05		0.23	%	$	1.17
$1,000.00	$	1,227.30		0.42	%	$	2.36	Broad Market Index Class I	$	1,000.00	$	1,023.09		0.42	%	$	2.14
$1,000.00	$	1,228.40		0.22	%	$	1.24	Broad Market Index Class II	$	1,000.00	$	1,024.10		0.22	%	$	1.12
$1,000.00	$	1,247.60		0.47	%	$	2.66	Mid/Small Company Index Class I	$	1,000.00	$	1,022.84		0.47	%	$	2.40
$1,000.00	$	1,249.90		0.27	%	$	1.53	Mid/Small Company Index Class II	$	1,000.00	$	1,023.84		0.27	%	$	1.38
$1,000.00	$	1,212.40		0.55	%	$	3.07	Overseas Equity Index Class I	$	1,000.00	$	1,022.43		0.55	%	$	2.80
$1,000.00	$	1,213.90		0.35	%	$	1.95	Overseas Equity Index Class II	$	1,000.00	$	1,023.44		0.35	%	$	1.79
$1,000.00	$	1,086.80		0.88	%	$	4.63	Model Portfolio Savings Oriented**	$	1,000.00	$	1,020.77		0.88	%	$	4.48
$1,000.00	$	1,114.70		0.88	%	$	4.69	Model Portfolio Conservative Growth**	$	1,000.00	$	1,020.77		0.88	%	$	4.48
$1,000.00	$	1,156.60		0.93	%	$	5.06	Model Portfolio Traditional Growth**	$	1,000.00	$	1,020.52		0.93	%	$	4.74
$1,000.00	$	1,187.70		0.97	%	$	5.35	Model Portfolio Long-Term Growth**	$	1,000.00	$	1,020.32		0.97	%	$	4.94
$1,000.00	$	1,241.40		1.05	%	$	5.93	Model Portfolio All-Equity Growth**	$	1,000.00	$	1,019.91		1.05	%	$	5.35
$1,000.00	$	1,095.00		0.98	%	$	5.17	Milestone Retirement Income**	$	1,000.00	$	1,020.27		0.98	%	$	4.99
$1,000.00	$	1,102.50		0.96	%	$	5.09	Milestone 2010**	$	1,000.00	$	1,020.37		0.96	%	$	4.89
$1,000.00	$	1,138.30		0.93	%	$	5.01	Milestone 2015**	$	1,000.00	$	1,020.52		0.93	%	$	4.74

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ACTUAL										HYPOTHETICAL
Beginning Account Value 7/01/09	Ending Account Value 12/31/09		2009 Annualized Expense Ratio			Expenses Paid During Period*		Vantagepoint Funds	Beginning Account Value 7/01/09		Ending Account Value 12/31/09		2009 Annualized Expense Ratio			Expenses Paid During Period*
$1,000.00	$	1,156.10		0.92	%	$	5.00	Milestone 2020**	$	1,000.00	$	1,020.57		0.92	%	$	4.69
$1,000.00	$	1,172.10		0.95	%	$	5.20	Milestone 2025**	$	1,000.00	$	1,020.42		0.95	%	$	4.84
$1,000.00	$	1,188.70		0.97	%	$	5.35	Milestone 2030**	$	1,000.00	$	1,020.32		0.97	%	$	4.94
$1,000.00	$	1,202.20		1.01	%	$	5.61	Milestone 2035**	$	1,000.00	$	1,020.11		1.01	%	$	5.14
$1,000.00	$	1,214.60		0.98	%	$	5.47	Milestone 2040**	$	1,000.00	$	1,020.27		0.98	%	$	4.99

 

*  Expenses are calculated using each fund’s annualized expense ratio (as disclosed in the table), multiplied by the average account value over the period, multiplied by [number of days in most recent fiscal half year divided by total number of days in fiscal year e.g. 184/365] (to reflect the one-half year period).

**  This fund invests in one or more other mutual funds. The annualized expense ratio includes this fund’s proportionate share of the expense ratio of such other mutual fund(s).

***  Renamed Diversifying Strategies Fund effective January 4, 2010.

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Vantagepoint Money Market Fund

The Vantagepoint Money Market Fund’s objective is to seek maximum current income, consistent with maintaining liquidity and a stable share price of $1.00. Its principal investment strategy is to invest substantially all of its assets in the Short-Term Investments Trust Liquid Assets Portfolio (the “Portfolio”), an unaffiliated registered money market mutual fund, which seeks to provide as high a level of current income as is consistent with the preservation of capital and liquidity.The Portfolio invests in high-quality, U.S. dollar-denominated short-term debt obligations and is advised by Invesco Aim Advisors, Inc.The Portfolio invests primarily in securities issued by the U.S. Government or its agencies, bankers’ acceptances, certificates of deposit and time deposits from U.S. or foreign banks, repurchase agreements, commercial paper, municipal securities, and master notes.The Portfolio may invest up to 50% of its assets in U.S. dollar denominated foreign securities and may invest in securities that may carry foreign credit exposure.The Fund’s portfolio has an average maturity of 90 days or less. At the end of 2009, the Portfolio’s weighted average maturity was 51 days, up from 43 days at the beginning of the year.

Performance

The Vantagepoint Money Market Fund’s total return for the year ended December 31, 2009, was 0.16%.The Fund’s market benchmark, the 30-Day U.S. Treasury Bill, returned 0.10%, while the Fund’s peer group benchmark, the MFR Prime Retail Funds Average, returned 0.17%.The Fund closed the year with a 7-day effective and current yield of 0.00%, down from a 7-day effective yield of 1.19% and a 7-day current yield of 1.18%, at the end of 2008.

Commentary

Fixed income markets were marked by two distinct phases in 2009.The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, high demand for U.S. Treasury securities, and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for short-dated U.S. Treasury securities and most other sectors of the bond market. Money market funds experienced a difficult year.The combination of the Fed’s near-zero interest rate policy and tighter credit spreads caused a substantial portion of the money market fund universe, including the Fund, to introduce fee waivers to maintain a $1.00 NAV. As a result, many funds, including the Fund, offered zero yields for the second half of the year.

The Fund’s performance relative to its market benchmark was the result of the Fund’s credit exposure and voluntary fee waivers by the investment adviser to the Portfolio and Vantagepoint Investment Advisers, LLC provided during the second half of the year. Without these voluntary fee waivers, the Fund would have underperformed the benchmark for the year.The Fund’s slight underperformance relative to its peer average was due to fee waivers made by other funds in the peer group.

3

*These are the reported holdings of the underlying Short-Term Investments Trust Liquid Assets Portfolio.
Other: Tax-Exempt Commercial Paper 1.0%, U.S. Agency Floaters 0.8%, and Corporate Bonds 0.1%.

4

Vantagepoint Money Market Fund vs. 30-Day U.S. Treasury Bill:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Money Market Fund
Average Annual Total Return for the periods ended December 31, 2009*
One Year	0.16%**
Three Years	2.42%
Five Years	2.89%
Ten Years	2.68%
Fund Inception Date	March 1, 1999

*Past performance does not guarantee future results. Investment returns will fluctuate. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. While the Fund seeks to maintain a stable net asset value of $1 per share, there is no guarantee that it will do so and it is still possible to lose money by investing in the Fund. All returns reflect reinvested dividends but do not include the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money.The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA Retirement Corporation (“ICMA-RC”), and member FINRA/SIPC. 800-669-7400.

The Fund’s market benchmark is the 30-Day U.S. Treasury Bill, an unmanaged benchmark that does not reflect the cost of portfolio management or trading. The Fund’s portfolio differs significantly from the market benchmark, which is a single security.

**Due to voluntary fee waivers, the Fund’s yield for the latter half of 2009 was zero. Most of the Fund’s positive return occurred earlier during the year.

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Vantagepoint Low Duration Bond Fund

The Vantagepoint Low Duration Bond Fund’s objective is to seek total return that is consistent with preservation of capital.The principal investment strategy is to invest, under normal circumstances, at least 80% of its net assets in bonds of varying maturities.The Fund also normally invests at least 65% of its total assets in debt securities with more than one year to maturity, and seeks to maintain a portfolio effective duration of no greater than three years.

Performance

The Vantagepoint Low Duration Bond Fund returned 10.63% in 2009.The Fund’s market benchmark, the Merrill Lynch 1–3 Year US Corporate & Government Index, returned positive 3.84% while the Fund’s peer group benchmark, the Morningstar Short-Term Bond Funds Average, a group of mutual funds with similar investment objectives, experienced a gain of 9.30%.

Commentary

Fixed income markets were marked by two distinct phases in 2009.The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, high demand for U.S. Treasury securities, and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year.The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market. Generally, sectors that performed the worst in 2008 performed the best in 2009. High-yield bonds were the highest returning category of fixed income securities with nearly a 60% return, followed by emerging markets debt, commercial mortgage-backed securities, asset-backed securities, investment grade corporate bonds, and U.S. Treasury inflation protected securities, all with double digit returns.

The Fund’s absolute return as well as return relative to the Fund’s market benchmark in 2009 were the result of favorable exposure to spread products, especially corporate bonds and asset-backed securities, as yield differences between U.S. Treasury securities and other bond sectors declined.The Fund’s absolute return was somewhat diminished during the year as yields rose, which lowered the value of bond holdings.

The Fund’s outperformance relative to its peer group average was largely the result of a slightly shorter duration as rates rose and the Fund’s above average exposure to asset-backed securities. A lower exposure to high-yield (lower quality) securities compared to peers detracted from relative performance as they outperformed higher quality securities during the year.

The Fund employs a multi-manager investment approach that brings together two subadvisers, each with a distinct investing style.The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

Subadviser Data

Payden & Rygel
Founded:	1983
Investment Style:	Low duration
STW Fixed Income Management Ltd.
Founded:	1977
Investment Style:	Low duration

6

Vantagepoint Low Duration Bond Fund
Sector Allocation as of December 31, 2009

7

Vantagepoint Low Duration Bond Fund vs. Merrill Lynch 1-3 Year US Corporate & Government Index:

Growth of $10,000 Invested December 4, 2000*

Vantagepoint Low Duration Bond Fund
Total Return for the periods ended December 31, 2009*
One Year	10.63%
Three Years	4.67%
Five Years	3.84%
Since Inception	3.98%
Fund Inception Date	December 4, 2000

*On November 8, 2004, the Fund underwent changes to its investment objective, strategies and investment subadvisers. On May 1, 2007, the Fund changed its name and principal investment strategy. Performance prior to 2004, should not be considered representative of the Fund as currently managed.

Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns reflect reinvested dividends but do not include the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money.The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s benchmark is the Merrill Lynch 1-3 Year US Corporate & Government Index (“Merrill 1-3”).The Merrill 1-3 tracks the performance of U.S. dollar-denominated investment grade Government and corporate public debt securities issued in the U.S. domestic bond market with maturities between 1 and 3 years. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the index.

8

Vantagepoint Inflation Protected Securities Fund

The Vantagepoint Inflation Protected Securities Fund’s objective is to offer current income.The principal investment strategy is to invest, under normal circumstances, at least 80% of its net assets in inflation adjusted U.S. and non-U.S. fixed income securities.The Fund will, under normal circumstances, invest at least 50% of its net assets in U.S. Treasury inflation protected securities.

Performance

The Vantagepoint Inflation Protected Securities Fund gained 9.75% in 2009.The Fund’s market benchmark, the Barclays Capital U.S. Treasury Inflation Protected Securities (TIPS) Index (Series L), gained 11.41%, while the Fund’s peer group, the Morningstar Inflation-Protected Bond Funds Average, a group of mutual funds with similar investment objectives, had an average return of 10.88%.

Commentary

Fixed income markets were marked by two distinct phases in 2009.The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, high demand for U.S. Treasury securities, and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March when yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. Real yields (yields adjusted for inflation) declined over the year and provided a boost to returns of inflation adjusted securities. The overall effect was positive returns for most sectors of the bond market, including inflation adjusted securities.

The Fund’s absolute positive return in 2009 was the result of the favorable results achieved by U.S. Treasury inflation protected securities as real yields declined during the year, and the Fund’s allocations to Corporate bonds and U.S. Government Agency mortgage-backed securities.

The Fund’s underperformance relative to its market benchmark was largely the result of tactical duration and yield curve positionings (i.e., holding securities with different yields and maturities to those in the benchmark) over time. The Fund’s exposure to spread sectors, particularly Financials and Agency mortgage-backed securities, helped offset some of the underperformance.

The Fund’s underperformance relative to its peer group average was mainly a result of a lower allocation to credit sectors of the bond market compared to most peers. This was offset somewhat by the shorter maturity structure of the Fund’s holdings over time, which helped performance relative to peers as shorter dated bonds generally outperformed longer dated bonds.

The majority of the Fund was invested in U.S. Treasury inflation protected securities, which is limited to only 35 issues, and the Fund’s subadvisers actively traded those securities to seek to achieve performance results. This was the leading contributor to the Fund’s portfolio turnover, which exceeded 100% in 2009.

The Fund employs a multi-manager investment approach that brings together two subadvisers, each with a distinct investing style.The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

9

Subadviser Data

BlackRock Financial Management, Inc.
Founded:	1988
Investment Style:	Broad-based inflation-linked
Pacific Investment Management Company LLC
Founded:	1971
Investment Style:	Broad-based inflation-linked

Vantagepoint Inflation Protected Securities Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is BondEdge.

Due to rounding, pie chart allocations may not add up to 100%.

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Vantagepoint Inflation Protected Securities Fund vs. Barclays Capital U.S. TIPS Index (Series L):

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Inflation Protected Securities Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	9.75%
Three Years	6.22%
Five Years	4.59%
Ten Years	5.42%
Fund Inception Date	July 1, 1992
Fund Registration Date	March 1, 1999

*Prior to May 1, 2007, the Fund had a different name and different principal investment strategies. On May 1, 2007, the Fund underwent changes to its name, principal investment strategies, and investment subadvisers. Performance prior to May 1, 2007, should not be considered representative of the performance of the Fund as currently managed. There is no assurance that the Fund will be able to achieve long-term investment results similar to those achieved prior to May 1, 2007. Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money.The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/SIPC. 800-669-7400.

The Barclays Capital U.S. Treasury Inflation Protected Securities Index (Series-L) consists of all U.S. Treasury inflation protected securities rated investment grade or better, having at least one year to final maturity and at least $250 million par amount outstanding. The Series-L reference identifies this index as the former Lehman Brothers U.S. TIPS Index, and differentiates it from the legacy Barclays Capital TIPS Index. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities held in the indexes.

11

Vantagepoint Asset Allocation Fund

The Vantagepoint Asset Allocation Fund’s objective is to offer long-term capital growth at a lower level of risk than an all-equity portfolio.The principal investment strategy is to tactically allocate assets among common stocks, U.S. Treasury securities and investment grade short-term debt instruments in proportions determined by the Fund’s subadviser based on relative expected returns and risk for each asset class. Under normal circumstances, the Fund invests 40% to 70% of its assets in common stocks; however, the Fund’s investments in common stocks may range from as little as 0% to as much as 100% of Fund assets.The Fund invests the rest of its assets in short-term debt instruments and U.S. Treasury obligations.The Fund’s subadviser applies a tactical asset allocation strategy based on systematic assessment of specific criteria such as expected long-term asset class returns, valuation measures, economic and monetary indicators, and financial market conditions.

Performance

The Vantagepoint Asset Allocation Fund gained 17.62% for 2009.The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Moderate Allocation Funds Average, a group of mutual funds with similar investment objectives, gained 24.13%.The Fund’s custom benchmark, which is composed of 65% S&P 500 Index, 25% Barclays Capital U.S. Long Treasury Bond Index and 10% 91-Day U.S. Treasury Bills, gained 13.24%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Debt instruments provided more subdued returns for the year, with the fixed income market as measured by the Barclays Capital U.S. Aggregate Bond Index producing a return of 5.93%.

The Fund’s underperformance in 2009 versus the S&P 500 Index resulted from the Fund subadviser’s allocation decisions throughout the year.The Fund began 2009 with an allocation of 100% stocks, but shifted away from equities and into bonds as equity markets moved higher and became less attractive from the subadviser’s perspective.The Fund ended the year 70% stocks and 30% debt instruments.The high allocation to stocks early in the year when the equity markets experienced significant negative returns, and the underweight to equities relative to the S&P 500 Index in the latter half of the year detracted from performance. However, the allocations produced outperformance compared to the Fund’s custom benchmark, which combines stock, bond and cash indexes, and is more reflective of how the Fund is positioned typically over longer time periods.

The Fund underperformed its peer group average also as a result of relative asset allocation positioning early in 2009.The Fund had a meaningfully higher allocation to equities early in 2009 than most peer group funds, when the equity markets experienced significant negative returns. Additionally, peer exposure to international investments, emerging markets, and convertible securities that outperformed in 2009—while the Fund was void of such exposures—resulted in a drag on relative performance.

Subadviser Data

Mellon Capital Management Corporation
Founded:	1983
Investment Style:	Tactical asset allocation

12

Vantagepoint Asset Allocation Fund
Allocation of Assets for the 5 Years Ended December 31, 2009

Vantagepoint Asset Allocation Fund vs. S&P 500 Index and Custom Benchmark:

Growth of $10,000 Invested December 31, 1999*

13

Vantagepoint Asset Allocation Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	17.62%
Three Years	-7.52%
Five Years	-0.92%
Ten Years	0.51%
Fund Inception Date	December 1, 1974
Fund Registration Date	March 1, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the S&P 500 Index, consists of 500 companies representing larger capitalization stocks traded in the U.S. and the Fund’s custom benchmark is comprised of 65% S&P 500 Index, 25% Barclays Capital U.S. Long Treasury Bond Index, and 10% 91-Day Treasury Bills. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the indexes.

14

Vantagepoint Equity Income Fund

The Vantagepoint Equity Income Fund’s objective is to offer long-term capital growth with consistency derived from dividend yield.The principal investment strategy is to invest, under normal circumstances, at least 80% of its net assets in equity securities.The Fund seeks to invest primarily in the common stocks of companies that are expected to pay dividends at above-market levels. The Fund may invest across companies of all sizes but generally focuses on larger capitalization companies, which tend to have the most stable long-term earnings and dividend-paying records.The Fund may also invest in securities of foreign issuers, convertible securities, and investment grade and below investment grade bonds.

Performance

The Vantagepoint Equity Income Fund gained 35.28% in 2009.The Fund’s market benchmark, the Russell 1000 Value Index gained 19.69%, while the Fund’s peer group benchmark, the Morningstar Large Value Funds Average, a group of mutual funds with similar investment objectives, gained 24.13%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied.The gains were led by the Information Technology sector, which gained nearly 62%. Financials, the hardest hit sector in 2008, rebounded and gained 17% for the year. Mid-capitalization stocks outperformed both large- and small-capitalization stocks, and growth-oriented strategies generally outperformed value-oriented strategies.

The Fund’s absolute and relative returns in 2009 were the result of favorable positioning both at the sector and security holdings level. All sectors contributed positively to the Fund’s absolute return, led by the Information Technology and Consumer Discretionary Sectors.

The Fund’s outperformance relative to its market benchmark was the result of favorable stock holdings in most sectors, particularly the Energy, Industrials, and Consumer Discretionary sectors. An overweight to the Consumer Discretionary and Information Technology sectors and underweight Consumer Staples and Financials sectors boosted relative performance. Stock holdings in the Materials and Financials sectors hurt performance the most, on a relative basis, as did being overweight the Industrials sector.

The Fund’s outperformance relative to its peer group average was largely the result of specific stock holdings in most sectors, particularly in the Energy, Consumer Discretionary, and Industrials sectors. Being overweight Consumer Discretionary and Information Technology stocks and underweight Financials stocks boosted relative performance. Specific stocks holdings in Financials and Materials sectors hurt performance the most relative to peers. Being underweight Energy stocks was a slight drag on 2009 performance.

The Fund employs a multi-manager investment approach that brings together three subadvisers, each with a distinct investing style.The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

15

Subadviser Data

Barrow, Hanley, Mewhinney & Strauss, Inc.
Founded:	1979
Investment Style:	Contrarian value
T. Rowe Price Associates, Inc.
Founded:	1937
Investment Style:	Relative yield value
Southeastern Asset Management, Inc.
Founded:	1975
Investment Style:	Special situations

The primary source of sector allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

16

Vantagepoint Equity Income Fund vs. Russell 1000 Value Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Equity Income Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	35.28%
Three Years	-5.14%
Five Years	1.40%
Ten Years	5.36%
Fund Inception Date	April 1, 1994
Fund Registration Date	March 1, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the Russell 1000 Value Index, consists of a subset of the Russell 1000 Index that measures the performance of the large-cap value segment of the U.S. equity universe, and includes companies with lower price-to-book ratios and lower forecasted growth values. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the index.

17

Vantagepoint Growth & Income Fund

The Vantagepoint Growth & Income Fund’s objective is to offer long-term capital growth and current income.The principal investment strategy is to invest primarily in common stocks that the Fund’s subadvisers believe offer the potential for capital appreciation and, secondarily, current income by investing in dividend-paying stocks. Strategies used by the Fund’s subadvisers include: 1) focusing on large-capitalization companies whose stocks are believed to offer potential for price appreciation because of undervaluation, earnings growth or both; and 2) emphasizing stocks that may pay dividends. The Fund may also invest in bonds, convertible securities, and securities of foreign issuers.

Performance

The Vantagepoint Growth & Income Fund gained 33.61% in 2009.The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Large Blend Funds Average, a group of mutual funds with similar investment objectives, gained 28.17%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied.The gains were led by the Information Technology sector, which gained nearly 62%. Financials, the hardest hit sector in 2008, rebounded and gained 17% for the year. Mid-capitalization stocks outperformed both large- and small-capitalization stocks, and growth-oriented strategies generally outperformed value-oriented strategies.

The Fund’s absolute and relative returns in 2009 were the result of favorable positioning both at the sector and security holdings level. All sectors contributed positively to the Fund’s absolute return, led by the Information Technology, Consumer Discretionary and Materials sectors.

The Fund’s outperformance relative to its market benchmark was the result of favorable stock holdings in most sectors, particularly the Energy, Industrials and Consumer Discretionary sectors. An overweight in capital market industry stocks, which performed strongly within the Financials sector, and underweights in Energy and Utilities, also benefited performance. While the Fund’s Technology weighting provided the strongest return to the portfolio on an absolute basis, stock holdings within the sector detracted from performance relative to the Fund’s market benchmark.

The Fund’s outperformance relative to its peer group average was largely the result of specific stock holdings in most sectors, particularly in the Healthcare, Consumer Staples, and Consumer Discretionary sectors. Sector weights also benefited performance, notably overweights to Technology and Consumer Discretionary and underweights to Energy and Consumer Staples; however stock holdings within the Technology sector hurt performance.The Fund’s modest growth tilt relative to peers aided relative performance, while the Fund’s holdings in mid-capitalization stocks, relative to peers, detracted from performance.

In January 2009, Fiduciary Management, Inc. replaced Capital Guardian Trust Company as a subadviser of the Fund.The transition resulted in turnover of approximately a third of Fund assets. As a result, overall portfolio turnover was unusually high for the year at over 100%.

The Fund employs a multi-manager investment approach that brings together three subadvisers, each with a distinct investing style.The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

18

Subadviser Data

Fiduciary Management, Inc.
Founded:	1980
Investment Style:	Large-cap blend
T. Rowe Price Associates, Inc.
Founded:	1937
Investment Style:	Blue chip growth
Wellington Management Company, LLP
Founded:	1928
Investment Style:	Yield focused

Vantagepoint Growth & Income Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

19

Vantagepoint Growth & Income Fund vs. S&P 500 Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Growth & Income Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	33.61%
Three Years	-4.33%
Five Years	1.01%
Ten Years	1.34%
Fund Inception Date	October 2, 1998
Fund Registration Date	March 1, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money.The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the S&P 500 Index, consists of 500 companies representing larger capitalization stocks traded in the U.S. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading. The Fund’s portfolio may differ significantly from the securities in the index.

20

Vantagepoint Growth Fund

The Vantagepoint Growth Fund’s objective is to offer long-term capital growth. The principal investment strategy is to invest primarily in common stocks that are considered by the Fund’s subadvisers to have above-average potential for growth, with emphasis on stocks of seasoned medium- and large-capitalization firms.The Fund may also invest in bonds, convertible securities, small capitalization stocks, and securities of foreign issuers.

Performance

The Vantagepoint Growth Fund gained 31.02% in 2009. The Fund’s market benchmark, the Russell 1000 Growth Index, gained 37.21% for the year.The Fund’s peer group benchmark, the Morningstar Large Growth Funds Average, a group of mutual funds with similar investment objectives, gained 35.68%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied.The gains were led by the Information Technology sector, which gained nearly 62%. Financials, the hardest hit sector in 2008, rebounded and gained 17% for the year. Mid-capitalization stocks outperformed both large- and small-capitalization stocks, and growth-oriented strategies generally outperformed value-oriented strategies.

The Fund’s absolute return in 2009 was the result of positive performance in all sectors of the U.S. stock market, led by the Information Technology, Energy and Materials sectors.

The Fund’s underperformance relative to its market benchmark was driven by specific stock holdings in the Information Technology sector combined with an underweight position in that sector during the first half of 2009. Stock holdings within Financial and Healthcare sectors were also leading detractors from performance relative to the market benchmark.The impact of these factors was somewhat offset by stock holdings in the Energy and Materials sectors. An underweight to Industrial stocks and limited exposure to Utility stocks also aided relative performance.

The Fund’s underperformance relative to its peer group average was largely the result of stock holdings in the Information Technology and Consumer Discretionary sectors. An overweight stance in the Consumer Staples and Industrial sectors also hindered relative results. However, the Fund benefited from stock holdings in the Materials and Consumer Staples sectors.The allocation to the Energy and Utilities sectors was also additive to relative performance versus peers.

The Fund employs a multi-manager investment approach that brings together five subadvisers, each with a distinct investing style. The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

21

Subadviser Data

Columbus Circle Investors
Founded:	1975
Investment Style:	Large-cap growth
D.G. Capital Management Trust
Founded:	1996
Investment Style:	Opportunistic growth
Legg Mason Capital Management, Inc.
Founded:	1982
Investment Style:	Opportunistic growth
Tukman Grossman Capital Management, Inc.
Founded:	1980
Investment Style:	Contrarian growth
Westfield Capital Management Company, L.P.
Founded:	1989
Investment Style:	Growth

Vantagepoint Growth Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

22

Vantagepoint Growth Fund vs. Russell 1000 Growth Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Growth Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	31.02%
Three Years	-6.34%
Five Years	-1.03%
Ten Years	-2.33%
Fund Inception Date	April 1, 1983
Fund Registration Date	March 1, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the Russell 1000 Growth Index, consists of a subset of the Russell 1000 Index that measures the performance of the large-cap segment of the U.S. equity universe and includes companies with higher price-to-book ratios and higher forecasted growth values. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the index.

23

Vantagepoint Select Value Fund

The Vantagepoint Select Value Fund’s objective is to offer long-term growth from dividend income and capital appreciation.The principal investment strategy is to invest, under normal circumstances, primarily in common stocks of mid-capitalization U.S. companies that the Fund’s subadvisers believe present attractive investment opportunities at favorable prices in relation to the intrinsic worth of the issuer.The Fund may also invest in REITs, preferred stock, stocks of foreign issuers, and convertible securities.

Performance

The Vantagepoint Select Value Fund gained 36.99% in 2009. The Fund’s market benchmark, the Russell Midcap Value Index, gained 34.21%, while the Fund’s peer group benchmark, the Morningstar Mid-Cap Value Funds Average, a group of mutual funds with similar investment objectives, gained 35.41%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied.The gains were led by the Information Technology sector, which gained nearly 62%. Financials, the hardest hit sector in 2008, rebounded and gained 17% for the year. Mid-capitalization stocks outperformed both large- and small-capitalization stocks, and growth-oriented strategies generally outperformed value-oriented strategies.

The Fund’s absolute and relative returns in 2009 were the result of favorable positioning both at the sector and security holdings level. Nine of the ten sectors contributed positively to the Fund’s absolute return, led by the Materials, Information Technology, and Energy sectors.

The Fund’s outperformance relative to its market benchmark was the result of favorable stock holdings, particularly in the Financials, Materials, and Energy sectors. Being overweight Information Technology and underweight Utilities and Financials stocks boosted relative performance.The Fund’s stock holdings in Consumer Discretionary and Telecommunications Services sectors hurt performance the most, on a relative basis, as did an overweight to Industrials and underweight to Materials.

The Fund’s outperformance relative to its peer group average was largely the result of specific stock holdings, particularly in the Financials, Materials, and Consumer Discretionary sectors. Being overweight Consumer Discretionary and underweight Consumer Staples stocks boosted performance relative to peers. Stock holdings in Telecommunications Services, Consumer Staples, and Industrials sectors hurt performance the most relative to peers. Being underweight Materials and Energy and overweight Industrials stocks also detracted from 2009 performance.

The Fund employs a multi-manager investment approach that brings together three subadvisers, each with a distinct investing style.The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

24

Subadviser Data

Artisan Partners Limited Partnership
Founded:	1995
Investment Style:	Contrarian value
Systematic Financial Management, L.P.
Founded:	1982
Investment Style:	Relative value
WEDGE Capital Management, L.L.P.
Founded:	1984
Investment Style:	Concentrated traditional value

Vantagepoint Select Value Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

25

Vantagepoint Select Value Fund vs. Russell Midcap Value Index:

Growth of $10,000 Invested October 30, 2007*

Vantagepoint Select Value Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	36.99%
Since Inception	-7.11%
Fund Inception Date	October 30, 2007

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the Russell Midcap Value Index, measures the performance of the mid-cap value segment of the U.S. equity universe and includes companies with lower price-to-book ratios and lower forecasted growth values. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the index.

26

Vantagepoint Aggressive Opportunities Fund

The Vantagepoint Aggressive Opportunities Fund’s objective is to offer high long-term capital appreciation.The principal investment strategy is to invest, under normal circumstances, primarily in common stocks of small- to mid-capitalization U.S. and foreign companies that the Fund’s subadvisers believe offer the opportunity for high capital appreciation.The Fund’s investments may also include debt instruments, preferred stock, foreign stocks and bonds, convertible securities, and derivatives such as futures and options.

Performance

The Vantagepoint Aggressive Opportunities Fund gained 50.95% in 2009.The Fund’s market benchmark, the Russell Midcap Growth Index, gained 46.29%, while its peer group benchmark, the Morningstar Mid-Cap Growth Funds Average, a group of mutual funds with similar investment objectives, gained 39.11%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied.The gains were led by the Information Technology sector, which gained nearly 62%. Financials, the hardest hit sector in 2008, rebounded and gained 17% for the year. Mid-capitalization indexes outperformed both large- and small-capitalization indexes, and growth-oriented strategies generally outperformed value-oriented strategies.

The Fund’s absolute and relative returns in 2009 were the result of favorable positioning both at the sector and security holdings level. All sectors contributed positively to the Fund’s absolute return, led by Information Technology and Consumer Discretionary sectors. Smaller capitalization stocks held by the Fund added to the Fund’s positive absolute results.

The Fund’s outperformance relative to its market benchmark was the result of favorable stock holdings in most sectors, particularly in the Consumer Discretionary, Information Technology and Consumer Staples sectors. However, specific stock holdings in Industrials, Energy and Materials sectors detracted from relative performance. Also, the Fund’s exposure to cash dampened results.

The Fund’s outperformance relative to its peer group average was largely the result of specific stock holdings in most sectors, particularly in the Consumer Discretionary, Healthcare and Industrials sectors. Sector allocation also aided performance, notably the underweight to Consumer Staples and overweight to Information Technology sectors. Relative to peers, the Fund’s modest underweight to mid-cap and larger-cap growth oriented stocks and its overweight to smaller-cap value stocks detracted from peer relative results.

The Fund employs a multi-manager investment approach that brings together four subadvisers, each with a distinct investing style. The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

27

Subadviser Data

Legg Mason Capital Management, Inc.
Founded:	1982
Investment Style:	Opportunistic growth
Southeastern Asset Management, Inc.
Founded:	1975
Investment Style:	Special situations
T. Rowe Price Associates, Inc.
Founded:	1937
Investment Style:	Emerging growth
TimesSquare Capital Management, LLC
Founded:	2004
Investment Style:	Growth opportunities

Vantagepoint Aggressive Opportunities Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

28

Vantagepoint Aggressive Opportunities Fund vs. Russell Midcap Growth Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Aggressive Opportunities Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	50.95%
Three Years	-2.21%
Five Years	3.72%
Ten Years	-0.31%
Fund Inception Date	October 1, 1994
Fund Registration Date	March 1, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the Russell Midcap Growth Index, is a subset of the Russell Midcap Index that measures the performance of the mid-cap growth segment of the U.S. equity universe and includes companies with higher price-to-book ratios and higher forecasted growth values. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the index.

29

Vantagepoint Discovery Fund

The Vantagepoint Discovery Fund’s objective is to offer long-term capital growth. The principal investment strategy is to invest, under normal circumstances, in a combination of U.S. common stocks of small capitalization companies, Russell 2000 Index futures contracts and fixed income securities.

Performance

The Vantagepoint Discovery Fund gained 39.32% in 2009.The Fund’s market benchmark, the Russell 2000 Index, gained 27.17%, while its peer group benchmark, the Morningstar Small Blend Funds Average, a group of mutual funds with similar investment objectives, gained 31.80%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. The gains were led by the Information Technology sector, which gained nearly 62%. Financials, the hardest hit sector in 2008, rebounded and gained 17% for the year. Mid-capitalization stocks outperformed both large- and small-capitalization stocks, and growth-oriented strategies generally outperformed value-oriented strategies.

The Fund’s absolute and relative returns in 2009 were the result of favorable positioning both at the sector and security holdings level. Nearly all sectors contributed positively to the Fund’s absolute return, led by the Information Technology, Consumer Discretionary and Financials sectors, while the Fund’s holdings in the Telecommunication Services sector posted a negative return for the year.The fixed income portion of the Fund representing the cash collateral that underlies the Fund’s equity futures contracts was also additive to Fund performance results, producing positive results from income generated by the holdings.

The Fund’s outperformance relative to its market benchmark was the result of favorable stock holdings in most sectors, particularly in the Financials sector, followed by the Consumer Staples and Industrials sectors. Allocations to Healthcare and Material stocks were also a benefit to relative performance. However, an underweight stance in the Consumer Discretionary sector hurt performance relative to the Fund’s market benchmark as did specific stock holdings in Information Technology and Telecommunication Services sectors.

The Fund’s outperformance relative to its peer average was largely the result of favorable stock holdings in most sectors, particularly in the Financials sector, followed by the Materials, Consumer Discretionary and Consumer Staples sectors. Overweight holdings in Technology and Energy stocks also benefitted the Fund’s performance. However, specific stock holdings in the Telecommunication Services sector hindered performance relative to peers. A small overweight to Healthcare stocks was also a slight detractor from performance relative to peers.

The Fund employs a multi-manager investment approach that brings together two subadvisers, each with a distinct investing style.The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

30

Subadviser Data

Payden & Rygel
Founded:	1983
Investment Style:	Enhanced index
Wellington Management Company, LLP
Founded:	1928
Investment Style:	Diversified small-blend

Vantagepoint Discovery Fund Asset Class Exposure
as of December 31, 2009*

* Portfolio exposures represent the market value of physical securities and the measurement of exposure through the derivative instruments held by the Fund as a percent of the Fund’s net assets. For the purpose of displaying this allocation information, exposure through derivatives is measured based on the value of the underlying assets, rate or index represented by the derivative. This measurement is different from the valuation used for the purposes of calculating the Fund’s net asset value. This measurement method is intended to reflect the “economic exposure” of the derivative - effectively, the market exposure to the Fund. This results in a total percentage in the chart that exceeds 100%.

31

Vantagepoint Discovery Fund
Fixed Income Sector Allocation as of December 31, 2009

The Fixed Income Sector Allocation reflected in this pie chart was calculated using the actual fixed income securities held by the Fund. This pie represents the portion of the Fund classified as Bonds in the Asset Class Exposure Table. The primary source of fixed income sector classification is BondEdge. Due to rounding, pie chart allocations may not add up to 100%.

Vantagepoint Discovery Fund
Equity Sector Allocation as of December 31, 2009

The Equity Sector Allocation reflected in this pie chart was calculated using the actual equity securities held by the Fund and blending them with the sectors represented in the Russell 2000 Index futures held by this Fund. This pie represents the portion of the Fund classified as Stocks in the Asset Class Exposure Table.
The primary source of equity sector classification is FactSet.
Due to rounding, pie chart allocations may not add up to 100%.

32

Vantagepoint Discovery Fund vs. Russell 2000 Index:

Growth of $10,000 Invested October 30, 2007*

Vantagepoint Discovery Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	39.32%
Since Inception	-9.68%
Fund Inception Date	October 30, 2007

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the Russell 2000 Index, measures the performance of the small-cap segment of the U.S. equity universe. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the index.

33

Vantagepoint International Fund

The Vantagepoint International Fund’s objective is to offer long-term capital growth and diversification by country.The principal investment strategy is to invest primarily in the common stocks of companies headquartered outside of the United States. The Fund will invest, under normal circumstances, at least 80% of its assets in foreign equity securities. The Fund may also invest a portion of its assets in U.S. or foreign bonds, U.S. stocks, convertible securities, and derivatives, including futures, options and forward currency contracts.

Performance

The Vantagepoint International Fund gained 29.97% in 2009.The Fund’s market benchmark, the Morgan Stanley Capital International Europe Australasia and Far East (MSCI EAFE) (Net) Index, gained 31.78%. The Fund’s peer group benchmark, the Morningstar Foreign Large Blend Funds Average, a group of mutual funds with similar investment objectives, gained 31.24%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied.The Information Technology sector led the gains, while Financials, the hardest hit sector in 2008, rebounded and produced attractive gains as a sector. Non-U.S. equity markets generally outperformed U.S. markets in 2009, particularly emerging markets, which after a poor second half in 2008, recovered and produced returns higher than the developed markets as a whole. From a U.S. dollar perspective, Asia (excluding Japan) produced the highest regional appreciation.

The Fund’s absolute returns in 2009 were the result of favorable positioning at the country, sector, and security holdings level. Exposure to countries such as the United Kingdom and France enhanced returns. Every sector produced positive returns, notably the Consumer Discretionary, Energy, Information Technology and Materials sectors. In spite of the U.S. Dollar rally during December, foreign currency exposure produced over 14% of the positive absolute return. Currency returns were the highest in North America and the United Kingdom.

The Fund’s underperformance relative to its market benchmark was the result of several primary factors. Stock holdings and underweight exposure in the Financials sector negatively impacted relative performance. Similarly, appreciation in Asia ex-Japan and United Kingdom securities was favorable but lagged that of the benchmark. Finally, the Fund’s foreign currency gains lagged those of the unmanaged market benchmark.The Fund’s relative performance benefitted from the Fund maintaining an underweight exposure to Japan, and specific stock holdings there. From a sector perspective, stock holdings in the Information Technology, Energy and Consumer Discretionary sectors added significant value relative to holdings in the market benchmark. Finally, an overweight exposure to North America, specifically Canada, aided relative results.

The Fund’s underperformance relative to its peer group average was largely the result of stock holdings in Latin America, Africa and emerging Europe, as well as an underweight to Australasia. Concurrently, underweight exposure and specific stock holdings in the Materials sector also detracted.The Fund’s stock holdings in Japan and Asia (developed and emerging) were additive. Relative performance was also aided by overweight exposure to Canada, and specific stock holdings in the Information Technology and Energy sectors.

In October, 2009, Mondrian Investment Partners Limited replaced Capital Guardian Trust Company as a subadviser to the Fund. Concurrently, the Fund’s target allocation to Artisan Partners Limited Partnership was reduced in conjunction with increased allocations to Walter Scott & Partners Limited and GlobeFlex Capital.The transition resulted in turnover of greater than a third of the Fund assets.The elevated volatility of the stock markets also resulted in higher trading by Fund subadvisers. As a result, overall portfolio turnover was unusually high for the year at 164%.

The Fund employs a multi-manager investment approach that brings together four subadvisers, each with a distinct investing style. The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

34

Subadviser Data

Artisan Partners Limited Partnership
Founded:	1995
Investment Style:	International growth opportunities
GlobeFlex Capital, LP
Founded:	1994
Investment Style:	International diversified all cap
Mondrian Investment Partners Limited
Founded:	1990
Investment Style:	Active, value-oriented global
Walter Scott & Partners Limited
Founded:	1983
Investment Style:	International concentrated growth

Vantagepoint International Fund
Country Allocation as of December 31, 2009

*Other represents countries with under a 1.5% individual weighting.

The primary source of country allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

35

Vantagepoint International Fund vs. MSCI EAFE (Net) Index and MSCI EAFE (Gross) Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint International Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	29.97%
Three Years	-5.37%
Five Years	3.71%
Ten Years	0.34%
Fund Inception Date	October 1, 1994
Fund Registration Date	March 1, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the MSCI EAFE Index (Net), is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada, and approximates the minimum possible dividend reinvestment after deduction of withholding tax according to MSCI Barra’s methodology. Prior to May 1, 2009, the Fund compared its performance to the MSCI EAFE (Gross) Index, which approximates the maximum possible dividend reinvestment. The Fund changed the index to which it compares its performance because the MSCI EAFE (Net) Index is considered to be a more appropriate comparison. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the index.

36

Vantagepoint Diversified Assets Fund*

The Vantagepoint Diversified Assets Fund’s objective is to offer long-term capital growth.The Fund uses several principal investment strategies to seek to achieve its objective. As of December 31, 2009, the Fund allocated its assets to: investments in derivative instruments that gave it investment exposure to the global equity, bond and currency markets; short and intermediate maturity U.S. and foreign fixed income securities; and high quality, short-term fixed income securities. In combination, the Fund’s above investment strategies seek to provide investment exposure to domestic and foreign stocks and bonds and foreign currencies through direct investment in such instruments or through the use of derivative instruments.

Performance

The Vantagepoint Diversified Assets Fund gained 6.64% during 2009.The Fund’s market benchmark, the Barclays Capital U.S. Intermediate Aggregate Bond Index, gained 6.46%. The Fund’s custom benchmark is an equal-weighted blend of the S&P 500 Index and the Barclays Capital U.S. Intermediate Aggregate Bond Index and returned 16.65%.

Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Emerging markets, after a poor second half in 2008, recovered and produced returns higher than the developed markets as a whole. From a U.S. dollar perspective, Asia (excluding Japan) produced the highest regional appreciation.

Fixed income markets were likewise marked by two distinct phases in 2009.The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year.The overall effect was a negative return for intermediate and longer-dated U. S. Treasury securities in 2009 and positive returns for all other sectors of the bond market.

The Fund’s absolute and relative performance versus its market benchmark in 2009 was the result of favorable performance within the Fund’s low duration strategy that benefited from continued strength in credit sectors of fixed income markets and within the Fund’s strategy that tactically allocates across global stocks, bonds and currencies. Allocations across global equities made strong contributions to performance. Although allocations across global equities generally contributed to performance, there were small detractors from short positions in specific markets, namely Canadian equities.

The Fund’s underperformance relative to its custom benchmark was the result of the Fund’s more conservative orientation during a year that as a whole favored riskier holdings, e.g. lower quality securities such as high-yield bonds.

The Fund’s portfolio turnover was over 100% for the year, primarily due to active trading employed by the Fund’s subadvisers that tactically allocate across global stocks, bonds and currencies.

In April 2009, Payden & Rygel replaced Drake Capital Management, LLC as a subadviser to the Fund.

The Fund employs a multi-manager investment approach that brings together a number of subadvisers, each with a distinct investing style.The multi-manager approach seeks to provide favorable performance results with more consistency over time than a single manager fund.

*As of January 4, 2010, the Fund’s name was changed to the Diversifying Strategies Fund. Also effective on that date were changes to the Fund’s principal investment strategies to include a convertible securities strategy and the addition of two new subadvisers to manage the Fund’s assets in that strategy. Please see the Fund’s January 4, 2010 prospectus for additional information.

37

Subadviser Data

Analytic Investors, LLC
Founded:	1970
Investment Style:	Global tactical asset allocation
Mellon Capital Management Corporation
Founded:	1983
Investment Style:	Global tactical asset allocation
Payden & Rygel
Founded:	1983
Investment Style:	Low duration bond
Payden & Rygel
Founded:	1983
Investment Style:	Short-duration fixed income

Vantagepoint Diversified Assets Fund Asset Class Exposure
as of December 31, 2009*

*Portfolio exposures represent the market value of physical securities and the measurement of exposure to asset classes through the derivative instruments held by the Fund as a percent of the Fund’s net assets. For the purpose of displaying this allocation information, exposure through derivatives is measured based on the value of the underlying assets, rate or index represented by the derivative. This measurement is different from the valuation used for the purposes of calculating the Fund’s net asset value. This measurement method is intended to reflect the “economic exposure” of the derivative - effectively, the market exposure to the Fund. This results in a total percentage reflected in the chart that exceeds 100%.

In its use of derivative instruments, the Fund may take both long positions (the values of which move in the same direction as the prices of the underlying investments, pools of investments, indexes or currencies) and short positions (the values of which move in the opposite direction as the prices of the underlying investments, pools of investments, indexes or currencies). These long and short positions are reflected in the chart above.

38

Vantagepoint Diversified Assets Fund vs. Barclays Capital U.S. Intermediate Aggregate Index

and Custom Benchmark: Growth of $10,000 Invested October 30, 2007*

Vantagepoint Diversified Assets Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	6.64%
Since Inception	-0.28%
Fund Inception Date	October 30, 2007

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s market benchmark, the Barclays Capital U.S. Intermediate Aggregate Index, is comprised of U.S. Government, mortgage, corporate, and asset-backed securities with maturities of one to ten years. The Fund’s custom benchmark is an equal-blend of the Barclays Capital U.S. Intermediate Aggregate Index and the S&P 500 Index, which consists of 500 companies representing larger capitalization stocks traded in the U.S. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.The Fund’s portfolio may differ significantly from the securities in the indexes.

39

Vantagepoint Index Funds

The Vantagepoint Index Funds follow an indexed or “passively managed” approach to investing.The Funds invest in securities that are selected to approximate the investment characteristics and performance of their respective benchmarks. To minimize transaction costs, the Index Funds, with the exception of the 500 Stock Index Fund, use sampling techniques to approximate their benchmarks’ characteristics using fewer securities than are contained in the Index.

1)	The Vantagepoint Core Bond Index Fund’s objective is to offer current income by approximating the performance of the Barclays Capital U.S. Aggregate Bond Index.
2)	The Vantagepoint 500 Stock Index Fund’s objective is to offer long-term capital growth by approximating the performance of the S&P 500 Index.
3)	The Vantagepoint Broad Market Index Fund’s objective is to offer long-term capital growth by approximating the performance of the Wilshire 5000 Total Market Index.
4)	The Vantagepoint Mid/Small Company Index Fund’s objective is to offer long-term capital growth by approximating the performance of the Wilshire 4500 Completion Index.
5)	The Vantagepoint Overseas Equity Index Fund’s objective is to offer long-term capital growth and diversification by approximating the performance of the Morgan Stanley Capital International (MSCI) Europe Australasia Far East (EAFE) (Net) Index.

Performance & Commentary

During the past year, equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market.

The Vantagepoint Core Bond Index Fund gained 5.57% (Class I shares) and 5.74% (Class II shares). The Fund’s market benchmark, the Barclays Capital U.S. Aggregate Bond Index, gained 5.93%.

The Vantagepoint 500 Stock Index Fund gained 26.13% (Class I shares) and 26.35% (Class II shares). The Fund’s market benchmark, the S&P 500 Index, gained 26.46%.

The Vantagepoint Broad Market Index Fund gained 27.78% (Class I shares) and 28.04% (Class II shares). The Fund’s market benchmark, the Wilshire 5000 Total Market Index, gained 28.30%.

The Vantagepoint Mid/Small Company Index Fund gained 36.19% (Class I shares) and 36.47% (Class II shares). The Fund’s market benchmark, the Wilshire 4500 Completion Index, gained 36.99%.

The Vantagepoint Overseas Equity Index Fund gained 28.63% (Class I shares) and 28.94% (Class II shares). The Fund’s market benchmark, the MSCI EAFE (Net) Index. advanced 32.46%.

40

Subadviser Data

Mellon Capital Management Corporation
Founded:	1983
Investment Style:	Index portfolio

Vantagepoint Core Bond Index Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is BondEdge.

Due to rounding, pie chart allocations may not add up to 100%.

41

Vantagepoint Core Bond Index Fund Class I vs. Barclays Capital U.S. Aggregate Bond Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Core Bond Index Fund Class II vs. Barclays Capital U.S. Aggregate Bond Index:

Growth of $10,000 Invested December 31, 1999*

42

Vantagepoint Core Bond Index Fund

Average Annual Total Return for the periods ended December 31, 2009*

	Class I Shares	Class II Shares
One Year	5.57%	5.74%
Three Years	5.57%	5.75%
Five Years	4.49%	4.70%
Ten Years	5.94%	6.16%
Fund Inception Date	June 2, 1997	April 5, 1999
Offering Date	March 1, 1999	April 5, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money.The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s benchmark, the Barclays Capital U.S. Aggregate Bond Index, consists of investment-grade U.S. fixed income securities. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

43

Vantagepoint 500 Stock Index Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

Vantagepoint 500 Stock Index Fund Class I vs. S&P 500 Index:

Growth of $10,000 Invested December 31, 1999*

44

Vantagepoint 500 Stock Index Fund Class II vs. S&P 500 Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint 500 Stock Index Fund

Average Annual Total Return for the periods ended December 31, 2009*

	Class I Shares	Class II Shares
One Year	26.13%	26.35%
Three Years	-5.99%	-5.81%
Five Years	0.00%	0.20%
Ten Years	-1.38%	-1.19%
Fund Inception Date	June 2, 1997	April 5, 1999
Offering Date	March 1, 1999	April 5, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s benchmark, the S&P 500 Index, consists of 500 companies representing larger capitalization stocks traded in the U.S. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

45

Vantagepoint Broad Market Index Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

Vantagepoint Broad Market Index Fund Class I vs. Wilshire 5000 Total Market Index:

Growth of $10,000 Invested December 31, 1999*

46

Vantagepoint Broad Market Index Fund Class II vs. Wilshire 5000 Total Market Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Broad Market Index Fund

Average Annual Total Return for the periods ended December 31, 2009*

	Class I Shares	Class II Shares
One Year	27.78%	28.04%
Three Years	-5.43%	-5.26%
Five Years	0.68%	0.89%
Ten Years	-0.66%	-0.47%
Fund Inception Date	October 1, 1994	April 5, 1999
Offering Date	March 1, 1999	April 5, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Wilshire 5000 Total Market Index consists of all U.S. equity securities with readily available price data and is calculated using a float-adjusted market capitalization weighting.The float adjusted methodology adjusts an individual stock’s market capitalization to account for (by excluding) shares that may be restricted or otherwise unavailable for purchase. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

47

Vantagepoint Mid/Small Company Index Fund
Sector Allocation as of December 31, 2009

The primary source of sector allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

Vantagepoint Mid/Small Company Index Fund Class I vs. Wilshire 4500 Completion Index:

Growth of $10,000 Invested December 31, 1999*

48

Vantagepoint Mid/Small Company Index Fund Class II vs. Wilshire 4500 Completion Index:

Growth of $10,000 Invested December 31, 1999*

Vantagepoint Mid/Small Company Index Fund

Average Annual Total Return for the periods ended December 31, 2009*

	Class I Shares	Class II Shares
One Year	36.19%	36.47%
Three Years	-4.24%	-4.04%
Five Years	2.06%	2.27%
Ten Years	1.50%	1.70%
Fund Inception Date	June 2, 1997	April 5, 1999
Offering Date	March 1, 1999	April 5, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Wilshire 4500 Completion Index consists of all small- and mid-cap stocks. It is constructed using the Wilshire 5000 Total Market Index securities with the companies in the S&P 500 Index removed and is calculated using a float-adjusted market capitalization weighting.The float-adjusted methodology adjusts an individual stock’s market capitalization to account for (by excluding) shares that may be restricted or otherwise unavailable for purchase. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

49

Vantagepoint Overseas Equity Index Fund
Country Allocation as of December 31, 2009

*Other represents countries with under a 1.5% individual weighting.

The primary source of country allocation classification is FactSet.

Due to rounding, pie chart allocations may not add up to 100%.

Vantagepoint Overseas Equity Index Fund Class I vs. MSCI EAFE (Net) Index and MSCI EAFE Free (Gross) Index:

Growth of $10,000 Invested December 31, 1999*

50

Vantagepoint Overseas Equity Index Fund Class II vs. MSCI EAFE (Net) Index

and MSCI EAFE Free (Gross) Index: Growth of $10,000 Invested December 31, 1999*

Vantagepoint Overseas Equity Index Fund

Average Annual Total Return for the periods ended December 31, 2009*

`
	Class I Shares	Class II Shares
One Year	28.63%	28.94%
Three Years	-6.35%	-6.16%
Five Years	3.02%	3.25%
Ten Years	0.55%	0.77%
Fund Inception Date	June 2, 1997	April 5, 1999
Offering Date	March 1, 1999	April 5, 1999

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Fund’s benchmark, the MSCI EAFE (Net) Index, is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada and approximates the maximum possible dividend reinvestment after deduction of withholding tax according to MSCI Barra’s methodology. Prior to May 1, 2009, the Fund compared its performance to the MSCI EAFE Free (Gross) Index, which is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.The Fund changed the index to which it compares its performance because the MSCI EAFE (Net) Index is considered to be a more appropriate comparison. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

51

Vantagepoint Model Portfolio Savings Oriented Fund

The Vantagepoint Model Portfolio Savings Oriented Fund’s objective is to offer capital preservation, reasonable current income and some capital growth while seeking to limit risk. As of December 31, 2009, the principal investment strategy was to invest in a combination of underlying Vantagepoint Funds to seek to obtain exposure to approximately 65% fixed income investments, 25% equity investments, and 10% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments (a “multi-strategy” Fund) by investing in the following Vantagepoint Funds at target allocations within the percentage ranges indicated:*

FIXED ICOME
Vantagepoint Low Duration Bond Fund	38%-48%
Vantagepoint Core Bond Index Fund (Class I)	8%-18%
Vantagepoint Inflation Protected Securities Fund	4%-14%
EQUIRY
Vantagepoint Equity Income Fund	5%-15%
Vantagepoint Growth & Income Fund	5%-15%
Vantagepoint International Fund	0%-10%
MULTI -STRATEGY
Vantagepoint Diversified Assets Fund	8%-12%

Performance

The Vantagepoint Model Portfolio Savings Oriented Fund gained 15.18% in 2009.The Fund’s market benchmark, the Barclays Capital U.S. Intermediate Aggregate Bond Index, gained 6.46%, while the Fund’s peer group benchmark, the Morningstar Conservative Allocation Funds Average, a group of mutual funds with similar investment objectives, gained 20.77%.The Fund’s custom benchmark gained 11.59%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Fixed income markets were marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market. Equities generally outperformed bonds for the year, after experiencing significant lows in March that reversed and ultimately produced positive returns for investors who remained in the equity market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009.

All the underlying funds of the Model Portfolio Savings Oriented Fund earned positive returns in 2009. The Core Bond Index Fund (Class I) gained 5.57%, the Low Duration Bond Fund gained 10.63%, and the Inflation Protected Securities Fund returned 9.75%. Even stronger results came from the Fund’s three equity fund investments – the Equity Income Fund, the Growth & Income Fund, and the International Fund – each producing returns near or in excess of 30%. The Fund’s allocation to the Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

52

The Fund outperformed its market benchmark due to its allocation to equity funds, which meaningfully outperformed bonds as represented by the Fund’s market benchmark. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s underlying fixed income funds also contributed to the outperformance, with the exception of the Core Bond Index Fund, as they outperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group due to an underweight to equity funds in comparison to peers during the strong equity rally, and an overweight to conservative fixed income funds, investing in higher-quality and also lower duration fixed income securities, compared to those held by its peers during the period when lower credit quality fixed income securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Model Portfolio Savings Oriented Fund
Underlying Fund Allocation as of December 31, 2009

53

Vantagepoint Model Portfolio Savings Oriented Fund vs. Barclays Capital U.S. Intermediate Aggregate

Bond Index and Custom Benchmark: Growth of $10,000 Invested December 4, 2000*

Vantagepoint Model Portfolio Savings Oriented Fund

Average Annual Total Return for the periods ended December 31, 2009*

One Year	15.18%
Three Years	2.60%
Five Years	3.54%
Ten Years	4.09%
Fund Inception Date	February 9, 1995
Fund Registration Date	December 4, 2000

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance information for periods prior to December 4, 2000, is of a commingled fund that had the same investment objectives and policies as the Fund and was advised by an affiliate of the Fund’s adviser. This past performance was adjusted at the time of the Fund’s registration to reflect the 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. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money.The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/SIPC. 800-669-7400.

The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class. The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

54

Vantagepoint Model Portfolio Conservative Growth Fund

The Vantagepoint Model Portfolio Conservative Growth Fund’s objective is to offer reasonable current income and capital preservation, with modest potential for capital growth. As of December 31, 2009, the principal investment strategy was to invest in a combination of underlying Vantagepoint Funds to seek to obtain exposure to approximately 50% fixed income investments, 40% equity investments, and 10% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments (a “multi-strategy” Fund) by investing in the following Vantagepoint Funds at target allocations within the percentage ranges indicated:*

FIXED INCOME
Vantagepoint Low Duration Bond Fund	18%-28%
Vantagepoint Core Bond Index Fund (Class I)	16%-26%
Vantagepoint Inflation Protected Securities Fund	2%-12%
EQUITY
Vantagepoint Equity Income Fund	6%-16%
Vantagepoint Growth & Income Fund	4%-14%
Vantagepoint Growth Fund	1%-11%
Vantagepoint Select Value Fund	0%-10%
Vantagepoint Aggressive Opportunities Fund	0%-10%
Vantagepoint International Fund	3%-13%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	8%-12%

Performance

The Model Portfolio Conservative Growth Fund gained 18.50% in 2009. The Fund’s market benchmark, the Barclays Capital U.S. Intermediate Aggregate Bond Index, gained 6.46%, while the Fund’s peer group benchmark, the Morningstar Conservative Allocation Funds Average, a group of mutual funds with similar investment objectives, gained 20.77%. The Fund’s custom benchmark gained 14.64%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Fixed income markets were marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market. Equities generally outperformed bonds for the year, after experiencing significant lows in March that reversed and ultimately produced positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009.

All the underlying funds of the Model Portfolio Conservative Growth Fund earned positive returns in 2009. The Core Bond Index Fund (Class I) rose 5.57%, the Low Duration Bond Fund gained 10.63%, and the Inflation Protected Securities Fund increased 9.75%. Even stronger results came from the Fund’s six equity fund investments – the Equity Income Fund, the Growth & Income Fund, the Growth Fund, the Select Value Fund, the Aggressive Opportunities Fund, and the International Fund – each producing returns near or in excess of 30%. The Fund’s allocation to the Diversified Assets Fund was also

55

additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

The Fund outperformed its market benchmark due to its allocation to equity funds, which meaningfully outperformed the bonds represented by the Fund’s market benchmark. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s underlying fixed income funds also contributed to the outperformance, with the exception of the Core Bond Index Fund, as they outperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group due to its conservative positioning in higher-quality and lower duration fixed income securities, compared to those held by its peers during the period when lower credit quality fixed income securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Model Portfolio Conservative Growth Fund
Underlying Fund Allocation as of December 31, 2009

56

Vantagepoint Model Portfolio Conservative Growth Fund vs. Barclays Capital U.S. Intermediate

Aggregate Bond Index and Custom Benchmark: Growth of $10,000 Invested December 4, 2000*

Vantagepoint Model Portfolio Conservative Growth Fund
Average Annual Total Return for the periods ended December 31, 2009*
One Year	18.50%
Three Years	1.35%
Five Years	3.31%
Ten Years	3.49%
Fund Inception Date	April 1, 1996
Fund Registration Date	December 4, 2000

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance information for periods prior to December 4, 2000, when the Fund began operating, is of a commingled fund that had the same investment objectives and policies as the Fund and was advised by an affiliate of the Fund’s adviser. This past performance was adjusted at the time of the Fund’s registration to reflect the 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. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/SIPC. 800-669-7400.

The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years.The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class. The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

57

Vantagepoint Model Portfolio Traditional Growth Fund

The Vantagepoint Model Portfolio Traditional Growth Fund’s objective is to offer moderate capital growth and reasonable current income. As of December 31, 2009, the principal investment strategy of the Fund was to invest in a combination of underlying Vantagepoint Funds to seek to obtain exposure to approximately 30% fixed income investments, 60% equity investments, and 10% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments (a “multi-strategy” Fund) by investing in the following Vantagepoint Funds at target allocations within the percentage ranges indicated:*

FIXED INCOME
Vantagepoint Low Duration Bond Fund	3%-13%
Vantagepoint Core Bond Index Fund (Class I)	13%-23%
Vantagepoint Inflation Protected Securities Fund	0%-10%
EQUITY
Vantagepoint Equity Income Fund	7%-17%
Vantagepoint Growth & Income Fund	7%-17%
Vantagepoint Growth Fund	5%-15%
Vantagepoint Select Value Fund	0%-10%
Vantagepoint Aggressive Opportunities Fund	0%-10%
Vantagepoint Discovery Fund	0%-10%
Vantagepoint International Fund	7%-17%
MULTI - SSTRATEGY
Vantagepoint Diversified Assets Fund	8%-12%

Performance

The Vantagepoint Model Portfolio Traditional Growth Fund gained 23.72% in 2009.The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Moderate Allocation Funds Average, a group of mutual funds with similar investment objectives, gained 24.13%.The Fund’s custom benchmark gained 18.66%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market, albeit at levels generally lower than those of the equity markets.

All the underlying funds of the Model Portfolio Traditional Growth Fund earned positive returns in 2009. The Fund’s seven underlying equity funds produced strong returns ranging from 29.97% for the International Fund to 50.95% for the Aggressive Opportunities Fund. The Fund’s three underlying bond funds returned between 5.57% for the Core Bond Index

58

Fund (Class I) and 10.63% for the Low Duration Bond Fund. The Fund’s allocation to the Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

The Fund underperformed its market benchmark due to its allocation to non-equity funds, which meaningfully underperformed equities as represented by the Fund’s market benchmark. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s underlying fixed income funds also contributed to the outperformance, with the exception of the Core Bond Index Fund, as they outperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group due to an underweight to equity funds in comparison to peers during the strong equity rally, and an overweight to fixed income funds investing in higher-quality and lower duration fixed income securities, compared to those held by its peers during the period when lower quality fixed income securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Model Portfolio Traditional Growth Fund
Underlying Fund Allocation as of December 31, 2009

59

Vantagepoint Model Portfolio Traditional Growth Fund vs. S&P 500 Index

and Custom Benchmark: Growth of $10,000 Invested December 4, 2000*

Vantagepoint Model Portfolio Traditional Growth Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	23.72%
Three Years	-0.41%
Five Years	2.91%
Ten Years	2.63%
Fund Inception Date	April 1, 1996
Fund Registration Date	December 4, 2000

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance information for periods prior to December 4, 2000, when the Fund began operating, is of a commingled fund that had the same investment objectives and policies as the Fund and was advised by an affiliate of the Fund’s adviser. This past performance was adjusted at the time of the Fund’s registration to reflect the 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. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/SIPC. 800-669-7400.

The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S. The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class. The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

60

Vantagepoint Model Portfolio Long-Term Growth Fund

The Vantagepoint Model Portfolio Long-Term Growth Fund’s objective is to offer high long-term capital growth and modest current income. As of December 31, 2009, the principal investment strategy of the Fund was to invest in a combination of underlying Vantagepoint Funds to seek to obtain exposure to approximately 15% fixed income investments, 75% equity investments, and 10% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments (a “multi-strategy” Fund) in the following Vantagepoint Funds at target allocations within the percentage ranges indicated:*

FIXED INCOME
Vantagepoint Core Bond Index Fund (Class I)	10%-20%
EQUITY
Vantagepoint Equity Income Fund	8%-18%
Vantagepoint Growth & Income Fund	8%-18%
Vantagepoint Growth Fund	7%-17%
Vantagepoint Select Value Fund	4%-14%
Vantagepoint Aggressive Opportunities Fund	4%-14%
Vantagepoint Discovery Fund	0%-10%
Vantagepoint International Fund	11%-21%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	8%-12%

Performance

The Vantagepoint Model Portfolio Long-Term Growth Fund gained 27.67% in 2009. The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Large Blend Funds Average, a group of mutual funds with similar investment objectives, gained 28.17%. The Fund’s custom benchmark gained 21.62%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market, albeit at levels generally lower than those of the equity markets.

All the underlying funds of the Model Portfolio Long-Term Growth Fund earned positive returns in 2009. The Fund’s seven underlying equity funds produced strong returns ranging from 29.97% for the International Fund to 50.95% for the Aggressive Opportunities Fund. The Fund’s single fixed income investment, the Core Bond Index Fund (Class I), rose 5.57%. The Fund’s allocation to the Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

61

The Fund outperformed its equity market benchmark due to the strong relative performance of the Fund’s underlying equity funds, which more than offset the relative drag resulting from the Fund’s investments in non-equity funds that produced more muted results. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s allocation to the Core Bond Index Fund modestly detracted from performance as it underperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group due to an underweighted exposure to equities compared to peers during the strong equity rally.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Model Portfolio Long-Term Growth Fund
Underlying Fund Allocation as of December 31, 2009

62

Vantagepoint Model Portfolio Long-Term Growth Fund vs. S&P 500 Index

and Custom Benchmark: Growth of $10,000 Invested December 4, 2000*

Vantagepoint Model Portfolio Long-Term Growth Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	27.67%
Three Years	-1.72%
Five Years	2.75%
Ten Years	1.85%
Fund Inception Date	April 1, 1996
Fund Registration Date	December 4, 2000

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance information for periods prior to December 4, 2000, when the Fund began operating, is of a commingled fund that had the same investment objectives and policies as the Fund and was advised by an affiliate of the Fund’s adviser. This past performance was adjusted at the time of the Fund’s registration to reflect the 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. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/SIPC. 800-669-7400

.The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S. The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class. The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

63

Vantagepoint Model Portfolio All-Equity Growth Fund

The Vantagepoint Model Portfolio All-Equity Growth Fund’s objective is to offer high long-term capital growth. The principal investment strategy of the Fund is to invest, under normal circumstances, 100% in equity Funds by investing in Vantagepoint Funds whose assets are invested, under normal circumstances, at least 80% in equity securities or instruments that provide equity exposure. The investment strategy is implemented by investing in the following Vantagepoint Funds at target allocations within the percentage ranges indicated:

EQUITY
Vantagepoint Equity Income Fund	13%-23%
Vantagepoint Growth & Income Fund	12%-22%
Vantagepoint Growth Fund	12%-22%
Vantagepoint Select Value Fund	5%-15%
Vantagepoint Aggressive Opportunities Fund	5%-15%
Vantagepoint Discovery Fund	4%-14%
Vantagepoint International Fund	15%-25%

Performance

The Vantagepoint Model Portfolio All-Equity Growth Fund gained 35.07% in 2009. The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Large Blend Funds Average, a group of mutual funds with similar investment objectives, gained 28.17%. The Fund’s custom benchmark gained 27.58%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009.

All the underlying funds of the Model Portfolio All-Equity Growth Fund earned positive returns in 2009. Equity markets realized strong gains across geographic, style, and size segments. The Fund’s seven underlying equity funds produced strong returns ranging from 29.97% for the International Fund to 50.95% for the Aggressive Opportunities Fund. Please refer to each underlying fund’s commentary within this report for more information.

The Fund outperformed its equity market benchmark due to the strong relative performance of the Fund’s underlying equity funds. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying U.S. equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s allocation to the International Fund modestly detracted from performance as it underperformed the non-U.S. equity index (the MSCI EAFE (Net) Index) used in calculating the custom benchmark.

The Fund outperformed its peer group due to an overweight exposure to international and small-cap equities in comparison to other funds in its peer group. Smaller-cap equities outperformed larger-cap equities and international equities outperformed domestic equities in 2009.

64

Vantagepoint Model Portfolio All-Equity Growth Fund
Underlying Fund Allocation as of December 31, 2009

Vantagepoint Model Portfolio All-Equity Growth Fund vs. S&P 500 Index

and Custom Benchmark: Growth of $10,000 Invested December 4, 2000*

65

Vantagepoint Model Portfolio All-Equity Growth Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	35.07%
Three Years	-4.34%
Five Years	1.70%
Since Inception	0.30%
Fund Inception Date	October 1, 2000
Fund Registration Date	December 4, 2000

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance information for periods prior to December 4, 2000, when the Fund began operating, is of a commingled fund that had the same investment objectives and policies as the Fund and was advised by an affiliate of the Fund’s adviser. This past performance was adjusted at the time of the Fund’s registration to reflect the 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. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/SIPC. 800-669-7400.

The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S. The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes. Those asset class benchmarks are the S&P 500 Index and the MSCI EAFE (Net) Index.The MSCI Europe Australasia Far East (EAFE) (Net) Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada, and approximates the minimum possible dividend reinvestment after deduction of withholding tax according to MSCI Barra’s methodology. Should the percentage allocations to those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

66

Vantagepoint Milestone Retirement Income Fund

The Vantagepoint Milestone Retirement Income Fund’s objective is to seek to offer current income and opportunities for capital growth that have limited risk. This Fund may be appropriate for investors who are very close to retirement or are already in retirement. As of December 31, 2009, the Fund’s principal investment strategy was to invest in a combination of underlying Vantagepoint Funds to seek to obtain exposure to approximately 60% fixed income investments, approximately 30% equity investments, and 10% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments (a “multi-strategy” Fund) by investing in the following Vantagepoint Funds at target allocations within the percentage ranges indicated:*

FIXED INCOME
Vantagepoint Low Duration Bond Fund	35%-45%
Vantagepoint Core Bond Index Fund (Class I)	6%-16%
Vantagepoint Inflation Protected Securities Fund	4%-14%
EQUITY
Vantagepoint Equity Income Fund	7%-17%
Vantagepoint Growth & Income Fund	7%-17%
Vantagepoint International Fund	1%-11%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	5%-15%

Performance

The Vantagepoint Milestone Retirement Income Fund gained 16.53% in 2009. The Fund’s market benchmark, the Barclays Capital U.S. Intermediate Aggregate Bond Index, gained 6.46%, while the Fund’s peer group benchmark, the Morningstar Retirement Income Funds Average, a group of mutual funds with similar investment objectives, gained 18.36%. The Fund’s custom benchmark gained 12.61%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages, corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Fixed income markets were marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market. Equities generally outperformed bonds for the year, after experiencing significant lows in March that reversed and ultimately produced positive returns for investors who remained in the equity market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009.

All the underlying funds of the Milestone Retirement Income Fund earned positive returns in 2009. The Core Bond Index Fund (Class I) rose 5.57%, the Low Duration Bond Fund gained 10.63%, and the Inflation Protected Securities Fund increased 9.75%. Even stronger results came from the Fund’s three equity fund investments – the Equity Income Fund, the Growth & Income Fund, and the International Fund – each producing returns near or in excess of 30%. The Fund’s allocation to the Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

67

The Fund outperformed its market benchmark due to its allocation to equity funds, which meaningfully outperformed bonds as represented by the Fund’s market benchmark. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying U.S. equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s underlying fixed income funds also contributed to the outperformance, with the exception of the Core Bond Index Fund, as they outperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group average due to conservative positioning during the year. It had an underweighted exposure to equities relative to its peer group during the strong equity market rally in 2009. In addition, the fixed income exposure in the Fund generally had a higher average credit quality than its peer group during the period when lower credit quality securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Milestone Retirement Income Fund
Underlying Fund Allocation as of December 31, 2009

68

Vantagepoint Milestone Retirement Income Fund vs. Barclays Capital U.S. Intermediate Aggregate

Bond Index and Custom Benchmark: Growth of $10,000 Invested January 3, 2005*

Vantagepoint Milestone Retirement Income Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	16.53%
Three Years	2.15%
Five Years	3.45%
Since Inception	3.45%
Fund Inception Date	January 3, 2005

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class. The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

69

Vantagepoint Milestone 2010 Fund

The Vantagepoint Milestone 2010 Fund’s objective is to offer high total return consistent with the Fund’s current asset allocation. As of December 31, 2009, the Fund’s principal investment strategy was to invest in a combination of underlying Vantagepoint Funds using an asset allocation strategy designed for investors expecting to retire in or begin withdrawals around the year 2010.

At year-end, the Fund was invested in nine Vantagepoint Funds at target allocations within the percentage ranges indicated:

FIXED INCOME
Vantagepoint Low Duration Bond Fund	33%-43%
Vantagepoint Core Bond Index Fund (Class I)	6%-16%
Vantagepoint Inflation Protected Securities Fund	3%-13%
EQUITY
Vantagepoint Equity Income Fund	8%-18%
Vantagepoint Growth & Income Fund	7%-17%
Vantagepoint Growth Fund	0%-10%
Vantagepoint Mid/Small Company Index Fund (Class I)	0%-10%
Vantagepoint International Fund	0%-10%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	5%-15%

In 2009, the Fund’s strategy was to periodically decrease its allocation to equity Funds and correspondingly increase its allocation to fixed income Funds and the multi-strategy Fund so that by June 30 of the year 2010, the Fund’s asset allocation would be approximately 30% equity Funds, 60% fixed income Funds, and 10% in a multi-strategy Fund.*

Performance

The Vantagepoint Milestone 2010 Fund gained 17.71% in 2009. The Fund’s market benchmark, the Barclays Capital U.S. Intermediate Aggregate Bond Index, gained 6.46%, while the Fund’s peer group benchmark, the Morningstar Target Date 2000-2010 Funds Average, a group of mutual funds with similar investment objectives, gained 22.42%. The Fund’s custom benchmark gained 13.45%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages, corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Fixed income markets were marked by two distinct phases in 2009.The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market. Equities generally outperformed bonds for the year, after experiencing significant lows in March that reversed and ultimately produced positive returns for investors who remained in the equity market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009.

All the underlying funds of the Milestone 2010 Fund earned positive returns in 2009. The Fund’s five underlying equity funds each produced strong returns near or in excess of 30%. The Fund’s three underlying bond funds returned between 5.57% for the Core Bond Index Fund (Class I) and 10.63% for the Low Duration Bond Fund. The Fund’s allocation to the

70

Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

The Fund outperformed its market benchmark due to its allocation to equity funds, which meaningfully outperformed bonds as represented by the Fund’s market benchmark. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s underlying fixed income funds also contributed to the outperformance, with the exception of the Core Bond Index Fund, as they outperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group average due to conservative positioning during the year. It had an underweighted exposure to equities relative to its peer group during the strong equity market rally in 2009. In addition, the fixed income exposure in the Fund generally had a higher average credit quality than its peer group during the period when lower credit quality securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Milestone 2010 Fund
Underlying Fund Allocation as of December 31, 2009

71

Vantagepoint Milestone 2010 Fund vs. Barclays Capital U.S. Intermediate Aggregate Bond Index

and Custom Benchmark: Growth of $10,000 Invested January 3, 2005*

Vantagepoint Milestone 2010 Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	17.71%
Three Years	1.17%
Five Years	3.38%
Since Inception	3.38%
Fund Inception Date	January 3, 2005

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class. The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

72

Vantagepoint Milestone 2015 Fund

The Vantagepoint Milestone 2015 Fund’s objective is to offer high total return consistent with the Fund’s current asset allocation. As of December 31, 2009, the Fund’s principal investment strategy was to invest in a combination of underlying Vantagepoint Funds using an asset allocation strategy designed for investors expecting to retire in or begin withdrawals around the year 2015.

At year-end, the Fund was invested in nine Vantagepoint Funds at target allocations within the percentage ranges indicated:

FIXED INCOME
Vantagepoint Low Duration Bond Fund	15%-25%
Vantagepoint Core Bond Index Fund (Class I)	8%-18%
Vantagepoint Inflation Protected Securities Fund	0%-10%
EQUITY
Vantagepoint Equity Income Fund	13%-23%
Vantagepoint Growth & Income Fund	6%-16%
Vantagepoint Growth Fund	2%-12%
Vantagepoint Mid/Small Company Index Fund (Class I)	0%-10%
Vantagepoint International Fund	5%-15%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	5%-15%

In 2009, the Fund’s strategy was to periodically decrease its allocation to equity Funds and correspondingly increase its allocation to fixed income Funds and the multi-strategy Fund so that by June 30 of the year 2015, the Fund’s asset allocation would be approximately 30% equity Funds, 60% fixed income Funds, and 10% in a multi-strategy Fund.*

Performance

The Vantagepoint Milestone 2015 Fund gained 21.84% in 2009. The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Target Date 2011-2015 Funds Average, a group of mutual funds with similar investment objectives, gained 23.55%. The Fund’s custom benchmark gained 17.06%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages, corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009.The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market, albeit at levels generally lower than those of the equity markets.

All the underlying funds of the Milestone 2015 Fund earned positive returns in 2009. The Fund’s five underlying equity funds each produced strong returns near or in excess of 30%. The Fund’s three underlying bond funds returned between 5.57% for the Core Bond Index Fund (Class I) and 10.63% for the Low Duration Bond Fund. The Fund’s allocation to the

73

Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

The Fund underperformed its market benchmark due to its allocation to non-equity funds, which meaningfully underperformed equities as represented by the Fund’s market benchmark. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s underlying fixed income funds also contributed to the outperformance, with the exception of the Core Bond Index Fund, as they outperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group average due to conservative positioning during the year. It had an underweighted exposure to equities relative to its peer group during the strong equity market rally in 2009. In addition, the fixed income exposure in the Fund generally had a higher average credit quality than its peer group during the period when lower credit quality securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Milestone 2015 Fund
Underlying Fund Allocation as of December 31, 2009

74

Vantagepoint Milestone 2015 Fund vs. S&P 500 Index and Custom Benchmark:

Growth of $10,000 Invested January 3, 2005*

Vantagepoint Milestone 2015 Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	21.84%
Three Years	-0.15%
Five Years	3.18%
Since Inception	3.18%
Fund Inception Date	January 3, 2005

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S.The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class. The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

75

Vantagepoint Milestone 2020 Fund

The Vantagepoint Milestone 2020 Fund’s objective is to offer high total return consistent with the Fund’s current asset allocation. As of December 31, 2009, the Fund’s principal investment strategy was to invest in a combination of underlying Vantagepoint Funds using an asset allocation strategy designed for investors expecting to retire in or begin withdrawals around the year 2020.

At year-end, the Fund was invested in eight Vantagepoint Funds at target allocations within the percentage ranges indicated:

FIXED INCOME
Vantagepoint Low Duration Bond Fund	4%-14%
Vantagepoint Core Bond Index Fund (Class I)	14%-24%
EQUITY
Vantagepoint Equity Income Fund	16%-26%
Vantagepoint Growth & Income Fund	6%-16%
Vantagepoint Growth Fund	3%-13%
Vantagepoint Mid/Small Company Index Fund (Class I)	3%-13%
Vantagepoint International Fund	7%-17%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	5%-15%

In 2009, the Fund’s strategy was to periodically decrease its allocation to equity Funds and correspondingly increase its allocation to fixed income Funds and the multi-strategy Fund so that by June 30 of the year 2020, the Fund’s asset allocation would be approximately 30% equity Funds, 60% fixed income Funds, and 10% in a multi-strategy Fund.*

Performance

The Vantagepoint Milestone 2020 Fund gained 23.43% in 2009. The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Target Date 2016-2020 Funds Average, a group of mutual funds with similar investment objectives, gained 24.25%. The Fund’s custom benchmark gained 18.99%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages, corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market, albeit at levels generally lower than those of the equity markets.

All the underlying funds of the Milestone 2020 Fund earned positive returns in 2009.The Fund’s five underlying equity funds each produced strong returns near or in excess of 30%. The Fund’s two underlying bond funds returned 5.57% for the Core Bond Index Fund (Class I) and 10.63% for the Low Duration Bond Fund. The Fund’s allocation to the Diversified

76

Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

The Fund underperformed its market benchmark due to its allocation to non-equity funds, which meaningfully underperformed equities as represented by the Fund’s market benchmark. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s allocation to fixed income funds was also additive, despite mixed results from the underlying funds compared to the fixed income benchmark (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund also underperformed its peer group due to conservative positioning during the year. It had an underweighted exposure to equities relative to its peer group average during the strong equity market rally in 2009. In addition, the fixed income exposure in the Fund generally had a higher average credit quality than its peer group during the period when lower credit quality securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Milestone 2020 Fund
Underlying Fund Allocation as of December 31, 2009

77

Vantagepoint Milestone 2020 Fund vs. S&P 500 Index and Custom Benchmark:

Growth of $10,000 Invested January 3, 2005*

Vantagepoint Milestone 2020 Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	23.43%
Three Years	-1.09%
Five Years	2.89%
Since Inception	2.89%
Fund Inception Date	January 3, 2005

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S.The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund.Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class.The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

78

Vantagepoint Milestone 2025 Fund

The Vantagepoint Milestone 2025 Fund’s objective is to offer high total return consistent with the Fund’s current asset allocation. As of December 31, 2009, the Fund’s principal investment strategy was to invest in a combination of underlying Vantagepoint Funds using an asset allocation strategy designed for investors expecting to retire in or begin withdrawals around the year 2025.

At year-end, the Fund was invested in eight Vantagepoint Funds at target allocations within the percentage ranges indicated:

FIXED INCOME
Vantagepoint Low Duration Bond Fund	0%-10%
Vantagepoint Core Bond Index Fund (Class I)	10%-20%
EQUITY
Vantagepoint Equity Income Fund	18%-28%
Vantagepoint Growth & Income Fund	8%-18%
Vantagepoint Growth Fund	4%-14%
Vantagepoint Mid/Small Company Index Fund (Class I)	6%-16%
Vantagepoint International Fund	9%-19%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	5%-15%

In 2009 the Fund’s strategy was to periodically decrease its allocation to equity Funds and correspondingly increase its allocation to fixed income Funds and the multi-strategy Fund so that by June 30 of the year 2025, the Fund’s asset allocation would be approximately 30% equity Funds, 60% fixed income Funds, and 10% in a multi-strategy Fund.*

Performance

The Vantagepoint Milestone 2025 Fund gained 25.40% in 2009. The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Target Date 2021-2025 Funds Average, a group of mutual funds with similar investment objectives, gained 28.32%.The Fund’s custom benchmark gained 20.62%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages, corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market, albeit at levels generally lower than those of the equity markets

All the underlying funds of the Milestone 2025 Fund earned positive returns in 2009. The Fund’s five underlying equity funds each produced strong returns near or in excess of 30%. The Fund’s two underlying bond funds returned 5.57% for the Core Bond Index Fund (Class I) and 10.63% for the Low Duration Bond Fund. The Fund’s allocation to the Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

79

The Fund underperformed its market benchmark due to its allocation to non-equity funds, which meaningfully underperformed equities as represented by the Fund’s market benchmark. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s allocation to fixed income funds was also additive, despite mixed results from the underlying funds compared to the fixed income benchmark (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund also underperformed its peer group due to conservative positioning during the year. It had an underweighted exposure to equities relative to its peer group during the strong equity market rally in 2009. In addition, the fixed income exposure in the Fund generally had a higher average credit quality than its peer group during the period when lower credit quality securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Milestone 2025 Fund
Underlying Fund Allocation as of December 31, 2009

80

Vantagepoint Milestone 2025 Fund vs. S&P 500 Index and Custom Benchmark:

Growth of $10,000 Invested January 3, 2005*

Vantagepoint Milestone 2025 Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	25.40%
Three Years	-1.97%
Five Years	2.62%
Since Inception	2.62%
Fund Inception Date	January 3, 2005

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S.The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class.The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

81

Vantagepoint Milestone 2030 Fund

The Vantagepoint Milestone 2030 Fund’s objective is to offer high total return consistent with the Fund’s current asset allocation. As of December 31, 2009, the Fund’s principal investment strategy was to invest in a combination of underlying Vantagepoint Funds using an asset allocation strategy designed for investors expecting to retire in or begin withdrawals around the year 2030.

At year-end the Fund was invested in seven Vantagepoint Funds at target allocations within the percentage ranges indicated:

FIXED INCOME
Vantagepoint Core Bond Index Fund (Class I)	8%-18%
EQUITY
Vantagepoint Equity Income Fund	20%-30%
Vantagepoint Growth & Income Fund	9%-19%
Vantagepoint Growth Fund	5%-15%
Vantagepoint Mid/Small Company Index Fund (Class I)	8%-18%
Vantagepoint International Fund	11%-21%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	4%-14%

In 2009, the Fund’s strategy was to periodically decrease its allocation to equity Funds and correspondingly increase its allocation to fixed income Funds and the multi-strategy Fund so that by June 30 of the year 2030, the Fund’s asset allocation would be approximately 30% equity Funds, 60% fixed income Funds, and 10% in a multi-strategy Fund.*

Performance

The Vantagepoint Milestone 2030 Fund gained 27.33% in 2009.The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Target Date 2026-2030 Funds Average, a group of mutual funds with similar investment objectives, gained 28.87%. The Fund’s custom benchmark gained 22.18%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages, corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009. The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year. The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market, albeit at levels generally lower than those of the equity markets.

All the underlying funds of the Milestone 2030 Fund earned positive returns in 2009.The Fund’s five underlying equity funds each produced strong returns near or in excess of 30%. The Fund’s single underlying bond fund – the Core Bond Index Fund (Class I) – returned 5.57%.The Fund’s allocation to the Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

82

The Fund outperformed its equity market benchmark due to the strong relative performance of the Fund’s underlying equity funds, which more than offset the relative drag resulting from the Fund’s investments in non-equity funds that produced more muted results. The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark.The Fund’s allocation to the Core Bond Index Fund modestly detracted from performance as it underperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group average due to conservative positioning during the year. It had an underweighted exposure to equities relative to its peer group during the strong equity market rally in 2009. In addition, the fixed income exposure in the Fund generally had a higher average credit quality than its peer group during the period when lower credit quality securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Milestone 2030 Fund
Underlying Fund Allocation as of December 31, 2009

83

Vantagepoint Milestone 2030 Fund vs. S&P 500 Index and Custom Benchmark:

Growth of $10,000 Invested January 3, 2005*

Vantagepoint Milestone 2030 Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	27.33%
Three Years	-2.74%
Five Years	2.38%
Since Inception	2.38%
Fund Inception Date	January 3, 2005

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S.The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class.The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

84

Vantagepoint Milestone 2035 Fund

The Vantagepoint Milestone 2035 Fund’s objective is to offer high total return consistent with the Fund’s current asset allocation. As of December 31, 2009, the Fund’s principal investment strategy was to invest in a combination of underlying Vantagepoint Funds using an asset allocation strategy designed for investors expecting to retire in or begin withdrawals around the year 2035.

At year-end the Fund was invested in seven Vantagepoint Funds at target allocations within the percentage ranges indicated:

FIXED INCOME
Vantagepoint Core Bond Index Fund (Class I)	6%-16%
EQUITY
Vantagepoint Equity Income Fund	20%-30%
Vantagepoint Growth & Income Fund	9%-19%
Vantagepoint Growth Fund	6%-16%
Vantagepoint Mid/Small Company Index Fund (Class I)	11%-21%
Vantagepoint International Fund	12%-22%
MULTI - STRATEGY
Vantagepoint Diversified Assets Fund	0%-10%

In 2009, the Fund’s strategy was to periodically decrease its allocation to equity Funds and correspondingly increase its allocation to fixed income Funds and the multi-strategy Fund so that by June 30 of the year 2035, the Fund’s asset allocation would be approximately 30% equity Funds, 60% fixed income Funds, and 10% in a multi-strategy Fund.*

Performance

The Vantagepoint Milestone 2035 Fund gained 29.22% in 2009.The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Target Date 2031-2035 Funds Average, a group of mutual funds with similar investment objectives, gained 30.06%.The Fund’s custom benchmark gained 23.49%. The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages, corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009.The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year.The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market, albeit at levels generally lower than those of the equity markets.

All the underlying funds of the Milestone 2035 Fund earned positive returns in 2009.The Fund’s five underlying equity funds each produced strong returns near or in excess of 30%. The Fund’s single underlying bond fund – the Core Bond Index Fund (Class I) – returned 5.57%. The Fund’s allocation to the Diversified Assets Fund was also additive to absolute performance, gaining 6.64%. Please refer to each underlying fund’s commentary within this report for more information.

85

The Fund outperformed its equity market benchmark due to the strong relative performance of the Fund’s underlying equity funds, which more than offset the relative drag resulting from the Fund’s investments in non-equity funds that produced more muted results.The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s underlying equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark.The Fund’s allocation to the Core Bond Index Fund modestly detracted from performance as it underperformed the fixed income index (the Barclays Capital U.S. Intermediate Aggregate Bond Index) used in calculating the custom benchmark.

The Fund underperformed its peer group average due to conservative positioning during the year. It had an underweighted exposure to equities relative to its peer group during the strong equity market rally in 2009. In addition, the fixed income exposure in the Fund generally had a higher average credit quality than its peer group during the period when lower credit quality securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund target and allocations and ranges. Please see the prospectus dated January 4, 2010 for additional details.

Vantagepoint Milestone 2035 Fund
Underlying Fund Allocation as of December 31, 2009

86

Vantagepoint Milestone 2035 Fund vs. S&P 500 Index and Custom Benchmark:

Growth of $10,000 Invested January 3, 2005*

Vantagepoint Milestone 2035 Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	29.22%
Three Years	-3.38%
Five Years	2.14%
Since Inception	2.14%
Fund Inception Date	January 3, 2005

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The S&P 500 Index is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S.The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund.Those asset class benchmarks are the Barclays Capital U.S. Intermediate Aggregate Bond Index for the fixed income asset class and the S&P 500 Index for the equity asset class.The Barclays Capital U.S. Intermediate Aggregate Bond Index is an unmanaged index comprised of U.S. Government, mortgage, corporate and asset-backed securities with maturities of one to 10 years. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

87

Vantagepoint Milestone 2040 Fund

The Vantagepoint Milestone 2040 Fund’s objective is to offer high total return consistent with the Fund’s current asset allocation. As of December 31, 2009, the Fund’s principal investment strategy was to invest in a combination of underlying Vantagepoint Funds using an asset allocation strategy designed for investors expecting to retire in or begin withdrawals around the year 2040.

At year-end the Fund was invested in six Vantagepoint Funds at target allocations within the percentage ranges indicated:

FIXED INCOME
Vantagepoint Core Bond Index Fund (Class I)	5%-15%
EQUITY
Vantagepoint Equity Income Fund	21%-31%
Vantagepoint Growth & Income Fund	10%-20%
Vantagepoint Growth Fund	7%-17%
Vantagepoint Mid/Small Company Index Fund (Class I)	14%-24%
Vantagepoint International Fund	13%-23%

In 2009, the Fund followed a strategy that as time elapses, the Fund’s strategy was to periodically decrease its allocation to equity Funds and correspondingly increase its allocation to fixed income Funds and the multi-strategy Fund so that by June 30 of the year 2040, the Fund’s asset allocation would be approximately 30% equity Funds, 60% fixed income Funds, and 10% in a multi-strategy Fund.*

Performance

The Vantagepoint Milestone 2040 Fund gained 30.70% in 2009.The Fund’s market benchmark, the S&P 500 Index, gained 26.46%, while the Fund’s peer group benchmark, the Morningstar Target Date 2036-2040 Funds Average, a group of mutual funds with similar investment objectives, gained 30.90%. The Fund’s custom benchmark gained 27.47%.The Fund’s custom benchmark is composed of market indexes that reflect the general performance of the asset classes in which the Fund invests, in weighted percentages, corresponding to the historical target allocation to those asset classes for the Fund.

Commentary

Equity markets experienced significant lows in March before reversing and ultimately producing positive returns for investors who remained in the market for 2009. A number of variables drove losses early in the year, notably the continuation of the global recession that began in 2008 resulting from market dislocations, poor housing market conditions and a marked increase in unemployment. Government programs around the world provided an economic boost and helped lower previously high market volatility as the year progressed. As economic and market conditions began to stabilize, and in some cases improve, equity markets rallied. Non-U.S. equity markets followed a similar path, and generally outperformed U.S. markets in 2009. Fixed income markets were likewise marked by two distinct phases in 2009.The early part of the year saw a continuation of the financial crisis marked by broad risk aversion on the part of investors, leading to high demand for U.S. Treasury securities and an increasing difference between yields of higher quality versus lower quality bonds. This trend reversed in mid-March, when U.S. Treasury security yields began to rise (and prices began to decline since prices and yields move in opposite directions), and yield differences between higher quality and lower quality bonds generally began to decline through the remainder of the year.The overall effect was a negative return for intermediate and longer-dated U.S. Treasury securities in 2009 and positive returns for most other sectors of the bond market, albeit at levels generally lower than those of the equity markets.

All the underlying funds of the Milestone 2040 Fund earned positive returns in 2009.The Fund’s five underlying equity funds each produced strong returns near or in excess of 30%. The Fund’s single underlying bond fund – the Core Bond Index Fund (Class I) – returned 5.57%. Please refer to each underlying fund’s commentary within this report for more information.

The Fund outperformed its equity market benchmark due to the strong relative performance of the Fund’s underlying equity funds, which more than offset the relative drag resulting from the Fund’s investments in non-equity funds that produced more muted results.The Fund outperformed its custom benchmark primarily due to favorable performance of the Fund’s

88

underlying U.S. equity funds compared to the equity index (the S&P 500 Index) used in calculating the custom benchmark. The Fund’s allocation to the International Fund modestly detracted from performance as it underperformed the non-U.S. equity index (the MSCI EAFE (Net) Index) used in calculating the custom benchmark.

The Fund slightly underperformed its peer group due to its conservative fixed income component. The fixed income exposure in the Fund generally had a higher average credit quality than its peer group during the period when lower credit quality securities outperformed those of high credit quality in 2009.

*Effective January 4, 2010, the Fund changed its principal investment strategies including changes to the asset class allocations and underlying fund allocations and ranges. Please see the prospectus dated January 4, 2010 for additional information.

Vantagepoint Milestone 2040 Fund
Underlying Fund Allocation as of December 31, 2009

89

Vantagepoint Milestone 2040 Fund vs. S&P 500 Index and Custom Benchmark:

Growth of $10,000 Invested January 3, 2005*

Vantagepoint Milestone 2040 Fund

Average Annual Total Return for the periods ended December 31, 2009*
One Year	30.70%
Three Years	-3.63%
Five Years	2.01%
Since Inception	2.01%
Fund Inception Date	January 3, 2005

*Past performance does not guarantee future results. Investment returns and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns assume reinvested dividends and do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Please consult the current prospectus carefully before investing any money. The Vantagepoint Funds are distributed by ICMA-RC Services, LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, and member FINRA/ SIPC. 800-669-7400.

The S&P 500 is an index consisting of 500 companies representing larger capitalization stocks traded in the U.S.The custom benchmark is composed of market indexes that reflect the general performance of the primary asset classes in which the Fund invests, in weighted percentages that correspond to the historical target allocations to those asset classes for the Fund. Those asset class benchmarks are the S&P 500 Index and the MSCI EAFE (Net) Index.The MSCI EAFE (Net) Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada, and approximates the minimum possible dividend reinvestment after deduction of withholding tax according to MSCI Barra’s methodology. Should the target allocations for the Fund between those asset classes change, the percentage allocations to the corresponding indexes will also change when calculating the custom benchmark. A fund’s portfolio may differ significantly from the securities held in the indexes. An index is not available for direct investment, is unmanaged, and does not reflect the costs of portfolio management or trading.

90

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors
of The Vantagepoint Funds:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments and the related statements of operations and changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Money Market Fund, Low Duration Bond Fund, Inflation Protected Securities Fund, Asset Allocation Fund, Equity Income Fund, Growth & Income Fund, Growth Fund, Select Value Fund, Aggressive Opportunities Fund, Discovery Fund, International Fund, Diversified Assets Fund, Core Bond Index Fund, 500 Stock Index Fund, Broad Market Index Fund, Mid/Small Company Index Fund, Overseas Equity Index Fund, Milestone Retirement Income Fund, Milestone 2010 Fund, Milestone 2015 Fund, Milestone 2020 Fund, Milestone 2025 Fund, Milestone 2030 Fund, Milestone 2035 Fund, Milestone 2040 Fund, Model Portfolio Savings Oriented Fund, Model Portfolio Conservative Growth Fund, Model Portfolio Traditional Growth Fund, Model Portfolio Long-Term Growth Fund, and Model Portfolio All-Equity Growth Fund (hereafter referred to as the “Funds”) at December 31, 2009, and the results of each of their operations for the year then ended and changes in each of their net assets for each of the fiscal periods presented, and the financial highlights for each of the fiscal periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2009 by correspondence with the custodian and brokers, and confirmation of the underlying funds by correspondence with the transfer agent, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Baltimore, Maryland
March 1, 2010

91

VANTAGEPOINT FUNDS

Statements of Assets & Liabilities
December 31, 2009

	Money Market		Low Duration Bond(1)			Inflation Protected Securities(2)			Asset Allocation			Equity Income
ASSETS:
Investment in securities, at value†	$	452,107,065	$	558,689,023		$	389,459,181		$	486,012,314		$	1,700,054,622
Cash		—		—			—			182,617			77,558
Cash denominated in foreign currencies		—		—			980,375			—			—
Receivables:
Dividends		70,479		16,272			4,181			380,941			2,150,665
Interest		—		3,361,091			2,842,985			1,466,337			4,192
Security lending income		—		4,495			4,139			5,946			9,559
Investments sold		—		—			716,818			4,264,550			837,044
Fund shares sold		2,274,198		622,356			1,552,522			295,012			1,072,605
Due from investment adviser(a)		127,246		—			—			—			—
Variation margin on futures contracts		—		20,062			—			—			—
Due from broker—swap agreements collateral		—		—			70,000			—			—
Unrealized appreciation on swap agreements		—		—			112,296			—			—
Unrealized appreciation on forward foreign currency exchange contracts		—		244,664			79,451			—			—
Total Assets		454,578,988		562,957,963			395,821,948			492,607,717			1,704,206,245
LIABILITIES:
Payables:
Investments purchased		—		—			372,809			4,255,728			745,311
Distributions		—		51,317			1,068,554			244,912			—
Fund shares redeemed		—		9,107			—			114,498			99,749
Variation margin on futures contracts		—		—			8,167			520,290			—
Collateral for securities loaned		—		44,728,953			54,283,620			50,270,860			184,896,427
Options written, at value (Premium $0, $0, $260,700, $0 and $0, respectively)		—		—			353,518			—			—
Due to custodian		—		5,422			6,418			—			—
Due to broker—futures contracts collateral		—		—			570,000			—			—
Unrealized depreciation on forward foreign currency exchange contracts		—		—			16,720			—			—
Accrued Expenses:
Advisory fees		38,998		43,494			28,987			37,218			127,211
Subadviser fees		—		197,925			133,004			307,851			1,471,130
Fund services fees		136,496		152,231			101,457			130,265			445,247
Administration fees		3,728		4,475			4,475			4,475			4,475
Directors’ fees and expenses		2,190		2,110			1,496			2,198			5,673
Other accrued expenses		123,505		104,083			83,116			129,057			212,391
Total Liabilities		304,917		45,299,117			57,032,341			56,017,352			188,007,614
NET ASSETS	$	454,274,071	$	517,658,846		$	338,789,607		$	436,590,365		$	1,516,198,631
NET ASSETS REPRESENTED BY:
Paid-in capital	$	454,274,071	$	519,656,438		$	330,715,880		$	513,485,400		$	1,576,569,460
Undistributed net investment income (loss)		—		(109,831	)		115,873			1,498,946			17,872,857
Accumulated net realized loss on investments, futures contracts, foreign currency contracts, written options and swap agreements		—		(11,357,427	)		(3,112,910	)		(75,667,937	)		(145,172,126	)
Net unrealized appreciation (depreciation) on investments, futures contracts, foreign currency transactions, written options and swap agreements		—		9,469,666			11,070,764			(2,726,044	)		66,928,440
NET ASSETS	$	454,274,071	$	517,658,846		$	338,789,607		$	436,590,365		$	1,516,198,631
CAPITAL SHARES:
Net Assets	$	454,274,071	$	517,658,846		$	338,789,607		$	436,590,365		$	1,516,198,631
Shares Outstanding		454,274,071		52,001,799			31,613,592			71,495,060			196,877,938
Net Asset Value offering and redemption price per share (net assets divided by shares outstanding)	$	1.00	$	9.95		$	10.72		$	6.11		$	7.70
Cost of investments	$	452,107,065	$	549,591,382		$	378,446,919		$	487,444,758		$	1,633,124,860
Cost of cash denominated in foreign currencies	$	—	$	—		$	975,363		$	—		$	—
†Includes securities on loan with values of (Note 7):	$	—	$	44,250,183		$	53,107,347		$	48,764,472		$	178,527,606

 

(1) Formerly Short-Term Bond Fund.

(2) Formerly US Government Securities Fund.

(a) Voluntary fee waiver (Note 4).

See Notes to Financial Statements.

92

VANTAGEPOINT FUNDS

Statements of Assets & Liabilities
December 31, 2009

	Growth & Income			Growth			Select Value			Aggressive Opportunities
ASSETS:
Investment in securities, at value†	$	1,104,090,605		$	2,013,069,701		$	331,571,072		$	1,251,813,519
Cash		23			287,580			1,642			5,915
Cash denominated in foreign currencies		—			—			—			16
Receivables:
Dividends		1,186,074			1,936,848			440,320			454,913
Security lending income		3,824			39,313			3,170			23,485
Investments sold		3,484,767			5,509,807			9,572,973			1,866,179
Fund shares sold		953,168			622,806			96,877			173,049
Recoverable foreign taxes		10,189			31			—			—
Total Assets		1,109,728,650			2,021,466,086			341,686,054			1,254,337,076
LIABILITIES:
Payables:
Investments purchased		2,086,447			8,532,371			902,703			1,756,361
Distributions		204,707			—			26,562			—
Fund shares redeemed		181,586			286,954			—			785
Collateral for securities loaned		82,251,772			195,541,773			44,370,471			240,717,338
Accrued Expenses:
Advisory fees		86,559			152,569			24,766			84,176
Subadviser fees		804,754			1,528,964			385,843			1,192,766
Fund services fees		302,960			534,000			86,684			294,621
Administration fees		4,475			4,466			4,475			4,475
Directors’ fees and expenses		3,862			9,272			1,098			3,629
Other accrued expenses		165,928			343,217			83,263			184,659
Total Liabilities		86,093,050			206,933,586			45,885,865			244,238,810
NET ASSETS	$	1,023,635,600		$	1,814,532,500		$	295,800,189		$	1,010,098,266
NET ASSETS REPRESENTED BY:
Paid-in capital	$	1,070,792,040		$	2,366,442,567		$	340,064,401		$	1,010,941,066
Undistributed net investment income		3,224,383			497,760			114,887			2
Accumulated net realized loss on investments and foreign currency contracts		(213,364,388	)		(793,901,722	)		(80,928,334	)		(159,330,743	)
Net unrealized appreciation on investments and foreign currency transactions		162,983,565			241,493,895			36,549,235			158,487,941
NET ASSETS	$	1,023,635,600		$	1,814,532,500		$	295,800,189		$	1,010,098,266
CAPITAL SHARES:
Net Assets	$	1,023,635,600		$	1,814,532,500		$	295,800,189		$	1,010,098,266
Shares Outstanding		120,577,865			235,792,576			35,857,795			106,135,753
Net Asset Value offering and redemption price per share (net assets divided by shares outstanding)	$	8.49		$	7.70		$	8.25		$	9.52
Cost of investments	$	941,106,884		$	1,771,575,806		$	295,021,837		$	1,093,325,578
Cost of cash denominated in foreign currencies	$	—		$	—		$	—		$	16
†Includes securities on loan with values of (Note 7):	$	79,698,585		$	189,988,524		$	42,584,724		$	232,614,390

 

See Notes to Financial Statements.

93

VANTAGEPOINT FUNDS

Statements of Assets & Liabilities
December 31, 2009

	Discovery			International			Diversified Assets(3)
ASSETS:
Investment in securities, at value†	$	204,488,509		$	1,083,277,793		$	451,520,330
Cash		27,675			364,618			—
Cash denominated in foreign currencies		30			4,325,814			2,164
Receivables:
Dividends		168,967			1,344,869			14,033
Interest		532,239			—			2,179,410
Security lending income		6,051			6,288			—
Investments sold		3,982,127			1,295,110			—
Fund shares sold		262,803			906,193			938,431
Recoverable foreign taxes		—			618,646			—
Due from broker—forward foreign currency exchange contracts collateral		—			—			750,000
Due from broker—futures contracts collateral		—			—			350,000
Unrealized appreciation on forward foreign currency exchange contracts		22,262			—			1,064,738
Total Assets		209,490,663			1,092,139,331			456,819,106
LIABILITIES:
Payables:
Investments purchased		165,565			5,874,326			—
Distributions		235,015			182,846			—
Fund shares redeemed		—			9,029			—
Variation margin on futures contracts		944,508			—			513,385
Collateral for securities loaned		29,670,214			68,440,543			—
Due to custodian		—			—			178,253
Unrealized depreciation on forward foreign currency exchange contracts		—			—			2,109,370
Accrued Expenses:
Advisory fees		14,790			85,340			38,087
Subadviser fees		172,504			1,271,884			538,794
Fund services fees		51,765			298,696			133,306
Administration fees		4,475			4,475			4,475
Directors’ fees and expenses		628			3,883			1,828
Other accrued expenses		56,935			341,661			105,793
Total Liabilities		31,316,399			76,512,683			3,623,291
NET ASSETS	$	178,174,264		$	1,015,626,648		$	453,195,815
NET ASSETS REPRESENTED BY:
Paid-in capital	$	213,249,098		$	1,139,314,894		$	456,273,500
Undistributed net investment income		61,983			12,898,017			3,795,786
Accumulated net realized loss on investments, futures contracts and foreign currency contracts		(55,858,957	)		(204,084,072	)		(7,391,564	)
Net unrealized appreciation on investments, futures contracts and foreign currency transactions		20,722,140			67,497,809			518,093
NET ASSETS	$	178,174,264		$	1,015,626,648		$	453,195,815
CAPITAL SHARES:
Net Assets	$	178,174,264		$	1,015,626,648		$	453,195,815
Shares Outstanding		23,644,974			114,738,152			46,028,696
Net Asset Value offering and redemption price per share (net assets divided by shares outstanding)	$	7.54		$	8.85		$	9.85
Cost of investments	$	186,722,811		$	1,015,758,642		$	449,206,730
Cost of cash denominated in foreign currencies	$	30		$	4,361,167		$	2,257
†Includes securities on loan with values of (Note 7):	$	28,774,455		$	65,471,243		$	—

 

(3) Renamed Diversifying Strategies Fund effective January 4, 2010.

See Notes to Financial Statements.

94

VANTAGEPOINT FUNDS

Statements of Assets & Liabilities
December 31, 2009

	Core Bond Index			500 Stock Index			Broad Market Index			Mid/Small Company Index		Overseas Equity Index
ASSETS:
Investment in securities, at value†	$	1,363,139,686		$	353,638,469		$	532,656,328		$	291,017,540	$	193,433,054
Cash		1,304			3,534			3,829			2,647		—
Cash denominated in foreign currencies		—			—			—			—		199,569
Receivables:
Dividends		6,201			449,614			623,341			257,878		186,352
Interest		8,850,966			—			—			—		—
Security lending income		16,015			4,540			12,698			19,010		1,197
Investments sold		27,576,411			—			—			334,584		—
Fund shares sold		7,867,832			333,945			222,526			348,775		6,117
Recoverable foreign taxes		—			—			—			—		204,341
Variation margin on futures contracts		—			—			—			—		1,524
Unrealized appreciation on forward foreign currency exchange contracts		—			—			—			—		139,056
Total Assets		1,407,458,415			354,430,102			533,518,722			291,980,434		194,171,210
LIABILITIES:
Payables:
Investments purchased		91,964,578			59,073			—			—		3,164
Distributions		4,772,853			—			—			42,844		—
Fund shares redeemed		81,683			—			74,622			—		103,763
Variation margin on futures contracts		—			66,019			53,645			66,770		—
Collateral for securities loaned		214,395,238			30,623,579			55,146,175			60,108,194		12,542,046
Due to custodian		—			—			—			—		104,424
Unrealized depreciation on forward foreign currency exchange contracts		—			—			—			—		293,395
Accrued Expenses:
Advisory fees		46,533			14,241			20,315			9,754		7,733
Subadviser fees		58,131			17,666			28,385			22,620		32,397
Fund services fees		237,884			42,813			60,771			41,853		24,369
Administration fees		4,476			4,475			4,475			4,475		4,475
Directors’ fees and expenses		4,654			1,353			2,033			790		680
Other accrued expenses		195,164			85,353			101,373			64,840		116,205
Total Liabilities		311,761,194			30,914,572			55,491,794			60,362,140		13,232,651
NET ASSETS	$	1,095,697,221		$	323,515,530		$	478,026,928		$	231,618,294	$	180,938,559
NET ASSETS REPRESENTED BY:
Paid-in capital	$	1,111,292,349		$	266,385,618		$	398,661,824		$	224,678,594	$	198,885,034
Undistributed net investment income (loss)		—			188,998			5,657,890			369,749		(246,977	)
Accumulated net realized gain (loss) on investments, futures contracts and foreign currency contracts		(31,601,594	)		(23,450,556	)		(15,285,800	)		1,359,052		(3,468,743	)
Net unrealized appreciation (depreciation) on investments, futures contracts and foreign currency transactions		16,006,466			80,391,470			88,993,014			5,210,899		(14,230,755	)
NET ASSETS	$	1,095,697,221		$	323,515,530		$	478,026,928		$	231,618,294	$	180,938,559
CAPITAL SHARES:
Net Assets—Class I	$	857,504,357		$	85,772,095		$	119,777,184		$	134,165,302	$	52,936,635
Shares Outstanding—Class I		86,714,101			9,739,100			12,649,308			10,864,380		5,138,077
Net Asset Value—Class I, offering and redemption price per share (net assets divided by shares outstanding)	$	9.89		$	8.81		$	9.47		$	12.35	$	10.30
Net Assets—Class II	$	238,192,864		$	237,743,435		$	358,249,744		$	97,452,992	$	128,001,924
Shares Outstanding—Class II		23,957,730			28,576,681			40,196,221			8,310,757		13,210,717
Net Asset Value—Class II, offering and redemption price per share (net assets divided by shares outstanding)	$	9.94		$	8.32		$	8.91		$	11.73	$	9.69
Cost of investments	$	1,347,133,220		$	273,282,557		$	443,747,756		$	285,949,716	$	207,552,646
Cost of cash denominated in foreign currencies	$	—		$	—		$	—		$	—	$	199,284
†Includes securities on loan with values of (Note 7):	$	209,702,889		$	29,533,161		$	53,096,305		$	57,810,316	$	11,951,816

 

See Notes to Financial Statements.

95

VANTAGEPOINT FUNDS

Statements of Assets & Liabilities
December 31, 2009

	Model Portfolio Funds
	Savings Oriented			Conservative Growth			Traditional Growth			Long-Term Growth			All-Equity Growth
ASSETS:
Investment in securities of affiliated Mutual Funds, at value(a)	$	307,363,741		$	528,279,679		$	1,353,239,051		$	1,621,309,770		$	591,617,680
Receivables:
Dividends		277,969			598,546			1,313,327			1,224,398			117,828
Investments sold		25,878			44,370			103,952			121,708			48,766
Fund shares sold		6,476,141			10,473,933			21,518,183			26,100,085			9,632,472
Total Assets		314,143,729			539,396,528			1,376,174,513			1,648,755,961			601,416,746
LIABILITIES:
Payables:
Investments purchased		486,845			970,342			1,898,029			2,709,960			597,865
Distributions		6,268,261			10,102,929			20,934,222			24,614,523			9,152,373
Fund shares redeemed		—			—			—			—			62
Accrued Expenses:
Advisory fees		26,722			45,814			107,342			125,690			50,373
Administration fees		3,727			3,727			3,727			3,727			3,727
Directors’ fees and expenses		1,325			2,315			5,536			6,210			2,015
Other accrued expenses		60,302			88,305			176,133			193,509			77,263
Total Liabilities		6,847,182			11,213,432			23,124,989			27,653,619			9,883,678
NET ASSETS	$	307,296,547		$	528,183,096		$	1,353,049,524		$	1,621,102,342		$	591,533,068
NET ASSETS REPRESENTED BY:
Paid-in capital	$	316,694,145		$	554,846,530		$	1,456,909,135		$	1,738,534,965		$	686,577,368
Undistributed net investment income		647,536			1,405,028			6,786,279			7,764,277			1,416,003
Accumulated net realized loss on investments		(5,474,790	)		(16,249,149	)		(69,429,168	)		(42,216,965	)		(7,360,807	)
Net unrealized depreciation on investments		(4,570,344	)		(11,819,313	)		(41,216,722	)		(82,979,935	)		(89,099,496	)
NET ASSETS	$	307,296,547		$	528,183,096		$	1,353,049,524		$	1,621,102,342		$	591,533,068
CAPITAL SHARES:
Net Assets	$	307,296,547		$	528,183,096		$	1,353,049,524		$	1,621,102,342		$	591,533,068
Shares Outstanding		13,236,041			23,863,383			66,719,537			84,001,329			34,029,617
Net Asset Value offering and redemption price per share (net assets divided by shares outstanding)	$	23.22		$	22.13		$	20.28		$	19.30		$	17.38
Cost of investments	$	311,934,085		$	540,098,992		$	1,394,455,773		$	1,704,289,705		$	680,717,176

 

(a) Investment in other Vantagepoint Funds (Note 1).

See Notes to Financial Statements.

96

VANTAGEPOINT FUNDS

Statements of Assets & Liabilities
December 31, 2009

	Milestone Funds
	Milestone Retirement Income			Milestone 2010			Milestone 2015			Milestone 2020			Milestone 2025
ASSETS:
Investment in securities of affiliated Mutual Funds, at value(a)	$	76,720,060		$	90,829,312		$	186,036,899		$	186,194,358		$	146,438,758
Receivables:
Dividends		63,897			73,964			145,570			166,839			111,346
Investments sold		6,275			7,638			15,517			15,523			12,200
Fund shares sold		1,563,165			2,348,331			3,718,983			4,943,573			3,796,785
Total Assets		78,353,397			93,259,245			189,916,969			191,320,293			150,359,089
LIABILITIES:
Payables:
Investments purchased		364,050			804,648			646,654			603,200			446,162
Distributions		1,263,012			1,617,648			3,217,898			4,507,213			3,461,969
Accrued Expenses:
Advisory fees		6,484			7,885			16,027			16,033			12,602
Administration fees		3,727			3,727			3,728			3,727			3,728
Directors’ fees and expenses		231			330			618			562			409
Other accrued expenses		32,703			35,458			43,016			41,498			37,470
Total Liabilities		1,670,207			2,469,696			3,927,941			5,172,233			3,962,340
NET ASSETS	$	76,683,190		$	90,789,549		$	185,989,028		$	186,148,060		$	146,396,749
NET ASSETS REPRESENTED BY:
Paid-in capital	$	79,397,168		$	96,760,809		$	200,409,986		$	199,685,210		$	157,067,833
Undistributed net investment income		195,858			424,795			1,031,149			91,628			13,575
Accumulated net realized loss on investments		(4,680,937	)		(7,637,430	)		(6,038,823	)		(3,611,600	)		(2,029,490	)
Net unrealized appreciation (depreciation) on investments		1,771,101			1,241,375			(9,413,284	)		(10,017,178	)		(8,655,169	)
NET ASSETS	$	76,683,190		$	90,789,549		$	185,989,028		$	186,148,060		$	146,396,749
CAPITAL SHARES:
Net Assets	$	76,683,190		$	90,789,549		$	185,989,028		$	186,148,060		$	146,396,749
Shares Outstanding		7,813,822			9,495,949			19,525,716			19,736,815			15,771,223
Net Asset Value offering and redemption price per share (net assets divided by shares outstanding)	$	9.81		$	9.56		$	9.53		$	9.43		$	9.28
Cost of investments	$	74,948,959		$	89,587,937		$	195,450,183		$	196,211,536		$	155,093,927

 

(a) Investment in other Vantagepoint Funds (Note 1).

See Notes to Financial Statements.

97

VANTAGEPOINT FUNDS

Statements of Assets & Liabilities
December 31, 2009

	Milestone Funds
	Milestone 2030			Milestone 2035			Milestone 2040
ASSETS:
Investment in securities of affiliated Mutual Funds, at value(a)	$	121,258,020		$	76,910,470		$	91,383,534
Receivables:
Dividends		77,788			44,438			47,879
Investments sold		10,053			6,331			7,557
Fund shares sold		3,426,085			2,000,321			2,427,616
Total Assets		124,771,946			78,961,560			93,866,586
LIABILITIES:
Payables:
Investments purchased		631,411			241,658			422,060
Distributions		2,872,462			1,783,226			2,053,435
Fund shares redeemed		—			19,875			—
Accrued Expenses:
Advisory fees		10,385			6,542			7,809
Administration fees		3,728			3,727			3,727
Directors’ fees and expenses		328			189			192
Other accrued expenses		35,036			31,377			31,591
Total Liabilities		3,553,350			2,086,594			2,518,814
NET ASSETS	$	121,218,596		$	76,874,966		$	91,347,772
NET ASSETS REPRESENTED BY:
Paid-in capital	$	128,996,359		$	81,375,016		$	93,706,597
Undistributed net investment income		13,726			9,402			10,815
Accumulated net realized loss on investments		(1,567,538	)		(913,441	)		(1,230,683	)
Net unrealized depreciation on investments		(6,223,951	)		(3,596,011	)		(1,138,957	)
NET ASSETS	$	121,218,596		$	76,874,966		$	91,347,772
CAPITAL SHARES:
Net Assets	$	121,218,596		$	76,874,966		$	91,347,772
Shares Outstanding		13,092,381			8,446,905			10,076,133
Net Asset Value offering and redemption price per share (net assets divided by shares outstanding)	$	9.26		$	9.10		$	9.07
Cost of investments	$	127,481,971		$	80,506,481		$	92,522,491

 

(a) Investment in other Vantagepoint Funds (Note 1).

See Notes to Financial Statements.

98

VANTAGEPOINT FUNDS

Statements of Operations
For the Year Ended December 31, 2009

	Money Market			Low Duration Bond(1)			Inflation Protected Securities(2)			Asset Allocation			Equity Income
INVESTMENT INCOME:
Dividends	$	2,593,496		$	183,964		$	106,885		$	7,881,396		$	28,479,096
Interest		—			17,083,675			5,389,395			1,585,528			94,340
Security lending income		—			105,928			137,915			342,157			892,720
Foreign taxes withheld on dividends		—			(23,886	)		—			—			(171,176	)
Total investment income		2,593,496			17,349,681			5,634,195			9,809,081			29,294,980
EXPENSES:
Advisory (Note 4)		468,367			441,405			312,145			403,451			1,234,188
Subadviser		—			676,501			474,883			1,156,915			4,867,130
Fund services		1,639,312			1,544,943			1,092,525			1,412,101			4,319,725
Custodian		—			28,182			16,154			14,626			24,161
Administration		14,958			17,951			17,951			17,951			17,951
Fund accounting		12,465			22,325			22,325			22,325			39,956
Legal		94,129			80,643			59,222			74,870			200,777
Audit		17,694			23,552			23,516			33,912			25,895
Directors		7,730			7,281			4,984			8,067			20,367
State license fees and memberships		63,849			25,932			32,154			63,555			33,412
Other expenses		68,687			44,904			40,230			45,503			130,767
Total expenses		2,387,191			2,913,619			2,096,089			3,253,276			10,914,329
Less waivers (Note 4)		(543,029	)		—			—			—			(55,105	)
Net Expenses		1,844,162			2,913,619			2,096,089			3,253,276			10,859,224
NET INVESTMENT INCOME		749,334			14,436,062			3,538,106			6,555,805			18,435,756
NET REALIZED AND UNREALIZED GAIN (Note 2):
Net realized gain (loss) on:
Investments		—			(3,870,673	)		1,579,187			(13,841,128	)		(40,464,575	)
Forward contracts and foreign currency transactions		—			(1,973,458	)		(7,021	)		—			1,885
Futures contracts		—			(190,784	)		254,841			(1,933,951	)		—
Options written		—			—			619,574			—			—
Swap agreements		—			—			2,081,828			—			—
Net realized gain (loss)		—			(6,034,915	)		4,528,409			(15,775,079	)		(40,462,690	)
Net change in unrealized appreciation (depreciation) on:
Investments		—			34,265,819			21,914,718			75,834,661			414,727,088
Forward contracts and foreign currency transactions		—			986,153			118,343			—			(462	)
Futures contracts		—			12,234			19,538			(1,975,189	)		—
Options written		—			—			193,282			—			—
Swap agreements		—			—			(1,492,715	)		—			—
Net change in unrealized appreciation		—			35,264,206			20,753,166			73,859,472			414,726,626
NET GAIN		—			29,229,291			25,281,575			58,084,393			374,263,936
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	749,334		$	43,665,353		$	28,819,681		$	64,640,198		$	392,699,692

 

(1) Formerly Short-Term Bond Fund.

(2)   Formerly US Government Securities Fund.

See Notes to Financial Statements.

99

VANTAGEPOINT FUNDS

Statements of Operations
For the Year Ended December 31, 2009

	Growth & Income			Growth			Select Value			Aggressive Opportunities
INVESTMENT INCOME:
Dividends	$	18,362,626		$	22,314,834		$	5,814,612		$	6,695,908
Interest		22			—			—			—
Security lending income		296,564			794,803			106,138			1,060,863
Foreign taxes withheld on dividends		(9,934	)		(16,052	)		(5,806	)		(64,207	)
Total investment income		18,649,278			23,093,585			5,914,944			7,692,564
EXPENSES:
Advisory (Note 4)		844,448			1,541,808			240,822			796,653
Subadviser		2,743,278			5,636,935			1,241,248			3,948,077
Fund services		2,955,616			5,396,413			842,891			2,788,330
Custodian		22,195			32,209			15,310			24,573
Administration		17,951			17,951			17,951			17,951
Fund accounting		28,535			56,661			24,950			31,019
Legal		139,388			267,943			40,203			126,869
Audit		24,508			38,221			23,463			26,132
Directors		13,698			39,703			3,851			13,125
State license fees and memberships		27,242			32,592			20,534			26,300
Other expenses		92,506			153,024			26,771			76,913
Total expenses		6,909,365			13,213,460			2,497,994			7,875,942
Less waivers (Note 4)		(39,906	)		(298,553	)		—			(41,998	)
Net Expenses		6,869,459			12,914,907			2,497,994			7,833,944
NET INVESTMENT INCOME (LOSS)		11,779,819			10,178,678			3,416,950			(141,380	)
NET REALIZED AND UNREALIZED GAIN (Note 2):
Net realized gain (loss) on:
Investments		(99,521,936	)		(150,368,859	)		(23,794,242	)		(64,063,382	)
Forward contracts and foreign currency transactions		(6,787	)		—			—			1,648
Net realized loss		(99,528,723	)		(150,368,859	)		(23,794,242	)		(64,061,734	)
Net change in unrealized appreciation (depreciation) on:
Investments		344,165,923			570,146,164			100,368,071			399,139,075
Forward contracts and foreign currency transactions		308			—			—			31
Net change in unrealized appreciation		344,166,231			570,146,164			100,368,071			399,139,106
NET GAIN		244,637,508			419,777,305			76,573,829			335,077,372
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	256,417,327		$	429,955,983		$	79,990,779		$	334,935,992

 

See Notes to Financial Statements.

100

VANTAGEPOINT FUNDS

Statements of Operations
For the Year Ended December 31, 2009

	Discovery			International			Diversified Assets(3)
INVESTMENT INCOME:
Dividends	$	1,201,233		$	24,642,212		$	281,255
Interest		2,031,509			12,348			7,450,609
Security lending income		93,679			951,603			—
Foreign taxes withheld on dividends		(9,131	)		(2,438,748	)		(6,343	)
Total investment income		3,317,290			23,167,415			7,725,521
EXPENSES:
Advisory (Note 4)		141,574			841,741			383,749
Subadviser		599,184			4,334,142			1,708,269
Fund services		495,517			2,946,139			1,343,141
Custodian		34,129			354,505			38,278
Administration		17,951			17,951			17,951
Fund accounting		22,881			32,082			29,271
Legal		22,870			139,237			100,786
Audit		23,463			24,699			23,463
Directors		2,211			13,852			6,363
State license fees and memberships		23,502			28,048			2,980
Other expenses		15,440			106,103			36,911
Total expenses		1,398,722			8,838,499			3,691,162
Less waivers (Note 4)		—			—			(52,316	)
Net Expenses		1,398,722			8,838,499			3,638,846
NET INVESTMENT INCOME		1,918,568			14,328,916			4,086,675
NET REALIZED AND UNREALIZED GAIN (Note 2):
Net realized gain (loss) on:
Investments		(11,214,080	)		(90,041,342	)		(855,215	)
Forward contracts and foreign currency transactions		(333,046	)		342,608			2,146,330
Futures contracts		21,997,943			—			8,965,183
Net realized gain (loss)		10,450,817			(89,698,734	)		10,256,298
Net change in unrealized appreciation (depreciation) on:
Investments		40,830,429			309,398,466			11,553,357
Forward contracts and foreign currency transactions		240,963			(150,419	)		(978,364	)
Futures contracts		(3,219,803	)		—			(987,662	)
Swap agreements		—			—			(332,335	)
Net change in unrealized appreciation		37,851,589			309,248,047			9,254,996
NET GAIN		48,302,406			219,549,313			19,511,294
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	50,220,974		$	233,878,229		$	23,597,969

 

(3) Renamed Diversifying Strategies Fund effective January 4, 2010.

See Notes to Financial Statements.

101

VANTAGEPOINT FUNDS

Statements of Operations
For the Year Ended December 31, 2009

	Core Bond Index			500 Stock Index			Broad Market Index			Mid/Small Company Index			Overseas Equity Index
INVESTMENT INCOME:
Dividends	$	105,966		$	7,463,910		$	9,849,453		$	3,292,651		$	4,943,782
Interest		41,995,890			837			3,819			6,516			424
Security lending income		744,735			261,706			409,796			305,203			212,657
Foreign taxes withheld on dividends		(3,485	)		—			(959	)		(2,098	)		(463,403	)
Total investment income		42,843,106			7,726,453			10,262,109			3,602,272			4,693,460
EXPENSES:
Advisory (Note 4)		484,553			146,169			206,263			92,400			72,972
Subadviser		207,141			62,209			96,028			81,957			107,565
Fund services Class I		2,206,740			207,156			303,207			304,508			122,875
Fund services Class II		233,508			223,284			311,454			83,294			104,986
Custodian		96,189			9,106			31,374			21,360			107,891
Administration		17,951			17,951			17,951			17,951			17,951
Fund accounting		29,253			22,325			22,686			26,394			22,325
Legal		176,221			47,907			70,777			28,407			22,960
Audit		23,703			23,488			23,488			23,463			23,463
Directors		15,998			4,852			7,371			2,806			2,529
State license fees and memberships		32,876			55,860			26,375			26,545			4,376
Other expenses		99,926			26,379			42,207			19,484			42,997
Total expenses		3,624,059			846,686			1,159,181			728,569			652,890
NET INVESTMENT INCOME		39,219,047			6,879,767			9,102,928			2,873,703			4,040,570
NET REALIZED AND UNREALIZED GAIN (Note 2):
Net realized gain (loss) on:
Investments		61,557			13,170,718			2,895,806			3,162,460			(940,758	)
Forward contracts and foreign currency transactions		—			—			—			—			473,073
Futures contracts		—			1,492,920			1,394,571			1,625,655			476,433
Net realized gain		61,557			14,663,638			4,290,377			4,788,115			8,748
Net change in unrealized appreciation (depreciation) on:
Investments		14,114,167			53,052,461			93,240,945			53,869,454			34,996,561
Forward contracts and foreign currency transactions		—			—			—			—			(248,236	)
Futures contracts		—			(48,426	)		(109,929	)		16,249			(30,935	)
Net change in unrealized appreciation		14,114,167			53,004,035			93,131,016			53,885,703			34,717,390
NET GAIN		14,175,724			67,667,673			97,421,393			58,673,818			34,726,138
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	53,394,771		$	74,547,440		$	106,524,321		$	61,547,521		$	38,766,708

 

See Notes to Financial Statements.

102

VANTAGEPOINT FUNDS

Statements of Operations
For the Year Ended December 31, 2009

	Model Portfolio Funds
	Savings Oriented			Conservative Growth			Traditional Growth			Long-Term Growth			All-Equity Growth
INVESTMENT INCOME:
Dividend income from affiliated mutual funds(a)	$	6,841,050		$	11,003,682		$	23,096,415		$	23,841,120		$	6,641,298
Total investment income		6,841,050			11,003,682			23,096,415			23,841,120			6,641,298
EXPENSES:
Advisory (Note 4)		271,170			467,983			1,077,528			1,231,649			458,493
Custodian		664			800			4,836			6,029			1,773
Administration		14,958			14,958			14,958			14,958			14,958
Fund accounting		12,465			13,917			33,522			38,577			13,006
Legal		50,074			85,704			202,943			227,258			71,981
Audit		17,812			18,055			18,598			18,494			17,719
Directors		4,560			8,076			19,437			21,829			7,194
State license fees and memberships		22,747			26,125			30,971			26,807			23,443
Other expenses		30,607			51,128			130,418			154,640			50,233
Total expenses		425,057			686,746			1,533,211			1,740,241			658,800
NET INVESTMENT INCOME		6,415,993			10,316,936			21,563,204			22,100,879			5,982,498
NET REALIZED AND UNREALIZED GAIN (Note 2):
Net realized gain (loss) on investments		(3,729,514	)		(4,028,708	)		(8,749,178	)		(7,376,648	)		(5,487,811	)
Net change in unrealized appreciation (depreciation) on investments		35,490,254			73,147,871			237,730,560			327,469,912			145,987,231
NET GAIN		31,760,740			69,119,163			228,981,382			320,093,264			140,499,420
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	38,176,733		$	79,436,099		$	250,544,586		$	342,194,143		$	146,481,918

 

(a) Received from other Vantagepoint Funds (Note 1).

See Notes to Financial Statements.

103

VANTAGEPOINT FUNDS

Statements of Operations
For the Year Ended December 31, 2009

	Milestone Funds
	Milestone Retirement Income			Milestone 2010			Milestone 2015			Milestone 2020			Milestone 2025
INVESTMENT INCOME:
Dividend income from affiliated mutual funds(a)	$	1,399,409		$	1,801,490		$	3,287,423		$	3,341,374		$	2,414,122
Total investment income		1,399,409			1,801,490			3,287,423			3,341,374			2,414,122
EXPENSES:
Advisory (Note 4)		55,100			75,984			146,794			142,783			108,817
Custodian		365			365			365			365			365
Administration		14,958			14,958			14,958			14,957			14,958
Fund accounting		12,465			12,465			12,465			12,465			12,465
Legal		8,667			12,759			23,593			21,907			15,889
Audit		17,719			17,719			17,719			17,719			17,719
Directors		795			1,118			2,109			1,892			1,384
State license fees and memberships		21,021			21,115			23,301			22,672			21,954
Other expenses		5,390			8,751			16,283			16,253			11,864
Total expenses		136,480			165,234			257,587			251,013			205,415
Less reimbursements/waivers (Note 4)		(26,965	)		(17,230	)		(12,138	)		(8,147	)		(12,156	)
Net Expenses		109,515			148,004			245,449			242,866			193,259
NET INVESTMENT INCOME		1,289,894			1,653,486			3,041,974			3,098,508			2,220,863
NET REALIZED AND UNREALIZED GAIN (Note 2):
Net realized gain (loss) on investments		(3,001,541	)		(6,227,767	)		(5,218,726	)		(3,215,932	)		(1,780,024	)
Net change in unrealized appreciation (depreciation) on investments		10,183,438			17,177,761			32,034,154			31,775,045			26,094,056
NET GAIN		7,181,897			10,949,994			26,815,428			28,559,113			24,314,032
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	8,471,791		$	12,603,480		$	29,857,402		$	31,657,621		$	26,534,895

 

(a) Received from other Vantagepoint Funds (Note 1).

See Notes to Financial Statements.

104

VANTAGEPOINT FUNDS

Statements of Operations
For the Year Ended December 31, 2009

	Milestone Funds
	Milestone 2030			Milestone 2035			Milestone 2040
INVESTMENT INCOME:
Dividend income from affiliated mutual funds(a)	$	1,881,033		$	1,171,389		$	1,388,499
Total investment income		1,881,033			1,171,389			1,388,499
EXPENSES:
Advisory (Note 4)		89,726			53,896			60,867
Custodian		365			365			365
Administration		14,958			14,958			14,958
Fund accounting		12,465			12,465			12,465
Legal		13,000			7,463			7,704
Audit		17,719			17,719			17,719
Directors		1,096			629			636
State license fees and memberships		20,314			19,270			19,768
Other expenses		10,110			5,868			6,171
Total expenses		179,753			132,633			140,653
Less reimbursements/waivers (Note 4)		(10,676	)		(12,022	)		(12,030	)
Net Expenses		169,077			120,611			128,623
NET INVESTMENT INCOME		1,711,956			1,050,778			1,259,876
NET REALIZED AND UNREALIZED GAIN (Note 2):
Net realized gain (loss) on investments		(1,338,826	)		(774,330	)		(858,323	)
Net change in unrealized appreciation (depreciation) on investments		23,295,872			15,019,707			17,901,529
NET GAIN		21,957,046			14,245,377			17,043,206
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	23,669,002		$	15,296,155		$	18,303,082

 

(a) Received from other Vantagepoint Funds (Note 1).

See Notes to Financial Statements.

105

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Money Market						Low Duration Bond(1)
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	749,334		$	8,525,978		$	14,436,062		$	18,049,962
Net realized gain (loss)		—			3,355			(6,034,915	)		2,854,920
Net change in unrealized appreciation (depreciation)		—			—			35,264,206			(27,701,753	)
Net increase (decrease) in net assets resulting from operations		749,334			8,529,333			43,665,353			(6,796,871	)
Distributions to shareholders from:
Net investment income		(749,334	)		(8,525,978	)		(13,619,201	)		(19,313,137	)
Net realized gain		—			(3,355	)		—			—
Total distributions		(749,334	)		(8,529,333	)		(13,619,201	)		(19,313,137	)
Capital share transactions:
Proceeds from sale of shares		136,019,180			213,026,415			115,378,152			46,164,681
Reinvestment of distributions		1,236,240			8,042,427			13,619,201			19,313,137
Value of shares redeemed		(141,016,375	)		(69,833,191	)		(36,088,687	)		(151,784,055	)
Net increase (decrease) from capital share transactions		(3,760,955	)		151,235,651			92,908,666			(86,306,237	)
Total increase (decrease) in net assets		(3,760,955	)		151,235,651			122,954,818			(112,416,245	)
NET ASSETS at beginning of year		458,035,026			306,799,375			394,704,028			507,120,273
NET ASSETS at end of year	$	454,274,071		$	458,035,026		$	517,658,846		$	394,704,028
Undistributed net investment loss included in net assets at end of year	$	—		$	—		$	(109,831	)	$	(27,515	)
SHARE TRANSACTIONS:
Number of shares sold		136,019,180			213,026,415			11,872,410			4,750,110
Number of shares issued through reinvestment of dividends and distributions		1,236,240			8,042,427			1,411,165			2,007,964
Number of shares redeemed		(141,016,375	)		(69,833,191	)		(3,810,655	)		(15,836,639	)
Net increase (decrease) in shares outstanding		(3,760,955	)		151,235,651			9,472,920			(9,078,565	)

 

(1) Formerly Short-Term Bond Fund.

See Notes to Financial Statements.

106

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Inflation Protected Securities(2)						Asset Allocation
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	3,538,106		$	15,109,595		$	6,555,805		$	10,121,593
Net realized gain (loss)		4,528,409			(3,069,369	)		(15,775,079	)		(58,247,675	)
Net change in unrealized appreciation (depreciation)		20,753,166			(17,866,376	)		73,859,472			(210,254,179	)
Net increase (decrease) in net assets resulting from operations		28,819,681			(5,826,150	)		64,640,198			(258,380,261	)
Distributions to shareholders from:
Net investment income		(3,796,019	)		(15,002,206	)		(6,232,625	)		(8,684,265	)
Net realized gain		—			—			—			(1,418,715	)
Return of capital		—			(3,023,235	)		—			—
Total distributions		(3,796,019	)		(18,025,441	)		(6,232,625	)		(10,102,980	)
Capital share transactions:
Proceeds from sale of shares		62,296,704			142,024,194			9,619,555			24,615,058
Reinvestment of distributions		3,796,019			18,025,441			6,232,625			10,102,980
Value of shares redeemed		(52,474,428	)		(110,259,075	)		(56,199,780	)		(104,033,272	)
Net increase (decrease) from capital share transactions		13,618,295			49,790,560			(40,347,600	)		(69,315,234	)
Total increase (decrease) in net assets		38,641,957			25,938,969			18,059,973			(337,798,475	)
NET ASSETS at beginning of year		300,147,650			274,208,681			418,530,392			756,328,867
NET ASSETS at end of year	$	338,789,607		$	300,147,650		$	436,590,365		$	418,530,392
Undistributed net investment income (loss) included in net assets at end of year	$	115,873		$	(115,552	)	$	1,498,946		$	1,533,477
SHARE TRANSACTIONS:
Number of shares sold		6,009,514			13,373,935			1,825,816			3,413,851
Number of shares issued through reinvestment of dividends and distributions		356,714			1,708,246			1,021,676			1,895,493
Number of shares redeemed		(5,131,455	)		(10,916,351	)		(10,697,778	)		(14,652,613	)
Net increase (decrease) in shares outstanding		1,234,773			4,165,830			(7,850,286	)		(9,343,269	)

 

(2) Formerly US Government Securities Fund.

See Notes to Financial Statements.

107

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Equity Income						Growth & Income
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	18,435,756		$	25,287,631		$	11,779,819		$	11,473,402
Net realized loss		(40,462,690	)		(83,606,134	)		(99,528,723	)		(105,554,058	)
Net change in unrealized appreciation (depreciation)		414,726,626			(616,365,520	)		344,166,231			(338,533,863	)
Net increase (decrease) in net assets resulting from operations		392,699,692			(674,684,023	)		256,417,327			(432,614,519	)
Distributions to shareholders from:
Net investment income		(25,286,784	)		—			(11,876,196	)		(8,196,016	)
Net realized gain		—			(29,223,972	)		—			(3,259,751	)
Total distributions		(25,286,784	)		(29,223,972	)		(11,876,196	)		(11,455,767	)
Capital share transactions:
Proceeds from sale of shares		118,098,980			220,012,799			87,093,692			160,104,937
Reinvestment of distributions		25,286,363			29,222,714			11,875,945			11,455,513
Value of shares redeemed		(96,631,716	)		(178,045,400	)		(66,907,082	)		(82,158,711	)
Net increase from capital share transactions		46,753,627			71,190,113			32,062,555			89,401,739
Total increase (decrease) in net assets		414,166,535			(632,717,882	)		276,603,686			(354,668,547	)
NET ASSETS at beginning of year		1,102,032,096			1,734,749,978			747,031,914			1,101,700,461
NET ASSETS at end of year	$	1,516,198,631		$	1,102,032,096		$	1,023,635,600		$	747,031,914
Undistributed net investment income included in net assets at end of year	$	17,872,857		$	25,340,551		$	3,224,383		$	3,324,664
SHARE TRANSACTIONS:
Number of shares sold		19,014,964			29,484,424			12,298,844			19,440,636
Number of shares issued through reinvestment of dividends and distributions		3,327,153			5,012,472			1,418,525			1,776,049
Number of shares redeemed		(15,695,533	)		(21,612,639	)		(9,294,730	)		(9,399,564	)
Net increase in shares outstanding		6,646,584			12,884,257			4,422,639			11,817,121

 

See Notes to Financial Statements.

108

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Growth						Select Value
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	10,178,678		$	13,126,201		$	3,416,950		$	4,435,827
Net realized loss		(150,368,859	)		(360,977,349	)		(23,794,242	)		(54,515,848	)
Net change in unrealized appreciation (depreciation)		570,146,164			(720,780,481	)		100,368,071			(48,589,429	)
Net increase (decrease) in net assets resulting from operations		429,955,983			(1,068,631,629	)		79,990,779			(98,669,450	)
Distributions to shareholders from:
Net investment income		(9,946,245	)		(14,021,331	)		(2,291,563	)		(4,337,777	)
Total distributions		(9,946,245	)		(14,021,331	)		(2,291,563	)		(4,337,777	)
Capital share transactions:
Proceeds from sale of shares		83,366,281			185,731,169			15,452,911			50,508,186
Reinvestment of distributions		9,946,245			14,021,331			2,291,563			4,337,777
Value of shares redeemed		(126,464,350	)		(257,269,492	)		(20,598,604	)		(25,041,010	)
Net increase (decrease) from capital share transactions		(33,151,824	)		(57,516,992	)		(2,854,130	)		29,804,953
Total increase (decrease) in net assets		386,857,914			(1,140,169,952	)		74,845,086			(73,202,274	)
NET ASSETS at beginning of year		1,427,674,586			2,567,844,538			220,955,103			294,157,377
NET ASSETS at end of year	$	1,814,532,500		$	1,427,674,586		$	295,800,189		$	220,955,103
Undistributed net investment income included in net assets at end of year	$	497,760		$	—		$	114,887		$	171,781
SHARE TRANSACTIONS:
Number of shares sold		13,217,058			23,151,008			2,312,296			7,235,708
Number of shares issued through reinvestment of dividends and distributions		1,313,903			2,344,704			281,475			735,217
Number of shares redeemed		(20,304,324	)		(29,697,797	)		(3,113,993	)		(2,950,888	)
Net increase (decrease) in shares outstanding		(5,773,363	)		(4,202,085	)		(520,222	)		5,020,037

 

See Notes to Financial Statements.

109

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Aggressive Opportunities
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income (loss)	$	(141,380	)	$	2,800,502
Net realized loss		(64,061,734	)		(91,788,841	)
Net change in unrealized appreciation (depreciation)		399,139,106			(369,780,589	)
Net increase (decrease) in net assets resulting from operations		334,935,992			(458,768,928	)
Distributions to shareholders from:
Net investment income		(2,051,261	)		(895,850	)
Net realized gain		—			(28,096,325	)
Total distributions		(2,051,261	)		(28,992,175	)
Capital share transactions:
Proceeds from sale of shares		76,057,691			105,261,023
Reinvestment of distributions		2,051,261			28,992,175
Value of shares redeemed		(69,298,172	)		(132,834,825	)
Net increase from capital share transactions		8,810,780			1,418,373
Total increase (decrease) in net assets		341,695,511			(486,342,730	)
NET ASSETS at beginning of year		668,402,755			1,154,745,485
NET ASSETS at end of year	$	1,010,098,266		$	668,402,755
Undistributed net investment income included in net assets at end of year	$	2		$	3,011,138
SHARE TRANSACTIONS:
Number of shares sold		9,738,562			12,677,701
Number of shares issued through reinvestment of dividends and distributions		219,386			4,653,640
Number of shares redeemed		(9,660,025	)		(14,073,351	)
Net increase in shares outstanding		297,923			3,257,990

 

See Notes to Financial Statements.

110

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Discovery						International
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	1,918,568		$	3,236,157		$	14,328,916		$	18,719,392
Net realized gain (loss)		10,450,817			(60,852,641	)		(89,698,734	)		(109,502,098	)
Net change in unrealized appreciation (depreciation)		37,851,589			(9,133,750	)		309,248,047			(412,762,188	)
Net increase (decrease) in net assets resulting from operations		50,220,974			(66,750,234	)		233,878,229			(503,544,894	)
Distributions to shareholders from:
Net investment income		(1,533,607	)		(3,602,006	)		(18,665,287	)		(1,905,212	)
Net realized gain		—			—			—			(11,922,689	)
Return of capital		—			(1,224,171	)		—			—
Total distributions		(1,533,607	)		(4,826,177	)		(18,665,287	)		(13,827,901	)
Capital share transactions:
Proceeds from sale of shares		19,243,961			37,194,140			80,381,724			218,070,393
Reinvestment of distributions		1,533,607			4,826,177			18,665,287			13,827,901
Value of shares redeemed		(17,672,774	)		(17,571,917	)		(64,842,908	)		(93,344,702	)
Net increase from capital share transactions		3,104,794			24,448,400			34,204,103			138,553,592
Total increase (decrease) in net assets		51,792,161			(47,128,011	)		249,417,045			(378,819,203	)
NET ASSETS at beginning of year		126,382,103			173,510,114			766,209,603			1,145,028,806
NET ASSETS at end of year	$	178,174,264		$	126,382,103		$	1,015,626,648		$	766,209,603
Undistributed net investment income (loss) included in net assets at end of year	$	61,983		$	(1,476	)	$	12,898,017		$	14,648,764
SHARE TRANSACTIONS:
Number of shares sold		3,104,451			5,588,128			10,785,180			23,891,401
Number of shares issued through reinvestment of dividends and distributions		207,369			926,329			2,147,524			1,989,626
Number of shares redeemed		(2,804,416	)		(2,129,085	)		(8,667,366	)		(9,351,422	)
Net increase in shares outstanding		507,404			4,385,372			4,265,338			16,529,605

 

See Notes to Financial Statements.

111

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Diversified Assets(3)
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	4,086,675		$	9,659,704
Net realized gain (loss)		10,256,298			(32,967,303	)
Net change in unrealized appreciation (depreciation)		9,254,996			(5,025,014	)
Net increase (decrease) in net assets resulting from operations		23,597,969			(28,332,613	)
Distributions to shareholders from:
Net investment income		(2,104,166	)		—
Net realized gain		—			(7,650	)
Total distributions		(2,104,166	)		(7,650	)
Capital share transactions:
Proceeds from sale of shares		112,250,366			37,452,080
Reinvestment of distributions		2,104,166			7,650
Value of shares redeemed		(20,742,714	)		(136,203,815	)
Net increase (decrease) from capital share transactions		93,611,818			(98,744,085	)
Total increase (decrease) in net assets		115,105,621			(127,084,348	)
NET ASSETS at beginning of year		338,090,194			465,174,542
NET ASSETS at end of year	$	453,195,815		$	338,090,194
Undistributed net investment income (loss) included in net assets at end of year	$	3,795,786		$	(553,185	)
SHARE TRANSACTIONS:
Number of shares sold		11,596,021			3,802,171
Number of shares issued through reinvestment of dividends and distributions		213,188			829
Number of shares redeemed		(2,216,822	)		(14,138,289	)
Net increase (decrease) in shares outstanding		9,592,387			(10,335,289	)

 

(3) Renamed Diversifying Strategies Fund effective January 4, 2010.

See Notes to Financial Statements.

112

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Core Bond Index						500 Stock Index
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	39,219,047		$	47,439,766		$	6,879,767		$	7,002,287
Net realized gain		61,557			276,878			14,663,638			1,475,561
Net change in unrealized appreciation (depreciation)		14,114,167			(7,301,207	)		53,004,035			(158,003,031	)
Net increase (decrease) in net assets resulting from operations		53,394,771			40,415,437			74,547,440			(149,525,183	)
Distributions to shareholders from:
Net investment income—Class I		(34,095,496	)		(39,915,020	)		(1,595,466	)		(1,410,603	)
Net investment income—Class II		(11,167,739	)		(11,062,187	)		(5,028,709	)		(5,548,789	)
Total distributions		(45,263,235	)		(50,977,207	)		(6,624,175	)		(6,959,392	)
Capital share transactions:
Proceeds from sale of shares—Class I		212,991,537			82,995,603			15,529,076			10,720,302
Proceeds from sale of shares—Class II		36,266,130			43,947,884			42,291,858			43,829,250
Reinvestment of distributions—Class I		34,095,496			39,915,020			1,594,817			1,409,940
Reinvestment of distributions—Class II		11,167,739			11,062,128			5,028,709			5,548,789
Value of shares redeemed—Class I		(52,039,525	)		(345,645,270	)		(7,127,922	)		(12,464,661	)
Value of shares redeemed—Class II		(31,550,194	)		(35,193,171	)		(62,461,398	)		(43,763,464	)
Net increase (decrease) from capital share transactions		210,931,183			(202,917,806	)		(5,144,860	)		5,280,156
Total increase (decrease) in net assets		219,062,719			(213,479,576	)		62,778,405			(151,204,419	)
NET ASSETS at beginning of year		876,634,502			1,090,114,078			260,737,125			411,941,544
NET ASSETS at end of year	$	1,095,697,221		$	876,634,502		$	323,515,530		$	260,737,125
Undistributed net investment income included in net assets at end of year	$	—		$	144,064		$	188,998		$	142,916
SHARE TRANSACTIONS:
Number of shares sold—Class I		21,699,516			8,484,591			2,120,572			1,208,103
Number of shares issued through reinvestment of dividends and distributions—Class I		3,463,451			4,096,009			183,313			196,097
Number of shares redeemed—Class I		(5,336,437	)		(35,684,635	)		(954,191	)		(1,245,519	)
Net increase (decrease) in shares outstanding—Class I		19,826,530			(23,104,035	)		1,349,694			158,681
Number of shares sold—Class II		3,661,690			4,483,496			6,056,965			4,979,208
Number of shares issued through reinvestment of dividends and distributions—Class II		1,129,557			1,131,685			611,765			815,999
Number of shares redeemed—Class II		(3,178,007	)		(3,588,535	)		(7,948,426	)		(4,656,576	)
Net increase (decrease) in shares outstanding—Class II		1,613,240			2,026,646			(1,279,696	)		1,138,631

 

See Notes to Financial Statements.

113

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Broad Market Index						Mid/Small Company Index
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	9,102,928		$	10,451,557		$	2,873,703		$	3,002,931
Net realized gain		4,290,377			6,259,070			4,788,115			5,921,460
Net change in unrealized appreciation (depreciation)		93,131,016			(248,549,635	)		53,885,703			(96,835,294	)
Net increase (decrease) in net assets resulting from operations		106,524,321			(231,839,008	)		61,547,521			(87,910,903	)
Distributions to shareholders from:
Net investment income—Class I		(1,868,167	)		(2,222,805	)		(1,462,005	)		(1,441,088	)
Net investment income—Class II		(6,543,966	)		(8,208,047	)		(1,257,705	)		(1,451,846	)
Net realized gain—Class I		—			—			—			(4,842,940	)
Net realized gain—Class II		—			—			—			(4,429,446	)
Return of capital—Class I		—			—			—			(133,703	)
Return of capital—Class II		—			—			—			(134,701	)
Total distributions		(8,412,133	)		(10,430,852	)		(2,719,710	)		(12,433,724	)
Capital share transactions:
Proceeds from sale of shares—Class I		8,785,979			9,673,227			29,149,222			32,582,640
Proceeds from sale of shares—Class II		19,781,575			37,283,921			14,516,741			14,843,027
Reinvestment of distributions—Class I		1,868,167			2,222,805			1,461,859			6,416,887
Reinvestment of distributions—Class II		6,543,966			8,208,047			1,257,705			6,015,993
Value of shares redeemed—Class I		(9,884,210	)		(27,435,790	)		(12,174,315	)		(12,782,018	)
Value of shares redeemed—Class II		(37,188,399	)		(52,793,027	)		(16,013,772	)		(19,585,073	)
Net increase (decrease) from capital share transactions		(10,092,922	)		(22,840,817	)		18,197,440			27,491,456
Total increase (decrease) in net assets		88,019,266			(265,110,677	)		77,025,251			(72,853,171	)
NET ASSETS at beginning of year		390,007,662			655,118,339			154,593,043			227,446,214
NET ASSETS at end of year	$	478,026,928		$	390,007,662		$	231,618,294		$	154,593,043
Undistributed net investment income included in net assets at end of year	$	5,657,890		$	5,577,749		$	369,749		$	347,225
SHARE TRANSACTIONS:
Number of shares sold—Class I		1,119,245			989,537			2,930,819			2,686,183
Number of shares issued through reinvestment of dividends and distributions—Class I		199,804			294,411			120,389			716,970
Number of shares redeemed—Class I		(1,250,528	)		(2,627,138	)		(1,196,442	)		(894,092	)
Net increase (decrease) in shares outstanding—Class I		68,521			(1,343,190	)		1,854,766			2,509,061
Number of shares sold—Class II		2,675,039			4,019,341			1,498,355			1,169,646
Number of shares issued through reinvestment of dividends and distributions—Class II		743,632			1,154,437			109,047			707,764
Number of shares redeemed—Class II		(4,865,153	)		(5,411,842	)		(1,559,886	)		(1,492,600	)
Net increase (decrease) in shares outstanding—Class II		(1,446,482	)		(238,064	)		47,516			384,810

 

See Notes to Financial Statements.

114

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Overseas Equity Index
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	4,040,570		$	6,118,412
Net realized gain		8,748			2,692,054
Net change in unrealized appreciation (depreciation)		34,717,390			(107,217,124	)
Net increase (decrease) in net assets resulting from operations		38,766,708			(98,406,658	)
Distributions to shareholders from:
Net investment income—Class I		(1,209,617	)		(1,336,462	)
Net investment income—Class II		(3,308,887	)		(3,924,003	)
Net realized gain—Class I		—			(249,251	)
Net realized gain—Class II		—			(676,220	)
Total distributions		(4,518,504	)		(6,185,936	)
Capital share transactions:
Proceeds from sale of shares—Class I		9,107,878			6,859,056
Proceeds from sale of shares—Class II		21,495,194			16,619,604
Reinvestment of distributions—Class I		1,209,617			1,585,713
Reinvestment of distributions—Class II		3,308,887			4,600,223
Value of shares redeemed—Class I		(2,983,796	)		(13,507,891	)
Value of shares redeemed—Class II		(14,187,399	)		(32,207,815	)
Net increase (decrease) from capital share transactions		17,950,381			(16,051,110	)
Total increase (decrease) in net assets		52,198,585			(120,643,704	)
NET ASSETS at beginning of year		128,739,974			249,383,678
NET ASSETS at end of year	$	180,938,559		$	128,739,974
Undistributed net investment loss included in net assets at end of year	$	(246,977	)	$	(200,943	)
SHARE TRANSACTIONS:
Number of shares sold—Class I		986,669			556,826
Number of shares issued through reinvestment of dividends and distributions—Class I		119,883			192,441
Number of shares redeemed—Class I		(360,106	)		(1,137,746	)
Net increase (decrease) in shares outstanding—Class I		746,446			(388,479	)
Number of shares sold—Class II		2,494,024			1,470,231
Number of shares issued through reinvestment of dividends and distributions—Class II		348,671			592,812
Number of shares redeemed—Class II		(1,638,307	)		(2,832,342	)
Net increase (decrease) in shares outstanding—Class II		1,204,388			(769,299	)

 

See Notes to Financial Statements.

115

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Model Portfolio
	Savings Oriented						Conservative Growth
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	6,415,993		$	8,527,986		$	10,316,936		$	12,939,271
Net realized gain (loss)		(3,729,514	)		(956,543	)		(4,028,708	)		310,601
Net change in unrealized appreciation (depreciation)		35,490,254			(43,980,970	)		73,147,871			(116,156,750	)
Net increase (decrease) in net assets resulting from operations		38,176,733			(36,409,527	)		79,436,099			(102,906,878	)
Distributions to shareholders from:
Net investment income		(6,178,805	)		(8,184,379	)		(10,102,929	)		(11,657,680	)
Net realized gain		(89,456	)		(6,116,677	)		—			(15,629,609	)
Total distributions		(6,268,261	)		(14,301,056	)		(10,102,929	)		(27,287,289	)
Capital share transactions:
Proceeds from sale of shares		36,993,776			40,058,210			59,975,334			61,047,551
Reinvestment of distributions		6,267,265			14,298,539			10,102,137			27,285,031
Value of shares redeemed		(23,842,977	)		(59,131,415	)		(60,660,053	)		(106,480,414	)
Net increase (decrease) from capital share transactions		19,418,064			(4,774,666	)		9,417,418			(18,147,832	)
Total increase (decrease) in net assets		51,326,536			(55,485,249	)		78,750,588			(148,341,999	)
NET ASSETS at beginning of year		255,970,011			311,455,260			449,432,508			597,774,507
NET ASSETS at end of year	$	307,296,547		$	255,970,011		$	528,183,096		$	449,432,508
Undistributed net investment income included in net assets at end of year	$	647,536		$	445,678		$	1,405,028		$	1,271,503
SHARE TRANSACTIONS:
Number of shares sold		1,657,657			1,677,397			2,888,413			2,619,171
Number of shares issued through reinvestment of dividends and distributions		269,908			704,015			456,491			1,462,220
Number of shares redeemed		(1,126,809	)		(2,555,444	)		(3,091,971	)		(4,753,682	)
Net increase (decrease) in shares outstanding		800,756			(174,032	)		252,933			(672,291	)

 

See Notes to Financial Statements.

116

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Model Portfolio
	Traditional Growth						Long-Term Growth
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	21,563,204		$	22,871,242		$	22,100,879		$	17,159,801
Net realized gain (loss)		(8,749,178	)		1,417,309			(7,376,648	)		5,563,184
Net change in unrealized appreciation (depreciation)		237,730,560			(400,745,680	)		327,469,912			(556,065,057	)
Net increase (decrease) in net assets resulting from operations		250,544,586			(376,457,129	)		342,194,143			(533,342,072	)
Distributions to shareholders from:
Net investment income		(19,944,289	)		(18,147,087	)		(17,548,530	)		(14,835,289	)
Net realized gain		(989,933	)		(56,318,526	)		(7,065,993	)		(81,346,774	)
Total distributions		(20,934,222	)		(74,465,613	)		(24,614,523	)		(96,182,063	)
Capital share transactions:
Proceeds from sale of shares		104,314,253			128,026,199			135,760,589			192,635,516
Reinvestment of distributions		20,933,481			74,462,712			24,614,523			96,182,063
Value of shares redeemed		(73,884,585	)		(166,714,463	)		(60,448,266	)		(133,684,969	)
Net increase from capital share transactions		51,363,149			35,774,448			99,926,846			155,132,610
Total increase (decrease) in net assets		280,973,513			(415,148,294	)		417,506,466			(474,391,525	)
NET ASSETS at beginning of year		1,072,076,011			1,487,224,305			1,203,595,876			1,677,987,401
NET ASSETS at end of year	$	1,353,049,524		$	1,072,076,011		$	1,621,102,342		$	1,203,595,876
Undistributed net investment income included in net assets at end of year	$	6,786,279		$	5,345,856		$	7,764,277		$	3,270,009
SHARE TRANSACTIONS:
Number of shares sold		5,731,985			5,851,468			8,112,765			9,185,144
Number of shares issued through reinvestment of dividends and distributions		1,032,223			4,604,991			1,275,364			6,498,788
Number of shares redeemed		(4,427,502	)		(7,929,999	)		(3,796,408	)		(6,437,541	)
Net increase in shares outstanding		2,336,706			2,526,460			5,591,721			9,246,391

 

See Notes to Financial Statements.

117

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Model Portfolio
	All-Equity Growth
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	5,982,498		$	2,880,068
Net realized gain (loss)		(5,487,811	)		6,949,052
Net change in unrealized appreciation (depreciation)		145,987,231			(255,635,031	)
Net increase (decrease) in net assets resulting from operations		146,481,918			(245,805,911	)
Distributions to shareholders from:
Net investment income		(4,890,721	)		(3,151,587	)
Net realized gain		(4,261,652	)		(39,945,687	)
Total distributions		(9,152,373	)		(43,097,274	)
Capital share transactions:
Proceeds from sale of shares		79,959,327			82,578,115
Reinvestment of distributions		9,152,373			43,097,274
Value of shares redeemed		(20,565,073	)		(49,088,708	)
Net increase from capital share transactions		68,546,627			76,586,681
Total increase (decrease) in net assets		205,876,172			(212,316,504	)
NET ASSETS at beginning of year		385,656,896			597,973,400
NET ASSETS at end of year	$	591,533,068		$	385,656,896
Undistributed net investment income included in net assets at end of year	$	1,416,003		$	348,040
SHARE TRANSACTIONS:
Number of shares sold		5,516,041			4,141,968
Number of shares issued through reinvestment of dividends and distributions		526,604			3,456,076
Number of shares redeemed		(1,517,775	)		(2,373,655	)
Net increase in shares outstanding		4,524,870			5,224,389

 

See Notes to Financial Statements.

118

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Milestone Funds
	Milestone Retirement Income						Milestone 2010
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	1,289,894		$	1,389,780		$	1,653,486		$	1,702,431
Net realized loss		(3,001,541	)		(1,482,460	)		(6,227,767	)		(883,671	)
Net change in unrealized appreciation (depreciation)		10,183,438			(7,199,573	)		17,177,761			(14,388,882	)
Net increase (decrease) in net assets resulting from operations		8,471,791			(7,292,253	)		12,603,480			(13,570,122	)
Distributions to shareholders from:
Net investment income		(1,131,661	)		(1,362,640	)		(1,254,740	)		(1,721,769	)
Net realized gain		(131,351	)		(1,379,482	)		(362,908	)		(2,117,316	)
Total distributions		(1,263,012	)		(2,742,122	)		(1,617,648	)		(3,839,085	)
Capital share transactions:
Proceeds from sale of shares		38,952,559			23,704,479			27,945,309			27,918,306
Reinvestment of distributions		1,263,012			2,742,122			1,617,648			3,839,085
Value of shares redeemed		(14,064,321	)		(27,661,583	)		(14,802,207	)		(19,707,726	)
Net increase (decrease) from capital share transactions		26,151,250			(1,214,982	)		14,760,750			12,049,665
Total increase (decrease) in net assets		33,360,029			(11,249,357	)		25,746,582			(5,359,542	)
NET ASSETS at beginning of year		43,323,161			54,572,518			65,042,967			70,402,509
NET ASSETS at end of year	$	76,683,190		$	43,323,161		$	90,789,549		$	65,042,967
Undistributed net investment income included in net assets at end of year	$	195,858		$	51,822		$	424,795		$	43,936
SHARE TRANSACTIONS:
Number of shares sold		4,204,269			2,352,936			3,149,826			2,811,603
Number of shares issued through reinvestment of dividends and distributions		128,747			325,281			169,210			473,377
Number of shares redeemed		(1,581,577	)		(2,759,763	)		(1,691,970	)		(2,028,709	)
Net increase (decrease) in shares outstanding		2,751,439			(81,546	)		1,627,066			1,256,271

 

See Notes to Financial Statements.

119

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Milestone Funds
	Milestone 2015						Milestone 2020
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	3,041,974		$	2,438,482		$	3,098,508		$	1,785,923
Net realized gain (loss)		(5,218,726	)		758,929			(3,215,932	)		1,303,024
Net change in unrealized appreciation (depreciation)		32,034,154			(38,533,409	)		31,775,045			(39,201,986	)
Net increase (decrease) in net assets resulting from operations		29,857,402			(35,335,998	)		31,657,621			(36,113,039	)
Distributions to shareholders from:
Net investment income		(2,039,306	)		(2,474,669	)		(3,020,640	)		(1,810,723	)
Net realized gain		(1,178,592	)		(5,077,309	)		(1,486,573	)		(4,585,919	)
Total distributions		(3,217,898	)		(7,551,978	)		(4,507,213	)		(6,396,642	)
Capital share transactions:
Proceeds from sale of shares		51,762,958			40,523,338			51,504,692			49,804,866
Reinvestment of distributions		3,217,898			7,551,978			4,507,213			6,396,642
Value of shares redeemed		(15,880,219	)		(23,473,293	)		(9,454,164	)		(13,315,901	)
Net increase from capital share transactions		39,100,637			24,602,023			46,557,741			42,885,607
Total increase (decrease) in net assets		65,740,141			(18,285,953	)		73,708,149			375,926
NET ASSETS at beginning of year		120,248,887			138,534,840			112,439,911			112,063,985
NET ASSETS at end of year	$	185,989,028		$	120,248,887		$	186,148,060		$	112,439,911
Undistributed net investment income included in net assets at end of year	$	1,031,149		$	44,921		$	91,628		$	16,841
SHARE TRANSACTIONS:
Number of shares sold		5,994,475			4,044,233			6,052,676			5,005,265
Number of shares issued through reinvestment of dividends and distributions		337,660			973,193			477,965			841,663
Number of shares redeemed		(1,905,953	)		(2,364,993	)		(1,146,576	)		(1,344,430	)
Net increase in shares outstanding		4,426,182			2,652,433			5,384,065			4,502,498

 

See Notes to Financial Statements.

120

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Milestone Funds
	Milestone 2025						Milestone 2030
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	2,220,863		$	1,043,313		$	1,711,956		$	696,576
Net realized gain (loss)		(1,780,024	)		1,165,865			(1,338,826	)		1,014,347
Net change in unrealized appreciation (depreciation)		26,094,056			(32,407,196	)		23,295,872			(27,122,358	)
Net increase (decrease) in net assets resulting from operations		26,534,895			(30,198,018	)		23,669,002			(25,411,435	)
Distributions to shareholders from:
Net investment income		(2,222,049	)		(1,064,717	)		(1,712,689	)		(707,098	)
Net realized gain		(1,239,920	)		(3,910,687	)		(1,159,773	)		(3,092,036	)
Total distributions		(3,461,969	)		(4,975,404	)		(2,872,462	)		(3,799,134	)
Capital share transactions:
Proceeds from sale of shares		43,932,965			37,449,628			34,947,904			35,509,674
Reinvestment of distributions		3,461,969			4,975,404			2,872,462			3,799,134
Value of shares redeemed		(5,387,805	)		(9,826,405	)		(3,580,829	)		(5,380,669	)
Net increase from capital share transactions		42,007,129			32,598,627			34,239,537			33,928,139
Total increase (decrease) in net assets		65,080,055			(2,574,795	)		55,036,077			4,717,570
NET ASSETS at beginning of year		81,316,694			83,891,489			66,182,519			61,464,949
NET ASSETS at end of year	$	146,396,749		$	81,316,694		$	121,218,596		$	66,182,519
Undistributed net investment income included in net assets at end of year	$	13,575		$	15,443		$	13,726		$	15,428
SHARE TRANSACTIONS:
Number of shares sold		5,350,578			3,766,466			4,336,313			3,653,529
Number of shares issued through reinvestment of dividends and distributions		373,057			678,773			310,201			529,127
Number of shares redeemed		(682,625	)		(977,278	)		(441,272	)		(525,365	)
Net increase in shares outstanding		5,041,010			3,467,961			4,205,242			3,657,291

 

See Notes to Financial Statements.

121

VANTAGEPOINT FUNDS

Statements of Changes in Net Assets

	Milestone Funds
	Milestone 2035						Milestone 2040
	For the Year Ended December 31, 2009			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			For the Year Ended December 31, 2008
Increase (decrease) in net assets resulting from operations:
Net investment income	$	1,050,778		$	375,574		$	1,259,876		$	374,130
Net realized gain (loss)		(774,330	)		624,613			(858,323	)		441,008
Net change in unrealized appreciation (depreciation)		15,019,707			(16,765,639	)		17,901,529			(16,808,677	)
Net increase (decrease) in net assets resulting from operations		15,296,155			(15,765,452	)		18,303,082			(15,993,539	)
Distributions to shareholders from:
Net investment income		(1,050,895	)		(382,900	)		(1,260,704	)		(382,517	)
Net realized gain		(732,331	)		(1,859,445	)		(792,731	)		(1,838,729	)
Total distributions		(1,783,226	)		(2,242,345	)		(2,053,435	)		(2,221,246	)
Capital share transactions:
Proceeds from sale of shares		26,621,956			21,490,208			38,629,715			26,240,631
Reinvestment of distributions		1,783,226			2,242,345			2,053,435			2,221,246
Value of shares redeemed		(2,418,029	)		(3,180,578	)		(3,586,173	)		(5,127,590	)
Net increase from capital share transactions		25,987,153			20,551,975			37,096,977			23,334,287
Total increase in net assets		39,500,082			2,544,178			53,346,624			5,119,502
NET ASSETS at beginning of year		37,374,884			34,830,706			38,001,148			32,881,646
NET ASSETS at end of year	$	76,874,966		$	37,374,884		$	91,347,772		$	38,001,148
Undistributed net investment income included in net assets at end of year	$	9,402		$	10,345		$	10,815		$	11,607
SHARE TRANSACTIONS:
Number of shares sold		3,381,530			2,230,550			4,950,336			2,756,161
Number of shares issued through reinvestment of dividends and distributions		195,959			323,571			226,399			326,174
Number of shares redeemed		(315,341	)		(314,653	)		(455,748	)		(502,991	)
Net increase in shares outstanding		3,262,148			2,239,468			4,720,987			2,579,344

 

See Notes to Financial Statements.

122

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Money Market
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from investment operations:
Net investment income		0.00	#		0.02			0.05			0.04			0.03
Net realized and unrealized gain (loss)		—			0.00	#		—			(0.00	)#		—
Total from investment operations		0.00	#		0.02			0.05			0.04			0.03
Less distributions:
From net investment income		(0.00	)#		(0.02	)		(0.05	)		(0.04	)		(0.03	)
From net realized gain		—			(0.00	)#		—			(0.00	)#		—
Total distributions		(0.00	)#		(0.02	)		(0.05	)		(0.04	)		(0.03	)
Net Asset Value, end of year	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total return		0.16	%		2.41	%		4.75	%		4.51	%		2.70	%
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.51	%		0.51	%		0.51	%		0.52	%		0.52	%
Expenses net of reimbursements/waivers, if any		0.39	%		0.51	%		0.51	%		0.52	%		0.52	%
Net investment income before reimbursements/waivers		0.04	%		2.34	%		4.64	%		4.47	%		2.70	%
Net investment income net of reimbursements/waivers, if any		0.16	%		2.34	%		4.64	%		4.47	%		2.70	%
Supplemental Data:
Net assets, end of year (000)	$	454,274		$	458,035		$	306,799		$	217,771		$	142,979
Portfolio turnover		N/A			N/A			N/A			N/A			N/A

 

# Rounds to less than $0.01

See Notes to Financial Statements.

123

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Low Duration Bond(1)
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	9.28		$	9.83		$	9.76		$	9.79		$	9.98
Income from investment operations:
Net investment income		0.32			0.37			0.41			0.37			0.30
Net realized and unrealized gain (loss)		0.65			(0.51	)		0.09			0.01			(0.18	)
Total from investment operations		0.97			(0.14	)		0.50			0.38			0.12
Less distributions:
From net investment income		(0.30	)		(0.41	)		(0.43	)		(0.38	)		(0.31	)
Return of capital		—			—			—			(0.03	)		—
Total distributions		(0.30	)		(0.41	)		(0.43	)		(0.41	)		(0.31	)
Net Asset Value, end of year	$	9.95		$	9.28		$	9.83		$	9.76		$	9.79
Total return		10.63	%		(1.52	)%		5.24	%		3.98	%		1.27	%
Ratios to Average Net Assets:
Expenses		0.66	%		0.66	%		0.65	%		0.65	%		0.65	%
Net investment income		3.27	%		3.82	%		4.15	%		3.82	%		3.10	%
Supplemental Data:
Net assets, end of year (000)	$	517,659		$	394,704		$	507,120		$	607,673		$	543,913
Portfolio turnover		63	%		91	%		149	%		123	%		120	%

 

(1) Formerly Short-Term Bond Fund.

See Notes to Financial Statements.

124

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Inflation Protected Securities(2)
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	9.88		$	10.46		$	10.03		$	10.12		$	10.33
Income from investment operations:
Net investment income		0.11			0.57			0.50			0.39			0.31
Net realized and unrealized gain (loss)		0.85			(0.59	)		0.43			(0.06	)		(0.20	)
Total from investment operations		0.96			(0.02	)		0.93			0.33			0.11
Less distributions:
From net investment income		(0.12	)		(0.46	)		(0.50	)		(0.39	)		(0.32	)
Return of capital		—			(0.10	)		—			(0.03	)		—
Total distributions		(0.12	)		(0.56	)		(0.50	)		(0.42	)		(0.32	)
Net Asset Value, end of year	$	10.72		$	9.88		$	10.46		$	10.03		$	10.12
Total return		9.75	%		(0.40	)%		9.64	%		3.34	%		1.05	%
Ratios to Average Net Assets:
Expenses		0.67	%		0.67	%		0.68	%		0.60	%		0.59	%
Net investment income		1.13	%		4.64	%		4.86	%		3.85	%		3.01	%
Supplemental Data:
Net assets, end of year (000)	$	338,790		$	300,148		$	274,209		$	142,540		$	151,335
Portfolio turnover		105	%		149	%		174	%		69	%		91	%

 

(2) Formerly US Government Securities Fund.

See Notes to Financial Statements.

125

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Asset Allocation
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	5.27		$	8.53		$	8.40		$	7.51		$	7.33
Income from investment operations:
Net investment income		0.09			0.13			0.17			0.14			0.12
Net realized and unrealized gain (loss)		0.84			(3.26	)		0.36			1.03			0.22
Total from investment operations		0.93			(3.13	)		0.53			1.17			0.34
Less distributions:
From net investment income		(0.09	)		(0.11	)		(0.19	)		(0.14	)		(0.12	)
From net realized gain		—			(0.02	)		(0.21	)		(0.14	)		(0.04	)
Total distributions		(0.09	)		(0.13	)		(0.40	)		(0.28	)		(0.16	)
Net Asset Value, end of year	$	6.11		$	5.27		$	8.53		$	8.40		$	7.51
Total return		17.62	%		(36.71	)%		6.25	%		15.51	%		4.54	%
Ratios to Average Net Assets:
Expenses		0.81	%		0.77	%		0.75	%		0.75	%		0.75	%
Net investment income		1.62	%		1.70	%		1.87	%		1.67	%		1.48	%
Supplemental Data:
Net assets, end of year (000)	$	436,590		$	418,530		$	756,329		$	768,381		$	737,783
Portfolio turnover		35	%		5	%		4	%		15	%		9	%

 

See Notes to Financial Statements.

126

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Equity Income
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	5.79		$	9.78		$	9.90		$	8.87		$	8.95
Income from investment operations:
Net investment income		0.09			0.13			0.13			0.14			0.16
Net realized and unrealized gain (loss)		1.95			(3.96	)		0.25			1.52			0.36
Total from investment operations		2.04			(3.83	)		0.38			1.66			0.52
Less distributions:
From net investment income		(0.13	)		—			(0.14	)		(0.14	)		(0.16	)
From net realized gain		—			(0.16	)		(0.36	)		(0.49	)		(0.44	)
Total distributions		(0.13	)		(0.16	)		(0.50	)		(0.63	)		(0.60	)
Net Asset Value, end of year	$	7.70		$	5.79		$	9.78		$	9.90		$	8.87
Total return		35.28	%		(39.19	)%		3.76	%		18.73	%		5.76	%
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.88	%		0.88	%		0.88	%		0.89	%		0.90	%
Expenses net of reimbursements/waivers, if any		0.88	%		0.88	%		0.88	%		0.89	%		0.89	%
Net investment income before reimbursements/waivers		1.49	%		1.74	%		1.22	%		1.48	%		1.77	%
Net investment income net of reimbursements/waivers, if any		1.49	%		1.74	%		1.23	%		1.49	%		1.78	%
Supplemental Data:
Net assets, end of year (000)	$	1,516,199		$	1,102,032		$	1,734,750		$	1,467,953		$	1,260,470
Portfolio turnover		22	%		29	%		18	%		18	%		16	%

 

See Notes to Financial Statements.

127

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Growth & Income
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	6.43		$	10.56		$	11.49		$	10.64		$	10.12
Income from investment operations:
Net investment income		0.10			0.10			0.12			0.10			0.09
Net realized and unrealized gain (loss)		2.06			(4.13	)		0.58			1.32			0.52
Total from investment operations		2.16			(4.03	)		0.70			1.42			0.61
Less distributions:
From net investment income		(0.10	)		(0.07	)		(0.15	)		(0.10	)		(0.09	)
From net realized gain		—			(0.03	)		(1.48	)		(0.47	)		—
Total distributions		(0.10	)		(0.10	)		(1.63	)		(0.57	)		(0.09	)
Net Asset Value, end of year	$	8.49		$	6.43		$	10.56		$	11.49		$	10.64
Total return		33.61	%		(38.16	)%		5.98	%		13.28	%		6.02	%
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.82	%		0.81	%		0.81	%		0.81	%		0.82	%
Expenses net of reimbursements/waivers, if any		0.81	%		0.80	%		0.80	%		0.81	%		0.82	%
Net investment income before reimbursements/waivers		1.39	%		1.20	%		0.90	%		0.89	%		0.87	%
Net investment income net of reimbursements/waivers, if any		1.39	%		1.21	%		0.90	%		0.90	%		0.88	%
Supplemental Data:
Net assets, end of year (000)	$	1,023,636		$	747,032		$	1,101,700		$	1,176,614		$	1,016,831
Portfolio turnover		111	%		58	%		41	%		38	%		27	%

 

See Notes to Financial Statements.

128

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Growth
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	5.91		$	10.45		$	9.56		$	8.70		$	8.31
Income from investment operations:
Net investment income		0.04			0.06			0.05			0.03			0.01
Net realized and unrealized gain (loss)		1.79			(4.54	)		0.89			0.86			0.39
Total from investment operations		1.83			(4.48	)		0.94			0.89			0.40
Less distributions:
From net investment income		(0.04	)		(0.06	)		(0.05	)		(0.03	)		(0.01	)
Total distributions		(0.04	)		(0.06	)		(0.05	)		(0.03	)		(0.01	)
Net Asset Value, end of year	$	7.70		$	5.91		$	10.45		$	9.56		$	8.70
Total return		31.02	%		(42.89	)%		9.81	%		10.21	%		4.86	%
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.86	%		0.88	%		0.87	%		0.90	%		0.94	%
Expenses net of reimbursements/waivers, if any		0.84	%		0.87	%		0.87	%		0.90	%		0.94	%
Net investment income before reimbursements/waivers		0.64	%		0.63	%		0.41	%		0.31	%		0.11	%
Net investment income net of reimbursements/waivers, if any		0.66	%		0.64	%		0.41	%		0.31	%		0.11	%
Supplemental Data:
Net assets, end of year (000)	$	1,814,533		$	1,427,675		$	2,567,845		$	2,783,795		$	2,816,803
Portfolio turnover		89	%		175	%		50	%		62	%		85	%

 

See Notes to Financial Statements.

129

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Select Value
	For the Year Ended December 31,
	2009			2008			For the Period from October 30, 2007* to December 31, 2007
Net Asset Value, beginning of year	$	6.07		$	9.38		$	10.00
Income from investment operations:
Net investment income		0.10			0.12			0.04
Net realized and unrealized gain (loss)		2.14			(3.31	)		(0.62	)
Total from investment operations		2.24			(3.19	)		(0.58	)
Less distributions:
From net investment income		(0.06	)		(0.12	)		(0.04	)
Total distributions		(0.06	)		(0.12	)		(0.04	)
Net Asset Value, end of year	$	8.25		$	6.07		$	9.38
Total return		36.99	%		(33.96	)%		(5.85	)%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		1.04	%		1.01	%		1.04	%†
Expenses net of reimbursements/waivers, if any		1.04	%		0.98	%		1.00	%†
Net investment income before reimbursements/waivers		1.42	%		1.65	%		2.02	%†
Net investment income net of reimbursements/waivers, if any		1.42	%		1.68	%		2.06	%†
Supplemental Data:
Net assets, end of year (000)	$	295,800		$	220,955		$	294,157
Portfolio turnover		85	%		211	%		11	%††

 

* Commencement of operations

†† Not annualized

† Annualized

See Notes to Financial Statements.

130

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Aggressive Opportunities
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	6.32		$	11.26		$	12.85		$	11.63		$	10.52
Income from investment operations:
Net investment income (loss)		(0.00	)#		0.03			0.01			(0.00	)#		0.04
Net realized and unrealized gain (loss)		3.22			(4.68	)		0.72			1.56			1.35
Total from investment operations		3.22			(4.65	)		0.73			1.56			1.39
Less distributions:
From net investment income		(0.02	)		(0.01	)		—			(0.05	)		(0.28	)
From net realized gain		—			(0.28	)		(2.32	)		(0.29	)		—
Total distributions		(0.02	)		(0.29	)		(2.32	)		(0.34	)		(0.28	)
Net Asset Value, end of year	$	9.52		$	6.32		$	11.26		$	12.85		$	11.63
Total return		50.95	%		(41.29	)%		5.53	%		13.36	%		13.21	%
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.99	%		1.01	%		1.02	%		1.05	%		1.24	%
Expenses net of reimbursements/waivers, if any		0.98	%		0.96	%		1.02	%		1.04	%		1.22	%
Net investment income (loss) before reimbursements/waivers		(0.02	)%		0.25	%		0.07	%		(0.04	)%		0.29	%
Net investment income (loss) net of reimbursements/waivers, if any		(0.02	)%		0.30	%		0.08	%		(0.03	)%		0.31	%
Supplemental Data:
Net assets, end of year (000)	$	1,010,098		$	668,403		$	1,154,745		$	1,366,708		$	1,252,413
Portfolio turnover		53	%		57	%		45	%		88	%		45	%

 

# Rounds to less than $0.01

See Notes to Financial Statements.

131

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Discovery
	For the Year Ended December 31,
	2009			2008			For the Period from October 30, 2007* to December 31, 2007
Net Asset Value, beginning of year	$	5.46		$	9.25		$	10.00
Income from investment operations:
Net investment income		0.08			0.20			0.03
Net realized and unrealized gain (loss)		2.07			(3.77	)		(0.68	)
Total from investment operations		2.15			(3.57	)		(0.65	)
Less distributions:
From net investment income		(0.07	)		(0.17	)		(0.03	)
From net realized gain		—			—			(0.07	)
Return of capital		—			(0.05	)		—
Total distributions		(0.07	)		(0.22	)		(0.10	)
Net Asset Value, end of year	$	7.54		$	5.46		$	9.25
Total return		39.32	%		(38.51	)%		(6.46	)%††
Ratios to Average Net Assets:
Expenses		0.99	%		0.99	%		1.07	%†
Net investment income		1.35	%		2.12	%		2.08	%†
Supplemental Data:
Net assets, end of year (000)	$	178,174		$	126,382		$	173,510
Portfolio turnover		85	%		111	%		36	%††

 

* Commencement of operations

†† Not annualized

† Annualized

See Notes to Financial Statements.

132

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	International
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	6.94		$	12.19		$	12.57		$	11.56		$	10.06
Income from investment operations:
Net investment income		0.12			0.17			0.18			0.16			0.11
Net realized and unrealized gain (loss)		1.96			(5.29	)		1.37			2.29			1.59
Total from investment operations		2.08			(5.12	)		1.55			2.45			1.70
Less distributions:
From net investment income		(0.17	)		(0.02	)		(0.21	)		(0.20	)		(0.20	)
From net realized gain		—			(0.11	)		(1.72	)		(1.24	)		—
Total distributions		(0.17	)		(0.13	)		(1.93	)		(1.44	)		(0.20	)
Net Asset Value, end of year	$	8.85		$	6.94		$	12.19		$	12.57		$	11.56
Total return		29.97	%		(42.03	)%		12.46	%		21.14	%		16.88	%
Ratios to Average Net Assets:
Expenses		1.05	%		1.07	%		1.10	%		1.11	%		1.17	%
Net investment income		1.70	%		1.95	%		1.15	%		1.08	%		1.06	%
Supplemental Data:
Net assets, end of year (000)	$	1,015,627		$	766,210		$	1,145,029		$	1,049,831		$	722,161
Portfolio turnover		164	%		59	%		60	%		65	%		42	%

 

See Notes to Financial Statements.

133

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Diversified Assets(3)
	For the Year Ended December 31,
	2009			2008			For the Period from October 30, 2007* to December 31, 2007
Net Asset Value, beginning of year	$	9.28		$	9.95		$	10.00
Income from investment operations:
Net investment income		0.09			0.28			0.06
Net realized and unrealized gain (loss)		0.53			(0.95	)		(0.07	)
Total from investment operations		0.62			(0.67	)		(0.01	)
Less distributions:
From net investment income		(0.05	)		—			(0.04	)
From net realized gain		—			(0.00	)#		—
Total distributions		(0.05	)		(0.00	)#		(0.04	)
Net Asset Value, end of year	$	9.85		$	9.28		$	9.95
Total return		6.64	%		(6.73	)%		(0.07	)%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.96	%		1.00	%		1.02	%†
Expenses net of reimbursements/waivers, if any		0.95	%		0.99	%		1.01	%†
Net investment income before reimbursements/waivers		1.05	%		2.30	%		3.52	%†
Net investment income net of reimbursements/waivers, if any		1.06	%		2.31	%		3.53	%†
Supplemental Data:
Net assets, end of year (000)	$	453,196		$	338,090		$	465,175
Portfolio turnover		129	%		89	%		16	%††

 

(3) Renamed Diversifying Strategies Fund effective January 4, 2010.

* Commencement of operations

# Rounds to less than $0.01

†† Not annualized

† Annualized

See Notes to Financial Statements.

134

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Core Bond Index Class I
	For the Year Ended December 31,
	2009			2008			2007			2006			2005(a)
Net Asset Value, beginning of year	$	9.81		$	9.87		$	9.75		$	9.90		$	10.17
Income from investment operations:
Net investment income		0.40			0.46			0.47			0.44			0.41
Net realized and unrealized gain (loss)		0.13			(0.02	)		0.15			(0.08	)		(0.21	)
Total from investment operations		0.53			0.44			0.62			0.36			0.20
Less distributions:
From net investment income		(0.45	)		(0.50	)		(0.50	)		(0.47	)		(0.47	)
Return of capital		—			—			—			(0.04	)		—
Total distributions		(0.45	)		(0.50	)		(0.50	)		(0.51	)		(0.47	)
Net Asset Value, end of year	$	9.89		$	9.81		$	9.87		$	9.75		$	9.90
Total return		5.57	%		4.63	%		6.52	%		3.82	%		1.98	%
Ratios to Average Net Assets:
Expenses		0.42	%		0.44	%		0.44	%		0.44	%		0.45	%
Net investment income		3.99	%		4.70	%		4.71	%		4.50	%		4.03	%
Supplemental Data:
Net assets, end of year (000)	$	857,504		$	656,279		$	888,541		$	988,984		$	865,929
Portfolio turnover		60	%		49	%		76	%		28	%		31	%

 

(a) Per share amounts were calculated using the average shares outstanding method.

See Notes to Financial Statements.

135

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Core Bond Index Class II
	For the Year Ended December 31,
	2009			2008			2007			2006			2005(a)
Net Asset Value, beginning of year	$	9.86		$	9.92		$	9.80		$	9.94		$	10.21
Income from investment operations:
Net investment income		0.42			0.48			0.49			0.46			0.43
Net realized and unrealized gain (loss)		0.13			(0.02	)		0.15			(0.07	)		(0.21	)
Total from investment operations		0.55			0.46			0.64			0.39			0.22
Less distributions:
From net investment income		(0.47	)		(0.52	)		(0.52	)		(0.49	)		(0.49	)
Return of capital		—			—			—			(0.04	)		—
Total distributions		(0.47	)		(0.52	)		(0.52	)		(0.53	)		(0.49	)
Net Asset Value, end of year	$	9.94		$	9.86		$	9.92		$	9.80		$	9.94
Total return		5.74	%		4.82	%		6.71	%		4.11	%		2.17	%
Ratios to Average Net Assets:
Expenses		0.22	%		0.24	%		0.24	%		0.24	%		0.25	%
Net investment income		4.21	%		4.90	%		4.91	%		4.70	%		4.23	%
Supplemental Data:
Net assets, end of year (000)	$	238,193		$	220,355		$	201,573		$	170,987		$	165,467
Portfolio turnover		60	%		49	%		76	%		28	%		31	%

 

(a) Per share amounts were calculated using the average shares outstanding method.

See Notes to Financial Statements.

136

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	500 Stock Index Class I
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	7.12		$	11.63		$	11.23		$	9.87		$	9.58
Income from investment operations:
Net investment income		0.16			0.18			0.22			0.18			0.15
Net realized and unrealized gain (loss)		1.70			(4.52	)		0.35			1.33			0.28
Total from investment operations		1.86			(4.34	)		0.57			1.51			0.43
Less distributions:
From net investment income		(0.17	)		(0.17	)		(0.17	)		(0.15	)		(0.14	)
Total distributions		(0.17	)		(0.17	)		(0.17	)		(0.15	)		(0.14	)
Net Asset Value, end of year	$	8.81		$	7.12		$	11.63		$	11.23		$	9.87
Total return		26.13	%		(37.31	)%		5.06	%		15.27	%		4.44	%
Ratios to Average Net Assets:
Expenses		0.44	%		0.46	%		0.45	%		0.45	%		0.46	%
Net investment income		2.19	%		1.92	%		1.55	%		1.53	%		1.42	%
Supplemental Data:
Net assets, end of year (000)	$	85,772		$	59,748		$	95,694		$	107,977		$	108,030
Portfolio turnover		15	%		7	%		5	%		4	%		5	%

 

See Notes to Financial Statements.

137

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	500 Stock Index Class II
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	6.73		$	11.01		$	10.65		$	9.36		$	9.10
Income from investment operations:
Net investment income		0.19			0.19			0.20			0.17			0.15
Net realized and unrealized gain (loss)		1.58			(4.28	)		0.36			1.29			0.27
Total from investment operations		1.77			(4.09	)		0.56			1.46			0.42
Less distributions:
From net investment income		(0.18	)		(0.19	)		(0.20	)		(0.17	)		(0.16	)
Total distributions		(0.18	)		(0.19	)		(0.20	)		(0.17	)		(0.16	)
Net Asset Value, end of year	$	8.32		$	6.73		$	11.01		$	10.65		$	9.36
Total return		26.35	%		(37.15	)%		5.22	%		15.60	%		4.57	%
Ratios to Average Net Assets:
Expenses		0.24	%		0.26	%		0.25	%		0.25	%		0.26	%
Net investment income		2.40	%		2.13	%		1.75	%		1.73	%		1.62	%
Supplemental Data:
Net assets, end of year (000)	$	237,743		$	200,989		$	316,248		$	287,392		$	241,849
Portfolio turnover		15	%		7	%		5	%		4	%		5	%

 

See Notes to Financial Statements.

138

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Broad Market Index Class I
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	7.53		$	12.25		$	11.81		$	10.35		$	9.90
Income from investment operations:
Net investment income		0.17			0.21			0.26			0.22			0.17
Net realized and unrealized gain (loss)		1.92			(4.75	)		0.35			1.38			0.42
Total from investment operations		2.09			(4.54	)		0.61			1.60			0.59
Less distributions:
From net investment income		(0.15	)		(0.18	)		(0.17	)		(0.14	)		(0.14	)
Total distributions		(0.15	)		(0.18	)		(0.17	)		(0.14	)		(0.14	)
Net Asset Value, end of year	$	9.47		$	7.53		$	12.25		$	11.81		$	10.35
Total return		27.78	%		(37.06	)%		5.15	%		15.46	%		5.91	%
Ratios to Average Net Assets:
Expenses		0.43	%		0.44	%		0.44	%		0.44	%		0.45	%
Net investment income		2.05	%		1.81	%		1.48	%		1.42	%		1.37	%
Supplemental Data:
Net assets, end of year (000)	$	119,777		$	94,710		$	170,584		$	195,651		$	208,588
Portfolio turnover		7	%		4	%		2	%		2	%		2	%

 

See Notes to Financial Statements.

139

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Broad Market Index Class II
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	7.09		$	11.57		$	11.17		$	9.80		$	9.37
Income from investment operations:
Net investment income		0.18			0.20			0.20			0.17			0.15
Net realized and unrealized gain (loss)		1.81			(4.48	)		0.40			1.37			0.44
Total from investment operations		1.99			(4.28	)		0.60			1.54			0.59
Less distributions:
From net investment income		(0.17	)		(0.20	)		(0.20	)		(0.17	)		(0.16	)
Total distributions		(0.17	)		(0.20	)		(0.20	)		(0.17	)		(0.16	)
Net Asset Value, end of year	$	8.91		$	7.09		$	11.57		$	11.17		$	9.80
Total return		28.04	%		(36.97	)%		5.35	%		15.68	%		6.27	%
Ratios to Average Net Assets:
Expenses		0.23	%		0.24	%		0.24	%		0.24	%		0.25	%
Net investment income		2.26	%		2.03	%		1.68	%		1.63	%		1.52	%
Supplemental Data:
Net assets, end of year (000)	$	358,250		$	295,297		$	484,534		$	449,961		$	389,843
Portfolio turnover		7	%		4	%		2	%		2	%		2	%

 

See Notes to Financial Statements.

140

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Mid/Small Company Index Class I
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	9.17		$	16.23		$	16.52		$	14.99		$	13.80
Income from investment operations:
Net investment income		0.13			0.18			0.16			0.16			0.13
Net realized and unrealized gain (loss)		3.19			(6.46	)		0.68			2.09			1.20
Total from investment operations		3.32			(6.28	)		0.84			2.25			1.33
Less distributions:
From net investment income		(0.14	)		(0.18	)		(0.20	)		(0.12	)		(0.14	)
From net realized gain		—			(0.59	)		(0.93	)		(0.60	)		—
Return of capital		—			(0.01	)		—			—			—
Total distributions		(0.14	)		(0.78	)		(1.13	)		(0.72	)		(0.14	)
Net Asset Value, end of year	$	12.35		$	9.17		$	16.23		$	16.52		$	14.99
Total return		36.19	%		(38.57	)%		4.98	%		14.99	%		9.63	%
Ratios to Average Net Assets:
Expenses		0.48	%		0.50	%		0.50	%		0.51	%		0.52	%
Net investment income		1.46	%		1.47	%		1.16	%		1.04	%		1.01	%
Supplemental Data:
Net assets, end of year (000)	$	134,165		$	82,628		$	105,496		$	78,663		$	68,330
Portfolio turnover		25	%		15	%		18	%		20	%		12	%

 

See Notes to Financial Statements.

141

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Mid/Small Company Index Class II
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	8.71		$	15.48		$	15.80		$	14.36		$	13.22
Income from investment operations:
Net investment income		0.17			0.23			0.22			0.20			0.17
Net realized and unrealized gain (loss)		3.00			(6.20	)		0.61			2.00			1.14
Total from investment operations		3.17			(5.97	)		0.83			2.20			1.31
Less distributions:
From net investment income		(0.15	)		(0.20	)		(0.22	)		(0.16	)		(0.17	)
From net realized gain		—			(0.59	)		(0.93	)		(0.60	)		—
Return of capital		—			(0.01	)		—			—			—
Total distributions		(0.15	)		(0.80	)		(1.15	)		(0.76	)		(0.17	)
Net Asset Value, end of year	$	11.73		$	8.71		$	15.48		$	15.80		$	14.36
Total return		36.47	%		(38.44	)%		5.20	%		15.24	%		9.87	%
Ratios to Average Net Assets:
Expenses		0.28	%		0.30	%		0.30	%		0.31	%		0.32	%
Net investment income		1.66	%		1.63	%		1.36	%		1.24	%		1.20	%
Supplemental Data:
Net assets, end of year (000)	$	97,453		$	71,965		$	121,950		$	106,900		$	95,502
Portfolio turnover		25	%		15	%		18	%		20	%		12	%

 

See Notes to Financial Statements.

142

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Overseas Equity Index Class I
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	8.20		$	14.80		$	13.79		$	11.26		$	10.17
Income from investment operations:
Net investment income		0.22			0.39			0.35			0.21			0.18
Net realized and unrealized gain (loss)		2.12			(6.61	)		1.05			2.64			1.12
Total from investment operations		2.34			(6.22	)		1.40			2.85			1.30
Less distributions:
From net investment income		(0.24	)		(0.32	)		(0.38	)		(0.32	)		(0.21	)
From net realized gain		—			(0.06	)		(0.01	)		—			—
Total distributions		(0.24	)		(0.38	)		(0.39	)		(0.32	)		(0.21	)
Net Asset Value, end of year	$	10.30		$	8.20		$	14.80		$	13.79		$	11.26
Total return		28.63	%		(42.05	)%		10.17	%		25.35	%		12.74	%
Ratios to Average Net Assets:
Expenses		0.59	%		0.63	%		0.63	%		0.73	%		0.95	%
Net investment income		2.61	%		3.07	%		2.36	%		2.15	%		1.82	%
Supplemental Data:
Net assets, end of year (000)	$	52,937		$	36,021		$	70,723		$	55,259		$	32,639
Portfolio turnover		5	%		6	%		5	%		3	%		8	%

 

See Notes to Financial Statements.

143

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Overseas Equity Index Class II
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	7.72		$	13.98		$	13.06		$	10.67		$	9.64
Income from investment operations:
Net investment income		0.23			0.39			0.35			0.25			0.20
Net realized and unrealized gain (loss)		2.00			(6.25	)		0.99			2.48			1.06
Total from investment operations		2.23			(5.86	)		1.34			2.73			1.26
Less distributions:
From net investment income		(0.26	)		(0.34	)		(0.41	)		(0.34	)		(0.23	)
From net realized gain		—			(0.06	)		(0.01	)		—			—
Total distributions		(0.26	)		(0.40	)		(0.42	)		(0.34	)		(0.23	)
Net Asset Value, end of year	$	9.69		$	7.72		$	13.98		$	13.06		$	10.67
Total return		28.94	%		(41.90	)%		10.30	%		25.64	%		13.03	%
Ratios to Average Net Assets:
Expenses		0.39	%		0.43	%		0.43	%		0.53	%		0.75	%
Net investment income		2.83	%		3.27	%		2.56	%		2.37	%		1.98	%
Supplemental Data:
Net assets, end of year (000)	$	128,002		$	92,719		$	178,661		$	107,963		$	56,920
Portfolio turnover		5	%		6	%		5	%		3	%		8	%

 

See Notes to Financial Statements.

144

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Model Portfolio Savings Oriented
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	20.58		$	24.70		$	24.70		$	24.23		$	24.21
Income from investment operations:
Net investment income		0.49			0.73			0.88			0.84			0.72
Net realized and unrealized gain (loss)		2.64			(3.63	)		0.63			0.83			0.02
Total from investment operations		3.13			(2.90	)		1.51			1.67			0.74
Less distributions:
From net investment income		(0.48	)		(0.70	)		(0.96	)		(0.86	)		(0.72	)
From net realized gain		(0.01	)		(0.52	)		(0.55	)		(0.34	)		—
Total distributions		(0.49	)		(1.22	)		(1.51	)		(1.20	)		(0.72	)
Net Asset Value, end of year	$	23.22		$	20.58		$	24.70		$	24.70		$	24.23
Total return		15.18	%		(11.67	)%		6.15	%		6.90	%		3.06	%
Ratios to Average Net Assets:
Expenses		0.16	%		0.16	%		0.15	%		0.15	%		0.16	%
Net investment income		2.36	%		2.88	%		3.66	%		3.36	%		3.01	%
Supplemental Data:
Net assets, end of year (000)	$	307,297		$	255,970		$	311,455		$	292,287		$	281,036
Portfolio turnover		7	%		18	%		27	%		11	%		9	%

 

See Notes to Financial Statements.

145

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Model Portfolio Conservative Growth
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	19.04		$	24.62		$	24.48		$	23.24		$	22.87
Income from investment operations:
Net investment income		0.44			0.58			0.68			0.69			0.62
Net realized and unrealized gain (loss)		3.08			(4.92	)		0.92			1.26			0.37
Total from investment operations		3.52			(4.34	)		1.60			1.95			0.99
Less distributions:
From net investment income		(0.43	)		(0.53	)		(0.75	)		(0.71	)		(0.62	)
From net realized gain		—			(0.71	)		(0.71	)		—			—
Total distributions		(0.43	)		(1.24	)		(1.46	)		(0.71	)		(0.62	)
Net Asset Value, end of year	$	22.13		$	19.04		$	24.62		$	24.48		$	23.24
Total return		18.50	%		(17.56	)%		6.57	%		8.38	%		4.31	%
Ratios to Average Net Assets:
Expenses		0.15	%		0.15	%		0.14	%		0.15	%		0.15	%
Net investment income		2.20	%		2.40	%		2.99	%		2.86	%		2.72	%
Supplemental Data:
Net assets, end of year (000)	$	528,183		$	449,433		$	597,775		$	549,966		$	512,992
Portfolio turnover		13	%		19	%		27	%		9	%		7	%

 

See Notes to Financial Statements.

146

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Model Portfolio Traditional Growth
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	16.65		$	24.04		$	24.26		$	22.46		$	21.67
Income from investment operations:
Net investment income		0.33			0.38			0.46			0.48			0.47
Net realized and unrealized gain (loss)		3.62			(6.53	)		1.25			1.86			0.79
Total from investment operations		3.95			(6.15	)		1.71			2.34			1.26
Less distributions:
From net investment income		(0.30	)		(0.30	)		(0.56	)		(0.51	)		(0.47	)
From net realized gain		(0.02	)		(0.94	)		(1.37	)		(0.03	)		—
Total distributions		(0.32	)		(1.24	)		(1.93	)		(0.54	)		(0.47	)
Net Asset Value, end of year	$	20.28		$	16.65		$	24.04		$	24.26		$	22.46
Total return		23.72	%		(25.39	)%		7.03	%		10.42	%		5.79	%
Ratios to Average Net Assets:
Expenses		0.13	%		0.13	%		0.13	%		0.13	%		0.14	%
Net investment income		1.86	%		1.74	%		2.23	%		2.13	%		2.21	%
Supplemental Data:
Net assets, end of year (000)	$	1,353,050		$	1,072,076		$	1,487,224		$	1,331,012		$	1,135,671
Portfolio turnover		8	%		20	%		28	%		6	%		4	%

 

See Notes to Financial Statements.

147

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Model Portfolio Long-Term Growth
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	15.35		$	24.26		$	24.56		$	22.16		$	21.02
Income from investment operations:
Net investment income		0.26			0.24			0.26			0.34			0.38
Net realized and unrealized gain (loss)		3.99			(7.81	)		1.64			2.43			1.14
Total from investment operations		4.25			(7.57	)		1.90			2.77			1.52
Less distributions:
From net investment income		(0.21	)		(0.21	)		(0.43	)		(0.32	)		(0.38	)
From net realized gain		(0.09	)		(1.13	)		(1.77	)		(0.05	)		—
Total distributions		(0.30	)		(1.34	)		(2.20	)		(0.37	)		(0.38	)
Net Asset Value, end of year	$	19.30		$	15.35		$	24.26		$	24.56		$	22.16
Total return		27.67	%		(30.99	)%		7.74	%		12.50	%		7.24	%
Ratios to Average Net Assets:
Expenses		0.13	%		0.13	%		0.12	%		0.13	%		0.14	%
Net investment income		1.63	%		1.16	%		1.57	%		1.51	%		1.87	%
Supplemental Data:
Net assets, end of year (000)	$	1,621,102		$	1,203,596		$	1,677,987		$	1,470,918		$	1,209,329
Portfolio turnover		5	%		14	%		27	%		6	%		7	%

 

See Notes to Financial Statements.

148

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Model Portfolio All-Equity Growth
	For the Year Ended December 31,
	2009			2008			2007			2006			2005
Net Asset Value, beginning of year	$	13.07		$	24.63		$	25.88		$	22.96		$	21.39
Income from investment operations:
Net investment income		0.18			0.11			0.04			0.15			0.25
Net realized and unrealized gain (loss)		4.41			(10.01	)		1.98			3.19			1.57
Total from investment operations		4.59			(9.90	)		2.02			3.34			1.82
Less distributions:
From net investment income		(0.15	)		(0.12	)		(0.21	)		(0.19	)		(0.25	)
From net realized gain		(0.13	)		(1.54	)		(3.06	)		(0.23	)		—
Total distributions		(0.28	)		(1.66	)		(3.27	)		(0.42	)		(0.25	)
Net Asset Value, end of year	$	17.38		$	13.07		$	24.63		$	25.88		$	22.96
Total return		35.07	%		(39.86	)%		7.75	%		14.58	%		8.49	%
Ratios to Average Net Assets:
Expenses		0.14	%		0.15	%		0.14	%		0.15	%		0.16	%
Net investment income		1.30	%		0.57	%		0.82	%		0.71	%		1.30	%
Supplemental Data:
Net assets, end of year (000)	$	591,533		$	385,657		$	597,973		$	470,888		$	303,975
Portfolio turnover		3	%		7	%		23	%		6	%		2	%

 

See Notes to Financial Statements.

149

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Milestone Retirement Income
	For the Year Ended December 31,
	2009			2008			2007			2006			For the Period from January 3, 2005* to December 31, 2005
Net Asset Value, beginning of year	$	8.56		$	10.61		$	10.51		$	10.14		$	10.00
Income from investment operations:
Net investment income		0.16			0.29			0.27			0.29			0.19
Net realized and unrealized gain (loss)		1.26			(1.76	)		0.36			0.48			0.15
Total from investment operations		1.42			(1.47	)		0.63			0.77			0.34
Less distributions:
From net investment income		(0.15	)		(0.29	)		(0.29	)		(0.29	)		(0.19	)
From net realized gain		(0.02	)		(0.29	)		(0.24	)		(0.11	)		(0.01	)
Total distributions		(0.17	)		(0.58	)		(0.53	)		(0.40	)		(0.20	)
Net Asset Value, end of year	$	9.81		$	8.56		$	10.61		$	10.51		$	10.14
Total return		16.53	%		(13.76	)%		6.05	%		7.52	%		3.39	%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.25	%		0.27	%		0.30	%		0.53	%		1.20	%†
Expenses net of reimbursements/waivers, if any		0.20	%		0.07	%		0.14	%		0.16	%		0.15	%†
Net investment income before reimbursements/waivers		2.29	%		2.55	%		3.48	%		3.06	%		2.54	%†
Net investment income net of reimbursements/waivers, if any		2.34	%		2.74	%		3.63	%		3.43	%		3.59	%†
Supplemental Data:
Net assets, end of year (000)	$	76,683		$	43,323		$	54,573		$	22,534		$	13,146
Portfolio turnover		14	%		36	%		63	%		25	%		35	%††

 

* Commencement of operations

†† Not annualized

† Annualized

See Notes to Financial Statements.

150

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Milestone 2010
	For the Year Ended December 31,
	2009			2008			2007			2006			For the Period from January 3, 2005* to December 31, 2005
Net Asset Value, beginning of year	$	8.27		$	10.65		$	10.85		$	10.28		$	10.00
Income from investment operations:
Net investment income		0.18			0.23			0.27			0.24			0.18
Net realized and unrealized gain (loss)		1.29			(2.09	)		0.42			0.68			0.29
Total from investment operations		1.47			(1.86	)		0.69			0.92			0.47
Less distributions:
From net investment income		(0.14	)		(0.23	)		(0.30	)		(0.25	)		(0.18	)
From net realized gain		(0.04	)		(0.29	)		(0.59	)		(0.10	)		(0.01	)
Total distributions		(0.18	)		(0.52	)		(0.89	)		(0.35	)		(0.19	)
Net Asset Value, end of year	$	9.56		$	8.27		$	10.65		$	10.85		$	10.28
Total return		17.71	%		(17.34	)%		6.43	%		8.95	%		4.65	%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.22	%		0.23	%		0.24	%		0.32	%		0.62	%†
Expenses net of reimbursements/waivers, if any		0.19	%		0.13	%		0.18	%		0.18	%		0.15	%†
Net investment income before reimbursements/waivers		2.15	%		2.31	%		2.97	%		2.74	%		2.49	%†
Net investment income net of reimbursements/waivers, if any		2.17	%		2.41	%		3.02	%		2.88	%		2.97	%†
Supplemental Data:
Net assets, end of year (000)	$	90,790		$	65,043		$	70,403		$	48,483		$	26,638
Portfolio turnover		20	%		27	%		58	%		15	%		18	%††

 

* Commencement of operations

†† Not annualized

† Annualized

See Notes to Financial Statements.

151

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Milestone 2015
	For the Year Ended December 31,
	2009			2008			2007			2006			For the Period from January 3, 2005* to December 31, 2005
Net Asset Value, beginning of year	$	7.96		$	11.13		$	11.29		$	10.44		$	10.00
Income from investment operations:
Net investment income		0.16			0.17			0.22			0.19			0.15
Net realized and unrealized gain (loss)		1.58			(2.80	)		0.56			0.94			0.44
Total from investment operations		1.74			(2.63	)		0.78			1.13			0.59
Less distributions:
From net investment income		(0.11	)		(0.18	)		(0.25	)		(0.20	)		(0.15	)
From net realized gain		(0.06	)		(0.36	)		(0.69	)		(0.08	)		(0.00	)#
Total distributions		(0.17	)		(0.54	)		(0.94	)		(0.28	)		(0.15	)
Net Asset Value, end of year	$	9.53		$	7.96		$	11.13		$	11.29		$	10.44
Total return		21.84	%		(23.54	)%		6.88	%		10.87	%		5.93	%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.18	%		0.19	%		0.18	%		0.24	%		0.48	%†
Expenses net of reimbursements/waivers, if any		0.17	%		0.14	%		0.18	%		0.17	%		0.15	%†
Net investment income before reimbursements/waivers		2.06	%		1.81	%		2.57	%		2.33	%		2.43	%†
Net investment income net of reimbursements/waivers, if any		2.07	%		1.85	%		2.57	%		2.39	%		2.76	%†
Supplemental Data:
Net assets, end of year (000)	$	185,989		$	120,249		$	138,535		$	84,357		$	41,455
Portfolio turnover		12	%		21	%		40	%		10	%		8	%††

 

* Commencement of operations

# Rounds to less than $0.01

†† Not annualized

† Annualized

See Notes to Financial Statements.

152

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Milestone 2020
	For the Year Ended December 31,
	2009			2008			2007			2006			For the Period from January 3, 2005* to December 31, 2005
Net Asset Value, beginning of year	$	7.83		$	11.38		$	11.52		$	10.50		$	10.00
Income from investment operations:
Net investment income		0.16			0.13			0.20			0.18			0.14
Net realized and unrealized gain (loss)		1.68			(3.20	)		0.63			1.07			0.50
Total from investment operations		1.84			(3.07	)		0.83			1.25			0.64
Less distributions:
From net investment income		(0.16	)		(0.14	)		(0.23	)		(0.18	)		(0.14	)
From net realized gain		(0.08	)		(0.34	)		(0.74	)		(0.05	)		(0.00	)#
Total distributions		(0.24	)		(0.48	)		(0.97	)		(0.23	)		(0.14	)
Net Asset Value, end of year	$	9.43		$	7.83		$	11.38		$	11.52		$	10.50
Total return		23.43	%		(26.86	)%		7.17	%		11.92	%		6.48	%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.18	%		0.19	%		0.20	%		0.28	%		0.67	%†
Expenses net of reimbursements/waivers, if any		0.17	%		0.15	%		0.19	%		0.18	%		0.15	%†
Net investment income before reimbursements/waivers		2.16	%		1.50	%		2.23	%		2.05	%		2.14	%†
Net investment income net of reimbursements/waivers, if any		2.17	%		1.54	%		2.24	%		2.16	%		2.67	%†
Supplemental Data:
Net assets, end of year (000)	$	186,148		$	112,440		$	112,064		$	62,402		$	27,240
Portfolio turnover		7	%		12	%		40	%		5	%		6	%††

 

* Commencement of operations

# Rounds to less than $0.01

†† Not annualized

† Annualized

See Notes to Financial Statements.

153

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Milestone 2025
	For the Year Ended December 31,
	2009			2008			2007			2006			For the Period from January 3, 2005* to December 31, 2005
Net Asset Value, beginning of year	$	7.58		$	11.55		$	11.72		$	10.58		$	10.00
Income from investment operations:
Net investment income		0.14			0.10			0.16			0.15			0.14
Net realized and unrealized gain (loss)		1.78			(3.57	)		0.68			1.19			0.58
Total from investment operations		1.92			(3.47	)		0.84			1.34			0.72
Less distributions:
From net investment income		(0.14	)		(0.11	)		(0.20	)		(0.16	)		(0.14	)
From net realized gain		(0.08	)		(0.39	)		(0.81	)		(0.04	)		(0.00	)#
Total distributions		(0.22	)		(0.50	)		(1.01	)		(0.20	)		(0.14	)
Net Asset Value, end of year	$	9.28		$	7.58		$	11.55		$	11.72		$	10.58
Total return		25.40	%		(29.90	)%		7.17	%		12.70	%		7.18	%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.19	%		0.21	%		0.22	%		0.33	%		0.90	%†
Expenses net of reimbursements/waivers, if any		0.18	%		0.15	%		0.18	%		0.18	%		0.15	%†
Net investment income before reimbursements/waivers		2.03	%		1.17	%		1.98	%		1.81	%		1.81	%†
Net investment income net of reimbursements/waivers, if any		2.04	%		1.22	%		2.02	%		1.96	%		2.56	%†
Supplemental Data:
Net assets, end of year (000)	$	146,397		$	81,317		$	83,891		$	48,804		$	19,479
Portfolio turnover		5	%		11	%		38	%		4	%		7	%††

 

* Commencement of operations

# Rounds to less than $0.01

†† Not annualized

† Annualized

See Notes to Financial Statements.

154

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Milestone 2030
	For the Year Ended December 31,
	2009			2008			2007			2006			For the Period from January 3, 2005* to December 31, 2005
Net Asset Value, beginning of year	$	7.45		$	11.75		$	11.88		$	10.64		$	10.00
Income from investment operations:
Net investment income		0.13			0.08			0.14			0.14			0.13
Net realized and unrealized gain (loss)		1.90			(3.92	)		0.70			1.30			0.64
Total from investment operations		2.03			(3.84	)		0.84			1.44			0.77
Less distributions:
From net investment income		(0.13	)		(0.09	)		(0.18	)		(0.15	)		(0.13	)
From net realized gain		(0.09	)		(0.37	)		(0.79	)		(0.05	)		(0.00	)#
Total distributions		(0.22	)		(0.46	)		(0.97	)		(0.20	)		(0.13	)
Net Asset Value, end of year	$	9.26		$	7.45		$	11.75		$	11.88		$	10.64
Total return		27.33	%		(32.54	)%		7.11	%		13.52	%		7.68	%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.20	%		0.23	%		0.26	%		0.51	%		1.75	%†
Expenses net of reimbursements/waivers, if any		0.19	%		0.16	%		0.20	%		0.18	%		0.15	%†
Net investment income before reimbursements/waivers		1.89	%		1.01	%		1.78	%		1.43	%		0.98	%†
Net investment income net of reimbursements/waivers, if any		1.90	%		1.07	%		1.85	%		1.76	%		2.58	%†
Supplemental Data:
Net assets, end of year (000)	$	121,219		$	66,183		$	61,465		$	26,007		$	10,054
Portfolio turnover		4	%		10	%		43	%		3	%		15	%††

 

* Commencement of operations

# Rounds to less than $0.01

†† Not annualized

† Annualized

See Notes to Financial Statements.

155

VANTAGEPOINT FUNDS

Financial Highlights
(For a share outstanding throughout each period)

	Milestone 2035
	For the Year Ended December 31,
	2009			2008			2007			2006			For the Period from January 3, 2005* to December 31, 2005
Net Asset Value, beginning of year	$	7.21		$	11.83		$	11.98		$	10.69		$	10.00
Income from investment operations:
Net investment income		0.13			0.08			0.12			0.13			0.12
Net realized and unrealized gain (loss)		1.98			(4.23	)		0.75			1.36			0.69
Total from investment operations		2.11			(4.15	)		0.87			1.49			0.81
Less distributions:
From net investment income		(0.13	)		(0.08	)		(0.17	)		(0.13	)		(0.12	)
From net realized gain		(0.09	)		(0.39	)		(0.85	)		(0.07	)		(0.00	)#
Total distributions		(0.22	)		(0.47	)		(1.02	)		(0.20	)		(0.12	)
Net Asset Value, end of year	$	9.10		$	7.21		$	11.83		$	11.98		$	10.69
Total return		29.22	%		(34.91	)%		7.25	%		14.00	%		8.13	%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.25	%		0.31	%		0.40	%		0.76	%		3.50	%†
Expenses net of reimbursements/waivers, if any		0.22	%		0.19	%		0.20	%		0.18	%		0.15	%†
Net investment income (loss) before reimbursements/waivers		1.92	%		0.90	%		1.60	%		1.04	%		(1.09	)%†
Net investment income net of reimbursements/waivers, if any		1.95	%		1.03	%		1.80	%		1.62	%		2.26	%†
Supplemental Data:
Net assets, end of year (000)	$	76,875		$	37,375		$	34,831		$	16,418		$	4,458
Portfolio turnover		4	%		9	%		40	%		10	%		13	%††

 

* Commencement of operations

# Rounds to less than $0.01

†† Not annualized

† Annualized

See Notes to Financial Statements.

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Financial Highlights
(For a share outstanding throughout each period)

	Milestone 2040
	For the Year Ended December 31,
	2009			2008			2007			2006			For the Period from January 3, 2005* to December 31, 2005
Net Asset Value, beginning of year	$	7.10		$	11.85		$	11.91		$	10.68		$	10.00
Income from investment operations:
Net investment income		0.13			0.08			0.11			0.12			0.12
Net realized and unrealized gain (loss)		2.05			(4.38	)		0.75			1.39			0.70
Total from investment operations		2.18			(4.30	)		0.86			1.51			0.82
Less distributions:
From net investment income		(0.13	)		(0.08	)		(0.16	)		(0.13	)		(0.12	)
From net realized gain		(0.08	)		(0.37	)		(0.76	)		(0.15	)		(0.02	)
Total distributions		(0.21	)		(0.45	)		(0.92	)		(0.28	)		(0.14	)
Net Asset Value, end of year	$	9.07		$	7.10		$	11.85		$	11.91		$	10.68
Total return		30.70	%		(36.13	)%		7.23	%		14.14	%		8.14	%††
Ratios to Average Net Assets:
Expenses before reimbursements/waivers		0.23	%		0.32	%		0.43	%		1.11	%		5.49	%†
Expenses net of reimbursements/waivers, if any		0.21	%		0.19	%		0.19	%		0.18	%		0.15	%†
Net investment income (loss) before reimbursements/waivers		2.05	%		0.92	%		1.61	%		0.90	%		(2.91	)%†
Net investment income net of reimbursements/waivers, if any		2.06	%		1.05	%		1.85	%		1.83	%		2.43	%†
Supplemental Data:
Net assets, end of year (000)	$	91,348		$	38,001		$	32,882		$	12,699		$	3,087
Portfolio turnover		4	%		11	%		47	%		24	%		35	%††

 

* Commencement of operations

†† Not annualized

† Annualized

See Notes to Financial Statements.

157

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS

1. Organization

The Vantagepoint Funds (the “Company”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and was organized as a Delaware statutory trust on July 28, 1998. The Company consisted of the following series on December 31, 2009:

The “Actively Managed Funds”:	The “Index Funds”:
Money Market Fund	Core Bond Index Fund
Low Duration Bond Fund	500 Stock Index Fund
Inflation Protected Securities Fund	Broad Market Index Fund
Asset Allocation Fund	Mid/Small Company Index Fund
Equity Income Fund	Overseas Equity Index Fund
Growth & Income Fund
Growth Fund
Select Value Fund
Aggressive Opportunities Fund
Discovery Fund
International Fund
Diversified Assets Fund (Renamed Diversifying Strategies Fund effective January 4, 2010)
The “Milestone Funds”:	The “Model Portfolio Funds”:
Milestone Retirement Income Fund	Model Portfolio Savings Oriented Fund
Milestone 2010 Fund	Model Portfolio Conservative Growth Fund
Milestone 2015 Fund	Model Portfolio Traditional Growth Fund
Milestone 2020 Fund	Model Portfolio Long-Term Growth Fund
Milestone 2025 Fund	Model Portfolio All-Equity Growth Fund
Milestone 2030 Fund
Milestone 2035 Fund
Milestone 2040 Fund

 

The Milestone Funds commenced operations on January 3, 2005. Each fund received $500,000 in exchange for shares purchased by the ICMA Retirement Corporation (“ICMA-RC”), the parent company of Vantagepoint Investment Advisers, LLC (“VIA” or the “Adviser”), the investment adviser to each series of the Company.

The Select Value, Discovery and Diversified Assets Funds commenced operations on October 30, 2007. Each fund received $100 in exchange for shares purchased by ICMA-RC, the parent company of VIA, the investment adviser to each series of the Company.

The Actively Managed, Model Portfolio and Milestone Funds each offer a single class of shares. The Index Funds offer two classes of shares: Class I Shares and Class II Shares. The two classes of shares differ principally in their respective level of account-based services and the fees associated with such services. Ordinary dividends to shareholders are allocated to each class, based upon shares outstanding on the record date of distribution. Neither class has preferential dividend rights. Differences in per share dividend rates are generally due to differences in separate class expenses.

On May 1, 2007, the Short-Term Bond Fund changed its name to the Low Duration Bond Fund as a result of a change in investment strategy wherein the Low Duration Bond Fund now seeks to maintain a maximum portfolio effective duration of three years. Also, effective May 1, 2007, the principal investment strategy of the Inflation Protected Securities Fund (then known as the US Government Securities Fund) was changed to provide that the fund invests, under normal circumstances, at least 80% of its net assets in inflation adjusted U.S. and non-U.S. fixed-income securities. In connection with this change in investment strategy, the name of the fund was changed to the Inflation Protected Securities Fund and the fund underwent a change in subadvisers.

158

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

The Model Portfolio Funds Structure

The Model Portfolio Funds invest entirely in other series of the Company (“underlying funds”). Subject to the supervision of the Company’s Board of Directors (“Board”), VIA may make allocation changes to the underlying funds based on its periodic analysis to identify the allocation of assets among the different underlying funds that it believes is optimum for each Model Portfolio Fund. Each Model Portfolio Fund has a different degree of potential risk and reward and is diversified among various underlying funds in differing allocations. The underlying funds of each Model Portfolio Fund and the investment allocation in each underlying fund as of December 31, 2009, were as follows:

	Model Portfolio Funds
Fund	Savings Oriented			Conservative Growth			Traditional Growth			Long-Term Growth			All-Equity Growth
Fixed Income—%
Low Duration Bond		43.00	%		23.00	%		8.00	%		0.00	%		0.00	%
Core Bond Index, Class I		13.00	%		20.50	%		18.00	%		15.00	%		0.00	%
Inflation Protected Securities		9.00	%		6.50	%		4.00	%		0.00	%		0.00	%
Total Fixed Income—%		65.00	%		50.00	%		30.00	%		15.00	%		0.00	%
Equity—%
Equity Income		10.00	%		11.00	%		12.00	%		13.00	%		18.00	%
Growth & Income		10.00	%		9.00	%		12.00	%		13.00	%		17.00	%
Growth		0.00	%		6.00	%		10.00	%		11.50	%		17.00	%
Select Value		0.00	%		3.00	%		5.50	%		8.50	%		9.50	%
Aggressive Opportunities		0.00	%		3.00	%		5.50	%		8.50	%		9.50	%
Discovery		0.00	%		0.00	%		3.00	%		4.50	%		9.00	%
International		5.00	%		8.00	%		12.00	%		16.00	%		20.00	%
Total Equity—%		25.00	%		40.00	%		60.00	%		75.00	%		100.00	%
Multi-Strategy—%
Diversified Assets		10.00	%		10.00	%		10.00	%		10.00	%		0.00	%
Total Multi-Strategy—%		10.00	%		10.00	%		10.00	%		10.00	%		0.00	%
Total—%		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

 

159

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

The Milestone Funds Structure

The Milestone Funds invest entirely in underlying funds. Subject to the supervision of the Board, VIA may make allocation changes to the underlying funds based on its periodic analysis to identify the allocation of assets among the different underlying funds that it believes is optimum for each Milestone Fund. Each fund invests in a combination of underlying funds that is believed to be appropriate given the time remaining until a Milestone Fund’s stated retirement date, except for the Milestone Retirement Fund, which is designed for investors who are very close or who at retirement. VIA adjusts the asset allocation of each “dated” Milestone Fund to become more conservative as the designated year approaches*. Each Milestone Fund has a different degree of potential risk and reward and is diversified among various underlying funds in differing allocations. The underlying funds of each Milestone Fund and the investment allocation in each underlying fund as of December 31, 2009, were as follows:

	Milestone Funds
Fund	Retirement Income			2010			2015			2020
Fixed Income—%
Low Duration Bond		40.00	%		36.50	%		20.00	%		9.00	%
Core Bond Index, Class I		11.00	%		11.00	%		12.80	%		19.35	%
Inflation Protected Securities		9.00	%		8.50	%		5.20	%		0.00	%
Total Fixed Income—%		60.00	%		56.00	%		38.00	%		28.35	%
Equity—%
Equity Income		12.00	%		13.00	%		17.80	%		21.30	%
Growth & Income		12.00	%		11.80	%		11.00	%		11.30	%
Growth		0.00	%		1.40	%		7.20	%		8.20	%
Mid/Small Company Index, Class I		0.00	%		1.00	%		5.60	%		8.50	%
International		6.00	%		6.80	%		10.40	%		12.35	%
Total Equity—%		30.00	%		34.00	%		52.00	%		61.65	%
Multi-Strategy—%
Diversified Assets		10.00	%		10.00	%		10.00	%		10.00	%
Total Multi-Strategy—%		10.00	%		10.00	%		10.00	%		10.00	%
Total—%		100.00	%		100.00	%		100.00	%		100.00	%

 

	Milestone Funds
Fund	2025			2030			2035			2040
Fixed Income—%
Low Duration Bond		4.00	%		0.00	%		0.00	%		0.00	%
Core Bond Index, Class I		16.10	%		13.15	%		11.40	%		10.00	%
Inflation Protected Securities		0.00	%		0.00	%		0.00	%		0.00	%
Total Fixed Income—%		20.10	%		13.15	%		11.40	%		10.00	%
Equity—%
Equity Income		22.80	%		24.20	%		25.20	%		26.00	%
Growth & Income		12.80	%		14.10	%		14.60	%		15.00	%
Growth		9.20	%		10.20	%		11.20	%		12.00	%
Mid/Small Company Index, Class I		11.00	%		13.60	%		16.60	%		19.00	%
International		14.10	%		15.75	%		17.00	%		18.00	%
Total Equity—%		69.90	%		77.85	%		84.60	%		90.00	%
Multi-Strategy—%
Diversified Assets		10.00	%		9.00	%		4.00	%		0.00	%
Total Multi-Strategy—%		10.00	%		9.00	%		4.00	%		0.00	%
Total—%		100.00	%		100.00	%		100.00	%		100.00	%

 

* Effective January 4, 2010, the Milestone Funds changed their principal investment strategies including changes to their asset class allocations and underlying funds allocation and ranges. Please see the prospectus dated January 4, 2010 for additional details.

160

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Since the Model Portfolio Funds and Milestone Funds invest entirely in underlying funds, investment earnings are composed of:

1.   ordinary and capital gain dividends from the underlying funds,

2.   unrealized appreciation/depreciation on investments in the underlying funds, and

3.   realized gain/loss from sales of the shares of the underlying funds triggered by net outflows associated with normal capital stock activity and rebalancing of the Model Portfolio Funds and Milestone Funds.

Subadviser Changes from December 31, 2008 to December 31, 2009

At a meeting held on December 12, 2008 (the “December 2008 Meeting”), VIA recommended and the Board approved, the appointment of Fiduciary Management, Inc. (“FMI”) to serve as a subadviser to the Growth & Income Fund, which became effective in January 2009. Also at the December 2008 Meeting, VIA recommended and the Board approved, the termination of Capital Guardian Trust Company (“Capital Guardian”) as subadviser to the Growth & Income Fund, which became effective on January 21, 2009.

Drake Capital Management, LLC (“Drake”) was terminated as a subadviser to the Diversified Assets Fund on April 10, 2009. At a meeting held on March 27, 2009, VIA recommended and the Board, approved an amendment to the existing subadvisory agreement among VIA, the Company and Payden & Rygel providing for Payden & Rygel to receive a fee for managing additional assets of the Diversified Assets Fund, on an interim basis, pursuant to a low duration global fixed income strategy. These assets were previously managed by Drake. The amendment became effective April 3, 2009.

At a meeting on September 25, 2009 (the “September Meeting”), VIA recommended and the Board, approved the termination of Capital Guardian Trust Company (“Capital Guardian”) as a subadviser to the International Fund. Also, at the September Meeting, VIA recommended and the Board, approved the appointment of Mondrian Investment Partners Limited (“Mondrian”) as a subadviser to the International Fund effective October 12, 2009. Also, at the September Meeting, VIA recommended and the Board, approved Payden & Rygel’s appointment to manage the Diversified Assets Fund’s low duration bond strategy on an ongoing basis and approved an amendment to the existing fee schedule with Payden & Rygel (the Board had previously appointed Payden & Rygel to manage this strategy on an interim basis at a meeting on March 27, 2009). Also at the September Meeting, VIA recommended and the Board, approved the appointment of Calamos Advisors, LLC and Shenkman Capital Management, Inc. to manage the convertible securities strategy of the Diversified Assets Fund effective January 4, 2010.

2. Significant Accounting Policies

The Company’s significant accounting policies are consistently applied in the preparation of its financial statements in accordance with accounting principles generally accepted in the United States of America. Management makes estimates and assumptions in the preparation of financial statements that affect the reported amounts of assets and liabilities, including the disclosure of contingent assets and liabilities at the date of the financial statements as well as the revenue and expense amounts during the reporting period. Actual results could differ from those estimates and those differences could be material. Certain prior year amounts have been reclassified to conform to the current year presentation.

FASB Financial Accounting Standards Codification

In June 2009, the Financial Accounting Standards Board (“FASB”) issued FASB ASC 105, The FASB Accounting Standards Codification^TM (“ASC”) and the Hierarchy of Generally Accepted Accounting Principles, (formerly FAS 168). FASB ASC 105 replaces the FAS 162, The Hierarchy of Generally Accepted Accounting Principles, and establishes the FASB Accounting Standards Codification (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by non-governmental entities in the preparation of financial statements in conformity with GAAP. The Codification became the exclusive authoritative reference at September 30, 2009. Updates to the Codification Standards are issued as Accounting Standard Updates (“ASU”s) by the FASB. The adoption of the Codification does not impact the Company’s financial statements except for references made to authoritative accounting literature in the accompanying notes to the financial statements.

Investment Policy and Security Valuation

The equity securities that are traded on a national securities exchange (other than Nasdaq Global/Global Select and Capital Market securities traded primarily on the Nasdaq Stock Market, Inc. exchange (“Nasdaq”)) held by each fund normally will be valued at the last reported sale price on the exchange on which the security is primarily traded. If,

161

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

on a particular day, an exchange-traded security does not trade on its primary exchange, then the price normally will be the mean between the closing bid and closing offer reported to the primary exchange and made available to quotation vendors or disseminated through an automated quotation system, or obtained by a pricing service from other quotation sources believed to be reliable. Nasdaq Global/Global Select and Capital Market securities traded primarily on Nasdaq will be valued at the Nasdaq Official Closing Price (“NOCP”). If, on any given day, no NOCP is available, the price normally will be the mean between the closing bid and closing offer reported on Nasdaq prior to the calculation of the NAV of a Fund. All equity securities not traded on a national securities exchange (“OTC Equities”) normally are valued at the last reported sale price in the over-the-counter market. If an OTC Equity does not trade in an over-the-counter market on a particular day, then the price normally will be the mean between the closing bid and closing offer obtained from a quotation service or other service believed to be reliable. Short-term debt instruments, such as commercial paper, banker’s acceptances, and U.S. Treasury Bills, with a remaining maturity of less than 60 days are valued at amortized cost. Prices for debt instruments normally will be obtained from a pricing service that may use methodologies designed to identify the market value of debt instruments, which may include reference to actual market transactions, broker-dealer supplied quotations or valuations, matrix pricing, or other valuation techniques. These techniques generally consider such factors as securities’ prices, yields, maturities, call features, ratings and developments relating to specific securities in arriving at valuations. In the event a pricing service is unable to provide a price for a particular security, the security may be priced based on the average of two or more independent broker-dealer quotations. Any security for which market value as described above is not readily available is valued at fair value as determined in good faith in accordance with policies approved by the Board (“Valuation Procedures”). The valuation of certain foreign equity securities is described later in the note.

Shares of the underlying funds in which the Model Portfolio and Milestone Funds invest are valued by using the underlying funds’ current net asset values (“NAVs”) for purchase and/or redemption orders that day.

The Money Market Fund invests substantially all of its assets in the Institutional Class of Short-Term Investments Trust Liquid Assets Portfolio (“Portfolio”) advised by Invesco Aim Advisors, Inc. The Portfolio uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the 1940 Act. The shares of the Portfolio are valued by the Money Market Fund using the Portfolio’s NAV for purchase or redemption orders placed that day.

On September 10, 2009, in accordance with applicable orders of the United States Bankruptcy Court for the Southern District of New York, the Vantagepoint Diversified Assets Fund filed claims, each in the amount of $54,298, against Lehman Brothers Special Financing Inc. (“LBSF”) and its parent company, Lehman Brothers Holdings, Inc. (“LBHI”). The claims arise out of certain derivatives transactions between the Diversified Assets Fund and LBSF that were guaranteed as to payment by LBHI. The derivatives transactions were terminated upon the bankruptcy filings of LBHI and LBSF and subsequently liquidated, resulting in claims. The timing and amount of distributions payable in connection with the claims (if any) is not presently known.

Valuation of Foreign Equity Securities

For foreign equity securities held by the funds and principally traded in markets outside North and South America, the Board approved the use of a third party fair valuation service. The service uses a multifactor model to calculate a factor that is then applied to adjust the market price for each such security. Additionally, the Board has approved the use of the fair value prices provided by this service on a daily basis without a market trigger or confidence interval filter for all foreign equity securities held by funds that are primarily traded in markets outside North and South America. In the event prices for such foreign securities are not available through the service or another fair value pricing service approved by the Board, the securities may be priced at the average of two or more independent broker-dealer quotations or at the fair value of the security in accordance with the Company’s Valuation Procedures.

ASC 820

The Company adopted Financial Accounting Standards Board’s Accounting Standards Codification^TM (“ASC”), Fair Value Measurements and Disclosures (“ASC 820”), (formerly known as FAS 157), effective January 1, 2008. In accordance with ASC 820, fair value is defined as the price that the fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. ASC 820 established a three-tier hierarchy, which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly

162

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

Level 1— quoted prices in active markets for identical investments

Level 2— other significant observable inputs (including quoted prices for similar investments in active markets, interest rates and yield curves, prepayment speeds, credit risks, etc.)

Level 3— significant unobservable inputs (including the fund’s own assumptions about the assumptions that market participants would use in determining the fair value of investments)

The valuation techniques used by the funds to measure fair value during the year ended December 31, 2009, maximized the use of observable inputs and minimized the use of unobservable inputs. The funds utilized fair value techniques such as multi-dimensional relational pricing model and option adjusted spread pricing to estimate prices that would have prevailed in a liquid market given information available at the time of evaluation.

The following is a summary of the inputs used as of December 31, 2009, in valuing each fund’s investment carried at value:

Investment Type	Level 1		Level 2		Level 3		Total
Low Duration Bond Fund
Investments in Securities:
Corporate Obligations	$	—	$	222,183,654	$	—	$	222,183,654
U.S. Government Agency Obligations		—		29,624,576		—		29,624,576
U.S. Government Agency Mortgage-Backed Securities		—		29,548,560		—		29,548,560
U.S. Treasury Obligations		—		25,662,021		—		25,662,021
Municipal Obligations		—		8,236,626		—		8,236,626
Sovereign Debt Obligations		—		5,502,691		—		5,502,691
Asset Backed Securities		—		85,762,932		—		85,762,932
Non-Government Mortgage-Backed Securities		—		10,453,055		—		10,453,055
Non-U.S. Government Agency Obligations		—		7,194,538		—		7,194,538
Cash Equivalents		134,520,370		—		—		134,520,370
Total Investments in Securities	$	134,520,370	$	424,168,653	$	—	$	558,689,023
Derivative Instruments:
Assets
Futures		127,803		—		—		127,803
Forward Currency Contracts		—		244,664		—		244,664
Total Assets	$	127,803	$	244,664	$	—	$	372,467
Total Derivative Instruments	$	127,803	$	244,664	$	—	$	372,467

 

163

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Investment Type	Level 1			Level 2			Level 3		Total
Inflation Protected Securities Fund
Investments in Securities:
Corporate Obligations	$	—		$	2,635,694		$	—	$	2,635,694
U.S. Government Agency Obligations		—			12,103,531			—		12,103,531
U.S. Treasury Obligations		—			307,666,284			—		307,666,284
Sovereign Debt Obligations		—			533,871			—		533,871
Cash Equivalents		66,519,801			—			—		66,519,801
Total Investments in Securities	$	66,519,801		$	322,939,380		$	—	$	389,459,181
Derivative Instruments:
Assets
Futures		32,326			—			—		32,326
Forward Currency Contracts		—			79,451			—		79,451
Written Options		—			91,492			—		91,492
Swap Agreements		—			112,296			—		112,296
Total Assets	$	32,326		$	283,239		$	—	$	315,565
Liabilities:
Futures		(60,430	)		—			—		(60,430	)
Forward Currency Contracts		—			(16,720	)		—		(16,720	)
Written Options		—			(184,310	)		—		(184,310	)
Total Liabilities		(60,430	)		(201,030	)		—		(261,460	)
Total Derivative Instruments	$	(28,104	)	$	82,209		$	—	$	54,105
Asset Allocation Fund
Investments in Securities:
Common Stocks	$	279,116,497		$	—		$	—	$	279,116,497
U.S. Treasury Obligations		—			94,717,292			—		94,717,292
Commercial Paper		—			49,583,927			—		49,583,927
Cash Equivalents		62,594,598			—			—		62,594,598
Total Investments in Securities	$	341,711,095		$	144,301,219		$	—	$	486,012,314
Derivative Instruments:
Assets
Futures		494,208			—			—		494,208
Total Assets	$	494,208		$	—		$	—	$	494,208
Liabilities:
Futures		(1,787,808	)		—			—		(1,787,808	)
Total Liabilities		(1,787,808	)		—			—		(1,787,808	)
Total Derivative Instruments	$	(1,293,600	)	$	—		$	—	$	(1,293,600	)

164

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Investment Type	Level 1		Level 2		Level 3		Total
Equity Income Fund
Investments in Securities:
Common Stocks	$	1,383,418,125	$	3,354,846	$	—	$	1,386,772,971
Convertible Debt Obligations		—		2,676,960		—		2,676,960
Cash Equivalents		310,604,691		—		—		310,604,691
Total Investments in Securities	$	1,694,022,816	$	6,031,806	$	—	$	1,700,054,622
Growth & Income Fund
Investments in Securities:
Common Stocks	$	983,898,255	$	5,106,384	$	—	$	989,004,639
Convertible Preferred Stocks		—		3,912,024		—		3,912,024
Cash Equivalents		111,173,942		—		—		111,173,942
Total Investments in Securities	$	1,095,072,197	$	9,018,408	$	—	$	1,104,090,605
Growth Fund
Investments in Securities:
Common Stocks	$	1,764,952,445	$	—	$	—	$	1,764,952,445
Cash Equivalents		248,117,256		—		—		248,117,256
Total Investments in Securities	$	2,013,069,701	$	—	$	—	$	2,013,069,701
Select Value Fund
Investments in Securities:
Common Stocks	$	274,841,972	$	—	$	—	$	274,841,972
Cash Equivalents		56,729,100		—		—		56,729,100
Total Investments in Securities	$	331,571,072	$	—	$	—	$	331,571,072
Aggressive Opportunities Fund
Investments in Securities:
Common Stocks	$	937,718,705	$	16,521,568	$	—	$	954,240,273
Warrants		173,727		—		—		173,727
Cash Equivalents		297,399,519		—		—		297,399,519
Total Investments in Securities	$	1,235,291,951	$	16,521,568	$	—	$	1,251,813,519

165

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Investment Type	Level 1		Level 2		Level 3		Total
Discovery Fund
Investments in Securities:
Common Stocks	$	78,898,665	$	601,255	$	—	$	79,499,920
Convertible Preferred Stocks		—		1,033,905		—		1,033,905
Warrants		69,317		—		—		69,317
Corporate Obligations		—		32,590,310		—		32,590,310
U.S. Government Agency Obligations		—		21,231,901		—		21,231,901
U.S. Government Agency Mortgage-Backed Securities		—		8,702,588		—		8,702,588
U.S. Treasury Obligations		—		11,990,199		—		11,990,199
Municipal Obligations		—		1,277,231		—		1,277,231
Sovereign Debt Obligations		—		411,414		—		411,414
Asset Backed Securities		—		5,517,081		—		5,517,081
Non-Government Mortgage-Backed Securities		—		2,263,733		—		2,263,733
Non-U.S. Government Agency Obligations		—		908,967		—		908,967
Commercial Paper		—		799,912		—		799,912
Cash Equivalents		38,192,031		—		—		38,192,031
Total Investments in Securities	$	117,160,013	$	87,328,496	$	—	$	204,488,509
Derivative Instruments:
Assets
Futures		2,934,446		—		—		2,934,446
Forward Currency Contracts		—		22,262		—		22,262
Total Assets	$	2,934,446	$	22,262	$	—	$	2,956,708
Total Derivative Instruments	$	2,934,446	$	22,262	$	—	$	2,956,708
International Fund
Investments in Securities:
Common Stocks	$	83,827,150	$	897,145,025	$	—	$	980,972,175
Preferred Stocks		—		1,280,052		—		1,280,052
Cash Equivalents		101,025,566		—		—		101,025,566
Total Investments in Securities	$	184,852,716	$	898,425,077	$	—	$	1,083,277,793

166

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Investment Type	Level 1			Level 2			Level 3		Total
Diversified Assets Fund
Investments in Securities:
Corporate Obligations	$	—		$	166,097,712		$	—	$	166,097,712
U.S. Government Agency Obligations		—			89,411,110			—		89,411,110
U.S. Government Agency Mortgage-Backed Securities		—			16,686,230			—		16,686,230
U.S. Treasury Obligations		—			62,203,146			—		62,203,146
Municipal Obligations		—			9,500,378			—		9,500,378
Sovereign Debt Obligations		—			8,559,496			—		8,559,496
Asset Backed Securities		—			31,449,515			—		31,449,515
Non-Government Mortgage-Backed Securities		—			2,592,344			—		2,592,344
Non-U.S. Government Agency Obligations		—			2,454,350			—		2,454,350
Certificates of Deposit		—			6,759,143			—		6,759,143
Commercial Paper		—			2,199,441			—		2,199,441
Cash Equivalents		51,214,149			—			—		51,214,149
Total Investments in Securities	$	51,214,149		$	397,912,865		$	—	$	449,127,014
Derivative Instruments:
Assets
Futures		1,267,112			—			—		1,267,112
Forward Currency Contracts		—			1,064,738			—		1,064,738
Purchased Options		2,393,316			—			—		2,393,316
Total Assets	$	3,660,428		$	1,064,738		$	—	$	4,725,166
Liabilities:
Futures		(2,017,894	)		—			—		(2,017,894	)
Forward Currency Contracts		—			(2,109,370	)		—		(2,109,370	)
Total Liabilities		(2,017,894	)		(2,109,370	)		—		(4,127,264	)
Total Derivative Instruments	$	1,642,534		$	(1,044,632	)	$	—	$	597,902

167

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Investment Type	Level 1		Level 2		Level 3		Total
Core Bond Index Fund
Investments in Securities:
Corporate Obligations	$	—	$	211,806,196	$	—	$	211,806,196
U.S. Government Agency Obligations		—		90,903,478		—		90,903,478
U.S. Government Agency Mortgage-Backed Securities		—		401,523,759		—		401,523,759
U.S. Treasury Obligations		—		314,181,190		—		314,181,190
Municipal Obligations		—		2,553,646		—		2,553,646
Sovereign Debt Obligations		—		16,251,582		—		16,251,582
Asset Backed Securities		—		3,627,371		—		3,627,371
Non-Government Mortgage-Backed Securities		—		29,216,398		—		29,216,398
Non-U.S. Government Agency Obligations		—		13,300,591		—		13,300,591
Cash Equivalents		279,775,475		—		—		279,775,475
Total Investments in Securities	$	279,775,475	$	1,083,364,211	$	—	$	1,363,139,686
500 Stock Index Fund
Investments in Securities:
Common Stocks	$	316,727,745	$	—	$	—	$	316,727,745
U.S. Treasury Obligations		—		459,971		—		459,971
Cash Equivalents		36,450,753		—		—		36,450,753
Total Investments in Securities	$	353,178,498	$	459,971	$	—	$	353,638,469
Derivative Instruments:
Assets
Futures		35,558		—		—		35,558
Total Assets	$	35,558	$	—	$	—	$	35,558
Total Derivative Instruments	$	35,558	$	—	$	—	$	35,558
Broad Market Index Fund
Investments in Securities:
Common Stocks	$	472,808,703	$	3,169	$	—	$	472,811,872
Rights		509		—		—		509
Warrants		—		—		—		—
U.S. Treasury Obligations		—		389,975		—		389,975
Cash Equivalents		59,453,972		—		—		59,453,972
Total Investments in Securities	$	532,263,184	$	393,144	$	—	$	532,656,328
Derivative Instruments:
Assets
Futures		84,442		—		—		84,442
Total Assets	$	84,442	$	—	$	—	$	84,442
Total Derivative Instruments	$	84,442	$	—	$	—	$	84,442

168

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Investment Type	Level 1		Level 2			Level 3		Total
Mid/Small Company Index Fund
Investments in Securities:
Common Stocks	$	225,405,017	$	7,072		$	—	$	225,412,089
Rights		4,301		76			—		4,377
Warrants		—		—			—		—
U.S. Treasury Obligations		—		454,971			—		454,971
Cash Equivalents		65,146,103		—			—		65,146,103
Total Investments in Securities	$	290,555,421	$	462,119		$	—	$	291,017,540
Derivative Instruments:
Assets
Futures		143,075		—			—		143,075
Total Assets	$	143,075	$	—		$	—	$	143,075
Total Derivative Instruments	$	143,075	$	—		$	—	$	143,075
Overseas Equity Index Fund
Investments in Securities:
Common Stocks	$	—	$	177,985,986		$	—	$	177,985,986
Preferred Stocks		—		630,721			—		630,721
Rights		—		—			—		—
Warrants		—		1,551			—		1,551
U.S. Treasury Obligations		—		164,990			—		164,990
Cash Equivalents		14,649,806		—			—		14,649,806
Total Investments in Securities	$	14,649,806	$	178,783,248		$	—	$	193,433,054
Derivative Instruments:
Assets
Futures		34,562		—			—		34,562
Forward Currency Contracts		—		139,056			—		139,056
Total Assets	$	34,562	$	139,056		$	—	$	173,618
Liabilities:
Forward Currency Contracts		—		(293,395	)		—		(293,395	)
Total Liabilities		—		(293,395	)		—		(293,395	)
Total Derivative Instruments	$	34,562	$	(154,339	)	$	—	$	(119,777	)

 

All investments in the Money Market Fund, Model Portfolios, and Milestone Funds are categorized as Level 1.

As of December 31, 2009, the funds did not hold any investment with significant unobservable inputs (Level 3).

When Issued Securities

When issued securities or “To Be Announced” securities are sometimes held by the funds. The funds maintain security positions and cash positions such that sufficient liquid assets will be available to make payments for such securities purchased.

Foreign Currency

The accounting records of the funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in foreign currencies are translated (but not actually converted) into U.S. dollars daily at the closing spot rates supplied by the WM/Reuters Intraday Spot exchange rates provided as of 4:00 pm Eastern Time. Purchases and sales of securities, income receipts and expense payments are translated (but not actually converted) into U.S. dollars

169

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

at the prevailing exchange rate on the respective dates of such transactions. Unrealized gains and losses, not relating to securities, that result from changes in foreign currency exchange rates, have been included in unrealized appreciation/(depreciation) of securities. Net realized foreign currency gains and losses include foreign currency gains and losses resulting from changes in exchange rates between trade date and settlement date on investment securities transactions, gains and losses on foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of the funds and the amounts actually received. The portion of foreign currency gains and losses related to fluctuations in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gains/(losses) from security transactions.

Currency symbols utilized throughout the notes to the financial statements are defined as follows:

AUD— Australian Dollar	JPY— Japanese Yen
BRL— Brazilian Real	NOK— Norwegian Krona
CAD— Canadian Dollar	NZD— New Zealand Dollar
CHF— Swiss Franc	SEK— Swedish Krona
EUR— European Monetary Unit	USD— U.S. Dollar
GBP— British Pound

 

Options (other than Swaptions)

Exchange traded options normally will be priced based on the last reported sale price or official closing price (if available) on the exchange on which the option is primarily traded. Certain markets are not closed at valuation time. In these situations, a pricing service may provide snapshot prices. If no sales are reported on a particular day, a pricing service normally will use the mean between the last bid and asked quotations. Non-exchange traded options normally will be priced using an option valuation model and will be provided by a pricing service.

Futures

Futures contracts normally will be priced at their settlement prices established and reported each day on the exchange on which they are traded, as provided by a pricing service.

Futures exchange abbreviations utilized throughout the notes to the financial statements are defined as follows:

CBT— Chicago Board of Trade Exchange	MIL— Borsa Italiana Exchange
CME— Chicago Mercantile Exchange	MSE— Montreal Exchange
EOE— Dutch Options Exchange	NYF— New York Futures Exchange
EOP— Euronext Paris Exchange	SFE— Sydney Futures Exchange
EUX— Eurex Deutschland Exchange	SGX— Singapore Exchange
HKG— Hong Kong Futures Exchange	SSE— Stockholm Stock Exchange
LIF— Liffe Exchange	TSE— Tokyo Stock Exchange
MFM— Meff Renta Variable Exchange

 

Forward Currency Contracts

These contracts normally will be priced using the WM/Reuters Intraday Forwards rates provided as of 4:00 pm Eastern Time.

Interest Rate Swaps and Inflation Swaps

Interest rate and inflation swaps normally will be priced based on the applicable swap valuation model (i.e. interest rate or inflation) which incorporates a snapshot of the relevant swap curve (interest rate curve or inflation rate curve, as applicable). In the event a pricing service is unable to provide a price for a particular swap, the swap will be priced at its fair value in accordance with the Valuation Procedures.

Interest Rate Swaptions

Interest rate swaptions normally will be priced based on a snapshot taken of the relevant swap curve, deriving an implied volatility surface from actual and/or indicative broker-dealer swaption prices, and combining them in a swaption valuation model. In the event a pricing service is unable to provide a price for a particular swaption, the swaption will be priced at its fair value in accordance with the Valuation Procedures.

170

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Total Return Swaps

Total return swaps are normally priced based on a valuation model that incorporates cash flow forecasts for the reference asset and a snapshot of the relevant interest rate swap curve. Such prices will be provided by a pricing service. In the event a pricing service is unable to provide a price for a particular total return swap, the total return swap will be priced at its fair value in accordance with the Valuation Procedures.

Security Transactions and Income Recognition

Security transactions are accounted for on the date the securities are purchased or sold (trade date). Dividend income is recognized on the ex-dividend date and interest income is accrued daily. Realized gains or losses are reported on the basis of identified cost of securities delivered. Bond discounts and premiums are amortized for both financial reporting and tax purposes, except for the Core Bond Index Fund, which does not amortize bond premium for tax purposes.

Reclassification of Financial Information—Low Duration Bond Fund

As a result of a revision to the year ended December 31, 2008, amortized premium and discount on debt securities, certain amounts for the fiscal year ended December 31, 2008 have been restated. The impact to net investment income was an increase of $1,609,713 with a corresponding decrease to realized gain and increase to unrealized depreciation of $136,204 and $1,473,509, respectively. The revision has no impact on the net assets and is not material to the financial statements taken as a whole.

Dividends and Distributions to Shareholders

Dividends received from mutual fund investments are reflected as dividend income; capital gain distributions are reflected as realized gain/loss. Dividends from net investment income, if any, are declared and paid monthly to shareholders of the Core Bond Index, Low Duration Bond, and Inflation Protected Securities Funds. Dividends from net investment income, if any, are declared daily and paid monthly to shareholders of the Money Market Fund. For the remaining funds, dividends from net investment income, if any, are declared and paid annually to shareholders. Distributions from any net realized capital gains, if any, are generally declared and paid annually to shareholders. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments of income and gains on investment securities, and differing characterizations of distributions being made by each fund.

Certain differences are permanent, and result in reclassifications among paid-in capital, net investment income or realized gains. These include net operating losses not utilized during the current year, commission adjustments, pay-down gains and losses, bond premium amortization, foreign currency gains and losses, treasury inflation-protected securities adjustments, taxable over-distributions or returns of capital, and adjustments relating to income received from, or dispositions of, real estate investment trust, passive foreign investment company, publicly traded partnership, and mutual fund company securities. The following reclassifications were made in the financial statements to present the components of fund net assets and distributions on a tax basis for the year ended December 31, 2009. These reclassifications have no effect on net assets or net asset values per share, and they do not affect the net investment income per share calculations presented in the Financial Highlights.

Fund	Paid-in Capital Increase/(Decrease)			Undistributed Net Investment Income Increase/(Decrease)			Accumulated Net Realized Gain/(Loss) Increase/(Decrease)
Low Duration Bond	$	—		$	(899,177	)	$	899,177
Inflation Protected Securities		—			489,338			(489,338	)
Asset Allocation		543			(357,711	)		357,168
Equity Income		1			(616,666	)		616,665
Growth & Income		—			(3,904	)		3,904
Growth		(32,952	)		265,327			(232,375	)
Select Value		(110,733	)		(1,182,281	)		1,293,014
Aggressive Opportunities		(294,066	)		(818,495	)		1,112,561

171

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Fund	Paid-in Capital Increase/(Decrease)			Undistributed Net Investment Income Increase/(Decrease)			Accumulated Net Realized Gain/(Loss) Increase/(Decrease)
Discovery	$	(51,453	)	$	(321,502	)	$	372,955
International		(10,637	)		2,585,624			(2,574,987	)
Diversified Assets		—			2,366,462			(2,366,462	)
Core Bond Index		(71,898	)		5,900,124			(5,828,226	)
500 Stock Index		18,103,366			(209,510	)		(17,893,856	)
Broad Market Index		4,086,920			(610,654	)		(3,476,266	)
Mid/Small Company Index		1,776,790			(131,469	)		(1,645,321	)
Overseas Equity Index		1,112,207			431,900			(1,544,107	)
Model Portfolio Savings Oriented		—			(35,330	)		35,330
Model Portfolio Conservative Growth		—			(80,482	)		80,482
Model Portfolio Traditional Growth		—			(178,492	)		178,492
Model Portfolio Long-Term Growth		—			(58,081	)		58,081
Model Portfolio All-Equity Growth		—			(23,814	)		23,814
Milestone Retirement Income		—			(14,197	)		14,197
Milestone 2010		—			(17,887	)		17,887
Milestone 2015		—			(16,440	)		16,440
Milestone 2020		—			(3,081	)		3,081
Milestone 2025		(1,196	)		(682	)		1,878
Milestone 2030		(736	)		(969	)		1,705
Milestone 2035		(119	)		(826	)		945
Milestone 2040		(829	)		36			793

 

Federal Income Taxes

Each fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code for federal tax purposes. Accordingly, each fund intends to make distributions of substantially all of its net investment company taxable income and any net realized capital gains (after reduction for capital loss carry forwards) sufficient to relieve it from all, or substantially all, federal income and excise taxes. Any taxable income or gains remaining at fiscal year-end are distributed in the following year. Therefore, no provision for federal income or excise taxes was required.

The Financial Accounting Standards Board issued Interpretation ASC 740 (formerly known as “FIN 48”), “Income Taxes,” which establishes guidelines for recognizing, measuring, and disclosing tax return positions in financial statements. Management has evaluated the Company’s tax positions and determined that the application of ASC 740 had no material impact on the Company’s financial statements. Accordingly, no adjustments for unrecognized tax benefits or related interest or penalties were required as of December 31, 2009. If applicable, the Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in “Other Expenses” in the Statement of Operations. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease in the next twelve months. Each of the tax years in the four year period ending December 31, 2009 remains subject to examination by taxing authorities.

At December 31, 2009, the components of distributable earnings on a tax basis were as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Gains		Total Distributable Earnings
Low Duration Bond	$	134,813	$	—	$	134,813
Inflation Protected Securities		118,975		—		118,975
Asset Allocation		1,428,535		—		1,428,535
Equity Income		17,872,857		—		17,872,857
Growth & Income		3,181,205		—		3,181,205
Growth		490,902		—		490,902
International		14,111,892		—		14,111,892
Diversified Assets		2,823,013		—		2,823,013

172

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Fund	Undistributed Ordinary Income		Undistributed Long-Term Gains		Total Distributable Earnings
500 Stock Index	$	107,139	$	—	$	107,139
Broad Market Index		5,213,300		—		5,213,300
Mid/Small Company Index		1,806,344		—		1,806,344
Overseas Equity Index		184,429		—		184,429
Model Portfolio Savings Oriented		513,500		—		513,500
Model Portfolio Conservative Growth		1,229,673		—		1,229,673
Model Portfolio Traditional Growth		6,245,449		—		6,245,449
Model Portfolio Long-Term Growth		7,275,975		—		7,275,975
Model Portfolio All-Equity Growth		1,091,762		—		1,091,762
Milestone Retirement Income		177,046		—		177,046
Milestone 2010		398,746		—		398,746
Milestone 2015		1,002,663		—		1,002,663
Milestone 2020		77,861		—		77,861

 

The tax character of distributions paid during 2009 was as follows:

Fund	Distributions Paid from Ordinary Income		Distributions Paid from Long-Term Capital Gains		Returns of Capital		Total Distributions
Money Market	$	749,334	$	—	$	—	$	749,334
Low Duration Bond		13,619,201		—		—		13,619,201
Inflation Protected Securities		3,796,019		—		—		3,796,019
Asset Allocation		6,232,625		—		—		6,232,625
Equity Income		25,286,784		—		—		25,286,784
Growth & Income		11,876,196		—		—		11,876,196
Growth		9,946,245		—		—		9,946,245
Select Value		2,291,563		—		—		2,291,563
Aggressive Opportunities		2,051,261		—		—		2,051,261
Discovery		1,533,607		—		—		1,533,607
International		18,665,287		—		—		18,665,287
Diversified Assets		2,104,166		—		—		2,104,166
Core Bond Index		45,263,235		—		—		45,263,235
500 Stock Index		6,624,175		—		—		6,624,175
Broad Market Index		8,412,133		—		—		8,412,133
Mid/Small Company Index		2,719,710		—		—		2,719,710
Overseas Equity Index		4,518,504		—		—		4,518,504
Model Portfolio Savings Oriented		6,178,805		89,456		—		6,268,261
Model Portfolio Conservative Growth		10,102,929		—		—		10,102,929
Model Portfolio Traditional Growth		19,944,289		989,933		—		20,934,222
Model Portfolio Long-Term Growth		17,548,530		7,065,993		—		24,614,523
Model Portfolio All-Equity Growth		4,890,721		4,261,652		—		9,152,373
Milestone Retirement Income		1,194,129		68,883		—		1,263,012
Milestone 2010		1,254,740		362,908		—		1,617,648
Milestone 2015		2,039,306		1,178,592		—		3,217,898
Milestone 2020		3,020,640		1,486,573		—		4,507,213
Milestone 2025		2,222,049		1,239,920		—		3,461,969
Milestone 2030		1,712,689		1,159,773		—		2,872,462
Milestone 2035		1,050,895		732,331		—		1,783,226
Milestone 2040		1,260,704		792,731		—		2,053,435

 

173

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2009, the following funds had net capital loss carryovers:

	Expiring December 31
Fund	2010		2011		2012		2013
Low Duration Bond	$	—	$	—	$	—	$	2,517,298
Inflation Protected Securities		—		—		—		—
Asset Allocation		—		—		—		—
Equity Income		—		—		—		—
Growth & Income		—		—		—		—
Growth		125,817,886		82,974,331		—		—
Select Value		—		—		—		—
Aggressive Opportunities		—		—		—		—
Discovery		—		—		—		—
International		—		—		—		—
Diversified Assets		—		—		—		—
Core Bond Index		—		—		—		4,825,601
500 Stock Index		8,310,436		3,056,924		—		—
Broad Market Index		7,397,404		7,434,496		—		—
Overseas Equity Index		—		—		—		—
Model Portfolio Savings Oriented		—		—		—		—
Model Portfolio Conservative Growth		—		—		—		—
Model Portfolio Traditional Growth		—		—		—		—
Model Portfolio Long-Term Growth		—		—		—		—
Model Portfolio All-Equity Growth		—		—		—		—
Milestone Retirement Income		—		—		—		—
Milestone 2010		—		—		—		—
Milestone 2015		—		—		—		—
Milestone 2020		—		—		—		—

 

	Expiring December 31
Fund	2014		2015		2016		2017
Low Duration Bond	$	3,180,132	$	261,945	$	—	$	5,317,652
Inflation Protected Securities		422,040		48,256		1,913,837		—
Asset Allocation		—		—		53,747,955		16,049,109
Equity Income		—		—		78,459,730		44,412,591
Growth & Income		—		—		75,418,372		120,473,836
Growth		—		—		218,570,902		314,413,233
Select Value		—		—		35,743,246		37,613,177
Aggressive Opportunities		—		—		45,967,040		101,968,528
Discovery		—		—		32,801,107		16,410,988
International		—		—		36,965,418		150,182,044
Diversified Assets		—		—		5,949,499		—
Core Bond Index		8,705,385		4,299,528		2,798,291		4,404,280
500 Stock Index		—		—		7,028,727		1,183,403
Broad Market Index		—		—		265,032		—
Overseas Equity Index		—		—		—		3,000,588
Model Portfolio Savings Oriented		—		—		—		2,061,533
Model Portfolio Conservative Growth		—		—		19,410		6,632,356
Model Portfolio Traditional Growth		—		—		—		17,709,713
Model Portfolio Long-Term Growth		—		—		—		7,029,301
Model Portfolio All-Equity Growth		—		—		—		1,085,637
Milestone Retirement Income		—		—		—		224,204
Milestone 2010		—		—		—		2,710,996
Milestone 2015		—		—		—		1,002,314
Milestone 2020		—		—		—		79,247

 

174

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

At December 31, 2009, the following funds elected to defer post-October net capital losses and currency losses of:

Fund	Capital Losses		Currency Losses
Inflation Protected Securities	$	—	$	102,877
Growth & Income		3,038,127		—
Growth		6,578,549		—
Select Value		2,161,000		—
Discovery		—		1,788
International		3,094,439		—
Diversified Assets		1,946,551		71,859
500 Stock Index		160,206		—
Overseas Equity Index		—		200,738
Model Portfolio Savings Oriented		78,014		—
Milestone 2010		231,730		—
Milestone 2015		4,523		—
Milestone 2020		3,122		—
Milestone 2025		11,755		—
Milestone 2030		165,837		—
Milestone 2035		4,518		—
Milestone 2040		25,678		—

 

3. Investments in Derivative Instruments

Some of the funds use derivative instruments in pursuing their investment objectives. The following discussion provides more detailed information about each type of derivative instrument held by the funds during or as of the end of the reporting period.

Futures Contracts

A futures contract is an agreement between two parties to buy and sell a security, commodity, or index at a set price on a future date.

A fund may enter into futures contracts for purposes of seeking to protect portfolio value against the risk of decline (overall price risk) or seeking to increase portfolio value. Use of derivatives to seek increased portfolio value increases the funds exposure to the risk of loss due to adverse market changes.

Certain funds may enter into futures contracts to seek to manage or “hedge” against certain investment risks to which a fund may be exposed from time to time in pursuing its investment objectives. These risks may include, for example, interest rate risk (which is the risk that interest rates will rise, causing bond prices to fall) or stock market risk (which is the risk that stock prices overall will decline over short or extended periods). Some funds also may use futures contracts to obtain investment exposure to an asset or asset class without purchasing or selling those assets directly.

Funds that may use futures contracts to seek to manage interest rate risk include: the Low Duration Bond Fund, Inflation Protected Securities Fund, Asset Allocation Fund, Discovery Fund, Diversified Assets Fund, and Core Bond Index Fund. Funds that may use futures contracts to seek to manage stock market risks include: Asset Allocation Fund, Equity Income Fund, Growth & Income Fund, Growth Fund, Select Value Fund, Aggressive Opportunities Fund, Discovery Fund, International Fund, Diversified Assets Fund, 500 Stock Index Fund, Broad Market Index Fund, Mid/Small Company Index Fund, and Overseas Equity Index Fund. Funds that may use futures contracts to obtain investment exposure to a certain asset or asset class include: the Asset Allocation Fund, Discovery Fund, Diversified Asset Fund, Low Duration Bond Fund, Inflation Protected Securities Fund, 500 Stock Index Fund, Broad Market Index Fund, Mid/Small Company Index Fund and Overseas Equity Index Fund. Certain funds also may be permitted (but are not required) to use futures contracts for other purposes, as described in the prospectus and statement of additional information, but any such uses generally would not be as common as the uses described above. No fund is required to use futures contracts for any or all of the uses described herein.

A fund may enter into futures contracts based on an equity index in order to increase or to decrease its exposure to changes in equity market conditions, including the risk of market value decreases (equity price risk) or the risk of not participating in equity market increases (risk of missing opportunities for gains).

175

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

A fund may enter into futures contracts based on a bond index or a specific underlying fixed income security to increase or decrease its exposure to changes in bond market conditions or to changes in the market value of the specific underlying security, including the risk of market value decreases (price risk, interest rate risk, credit risk) or the risk of not participating in market increases (risk of missing opportunities for gains).

Pursuant to the contract, upon entering the contract the fund agrees to deposit an amount equal to a certain percentage of the contract value (initial margin). The fund agrees to subsequently receive from or pay an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as “variation margin” and are recorded by the fund as unrealized gains or losses. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Realized gains and losses are a component of net realized gain (loss) on futures contracts in the Statements of Operations.

Risks of entering into futures contracts include the possibility that there may be an illiquid market for the contract and that a change in the value of the contracts may not correlate with the changes in the value of the underlying securities. The amount of risk associated with a futures contract may significantly exceed the amount(s) reflected in the financial statements.

During the year ended December 31, 2009, the following funds purchased or sold futures contracts: Low Duration Bond Fund, Inflation Protected Securities Fund, Asset Allocation Fund, Discovery Fund, Diversified Assets Fund, 500 Stock Index Fund, Broad Market Index Fund, Mid/Small Company Index Fund, and Overseas Equity Index Fund.

As of December 31, 2009, the following funds had open futures contracts outstanding:

Low Duration Bond Fund

Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation
Sold
23	CBT	U.S. 10 Year Treasury Note	March 2010	$	2,655,422	$	66,761
19	CBT	U.S. 2 Year Treasury Note	March 2010		4,109,047		16,854
26	CBT	U.S. 5 Year Treasury Note	March 2010		2,973,953		44,188
						$	127,803

 

Inflation Protected Securities Fund

Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation/ (Depreciation)
Purchased
8	CBT	U.S. 10 Year Treasury Note	March 2010	$	923,625	$	(2,394	)
39	CBT	U.S. 5 Year Treasury Note	March 2010		4,460,930		(58,036	)
						$	(60,430	)
Sold
11	CBT	U.S. 30 Year Treasury Bond	March 2010	$	1,269,125	$	32,326
						$	(28,104	)

 

176

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Asset Allocation Fund

Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation/ (Depreciation)
Purchased
128	CME	S&P 500 Index	March 2010	$	35,542,400	$	484,402
324	CBT	U.S. 30 Year Treasury Bond	March 2010		37,381,500		(1,787,808	)
						$	(1,303,406	)
Sold
29	CME	E-MINI S&P 500 Index	March 2010	$	1,610,515	$	9,806
						$	(1,293,600	)

 

Discovery Fund

Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation
Purchased
1,388	NYF	E-MINI Russell 2000 Index	March 2010	$	86,597,320	$	2,927,648
Sold
4	CBT	U.S. 5 Year Treasury Note	March 2010	$	457,531		6,798
						$	2,934,446

 

Diversified Assets Fund

Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation/ (Depreciation)
Purchased
4	EOE	Amsterdam Index	January 2010	$	384,765	$	11,924
120	SFE	Australian Government 10 Year Bond	March 2010		10,973,590		(148,753	)
190	EOP	CAC 40 Index	January 2010		10,735,641		256,875
45	MSE	Canadian Government 10 Year Bond	March 2010		5,070,326		(78,471	)
8	EUX	DAX Index	March 2010		1,708,648		18,693
125	CME	E-MINI S&P 500 Index	March 2010		6,941,875		(19,562	)
180	LIF	FTSE 100 Index	March 2010		15,587,811		292,072
6	MIL	FTSE/MIB Index	March 2010		1,001,320		19,713
100	MFM	IBEX 35 Index	January 2010		17,093,650		424,985
1,026	SSE	OMX Stockholm 30 Index	January 2010		13,659,159		(95,334	)
4	MSE	S&P/TSX 60 Index	March 2010		528,412		13,458
24	SFE	SPI 200 Index	March 2010		2,629,537		141,419
1	CBT	U.S. 10 Year Treasury Note	March 2010		115,453		(2,148	)
72	LIF	UK Gilt Long Bond	March 2010		13,309,894		(293,830	)
						$	541,041

 

177

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Diversified Assets Fund (continued)

Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation/ (Depreciation)
Sold
336	SGX	10 Year Mini-JGB	March 2010	$	50,409,921	$	(124,502	)
15	EOE	Amsterdam Index	January 2010		1,442,868		(52,728	)
248	EOP	CAC 40 Index	January 2010		14,012,836		(412,495	)
23	EUX	DAX Index	March 2010		4,912,364		(135,734	)
129	CME	E-MINI S&P 500 Index	March 2010		7,164,015		(91,478	)
35	MIL	FTSE/MIB Index	March 2010		5,841,035		(142,730	)
20	HKG	Hang Seng Index	January 2010		2,827,792		(88,870	)
18	SFE	SPI 200 Index	March 2010		1,972,153		(90,859	)
207	TSE	TOPIX Index	March 2010		20,103,237		(240,400	)
5	CBT	U.S. 10 Year Treasury Note	March 2010		577,266		14,379
44	CBT	U.S. 5 Year Treasury Note	March 2010		5,032,844		73,594
						$	(1,291,823	)
						$	(750,782	)
500 Stock Index Fund
Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation
Purchased
118	CME	E-MINI S&P 500 Index	March 2010	$	6,553,130	$	35,558
						$	35,558
Broad Market Index Fund
Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation
Purchased
13	NYF	E-MINI Russell 2000 Index	March 2010	$	811,070	$	34,806
79	CME	E-MINI S&P 500 Index	March 2010		4,387,265		49,636
						$	84,442
Mid/Small Company Index Fund
Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation
Purchased
48	NYF	E-MINI Russell 2000 Index	March 2010	$	2,994,720	$	81,052
41	CME	E-MINI S&P MidCap 400	March 2010		2,972,090		62,023
						$	143,075

 

178

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Overseas Equity Index Fund

Number of Contracts	Exchange	Contract	Expiration Date	Contract Value		Net Unrealized Appreciation
Purchased
23	EUX	DJ Euro STOXX 50 Index	March 2010	$	979,917	$	14,639
6	LIF	FTSE 100 Index	March 2010		519,594		9,274
2	SFE	SPI 200 Index	March 2010		219,128		9,836
6	TSE	TOPIX Index	March 2010		582,703		813
						$	34,562

 

Forward Foreign Currency Exchange Contracts

A forward foreign currency exchange contract is a privately negotiated agreement to pay or receive specific amounts of a currency at a future date in exchange for another currency at an agreed upon exchange rate.

Certain funds may enter into forward foreign currency exchange contracts to seek to manage or “hedge” against the currency risks to which a fund may be exposed from time to time in pursuing its investment objective(s). Generally, currency risk is the risk that foreign currency values will decline relative to the U.S. dollar. This risk may arise in connection with a fund’s investments in securities or other assets that are denominated in foreign currencies, a fund’s direct investment in foreign currency or a fund’s investment in a derivative instrument that provides exposure to a foreign currency. A decline in the value of a foreign currency relative to the U.S. dollar will reduce the value of any securities held by a fund and denominated in that currency. Certain funds may enter into forward foreign currency exchange contracts in order to gain investment exposure to a foreign currency.

The following funds are permitted (but not required) to use forward foreign currency exchange contracts to manage any foreign currency risk to which they may be exposed from time to time: the Low Duration Bond Fund, Inflation Protected Securities Fund, Equity Income Fund, Growth & Income Fund, Growth Fund, Select Value Fund, Aggressive Opportunities Fund, Discovery Fund, International Fund, Diversified Assets Fund, and Overseas Equity Index Fund. Certain funds, such as the Diversified Assets Fund, may enter into forward foreign currency exchange contracts in order to gain investment exposure to a foreign currency. Certain funds may be permitted (but are not required) to enter into forward foreign currency exchange contracts for other purposes, as described in the prospectus and/or statement of additional information, but any such uses generally would not be as common as the primary and secondary uses described above. No fund is required to use forward foreign currency exchange contracts for any or all of the uses described herein.

Risks of entering into forward foreign currency exchange contracts include the possibility that foreign currency values may change unfavorably relative to the U.S. dollar, there may be an illiquid market or a change in the value of the contracts may not correlate with changes in the value of the underlying currency. The amount at risk for such forward foreign currency exchange contracts may exceed the amount reflected in the financial statements. The use of over-the-counter forward foreign currency exchange contracts includes counterparty risk, which is the risk that the other party to a contract may not fulfill its obligations. The risk of loss from non-performance by the counterparty may be reduced by the use of a written agreement with the counterparty that includes certain safeguards regarding the counterparty’s obligations.

The net U.S. dollar value of foreign currency underlying all contractual commitments held by a fund and the resulting unrealized appreciation or depreciation are determined daily using prevailing exchange rates. Realized gain or loss is recorded upon the termination of the contract. Net realized and unrealized gains or losses occurring during the holding period of forward foreign currency exchange contracts are a component of net realized gain (loss) on foreign currency transactions and change in net unrealized appreciation (depreciation) on forward contracts and foreign currency transactions in the Statements of Operations, respectively.

During the year ended December 31, 2009, the following funds purchased or sold forward foreign currency exchange contracts: Low Duration Bond Fund, Inflation Protected Securities Fund, Discovery Fund, Diversified Assets Fund, and Overseas Equity Index Fund.

179

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

As of December 31, 2009, the following funds had open forward foreign currency exchange contracts outstanding:

Low Duration Bond Fund

Contract Type	Currency to Deliver	In Exchange For	Exchange Date	Foreign Currency Cost/Proceeds (U.S.$)		U.S. Dollar Value at December 31, 2009		Net Unrealized Appreciation
Sale	EUR	USD	01/11/2010	$	7,475,490	$	7,230,826	$	244,664

 

Inflation Protected Securities Fund

Contract Type	Currency to Deliver	In Exchange For	Exchange Date	Foreign Currency Cost/Proceeds (U.S.$)		U.S. Dollar Value at December 31, 2009		Net Unrealized Appreciation/ (Depreciation)
Purchase	EUR	JPY	02/05/2010	$	1,548,230	$	1,531,510	$	(16,720	)
Purchase	JPY	EUR	02/05/2010		1,541,810		1,548,230		6,420
								$	(10,300	)
Sale	EUR	USD	01/20/2010	$	1,498,697	$	1,425,666	$	73,031
								$	62,731

 

Discovery Fund

Contract Type	Currency to Deliver	In Exchange For	Exchange Date	Foreign Currency Cost/Proceeds (U.S.$)		U.S. Dollar Value at December 31, 2009		Net Unrealized Appreciation
Sale	EUR	USD	01/11/2010	$	680,261	$	657,999	$	22,262

 

Diversified Assets Fund

Contract Type	Currency to Deliver	In Exchange For	Exchange Date	Foreign Currency Cost/Proceeds (U.S.$)		U.S. Dollar Value at December 31, 2009		Net Unrealized Appreciation/ (Depreciation)
Purchase	USD	AUD	01/07/2010	$	22,051,368	$	21,725,211	$	(326,157	)
Purchase	USD	AUD	02/03/2010		18,447,691		18,423,279		(24,412	)
Purchase	USD	CAD	01/07/2010		3,440,348		3,456,117		15,769
Purchase	USD	CHF	01/07/2010		11,604,055		11,347,024		(257,031	)
Purchase	USD	CHF	02/03/2010		7,950,131		7,944,622		(5,509	)
Purchase	USD	EUR	01/07/2010		10,410,667		10,073,556		(337,111	)
Purchase	USD	GBP	01/07/2010		32,666,822		32,721,166		54,344
Purchase	USD	JPY	01/07/2010		14,267,657		13,194,526		(1,073,131	)
Purchase	USD	JPY	02/03/2010		10,022,733		10,018,374		(4,359	)
Purchase	USD	NOK	01/07/2010		4,736,787		4,737,879		1,092
Purchase	USD	NOK	02/03/2010		4,743,091		4,732,215		(10,876	)
Purchase	USD	NZD	01/07/2010		8,788,798		8,942,449		153,651
Purchase	USD	NZD	02/03/2010		6,343,172		6,328,091		(15,081	)
Purchase	USD	SEK	01/07/2010		2,547,417		2,542,198		(5,219	)
								$	(1,834,030	)

180

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Contract Type	Currency to Deliver	In Exchange For	Exchange Date	Foreign Currency Cost/Proceeds (U.S.$)		U.S. Dollar Value at December 31, 2009		Net Unrealized Appreciation/ (Depreciation)
Sale	AUD	USD	01/07/2010	$	21,823,133	$	21,725,211	$	97,922
Sale	CAD	USD	01/07/2010		3,433,120		3,456,118		(22,998	)
Sale	CAD	USD	02/03/2010		2,774,436		2,781,068		(6,632	)
Sale	CHF	USD	01/07/2010		11,334,737		11,347,024		(12,287	)
Sale	EUR	USD	01/07/2010		10,112,175		10,073,556		38,619
Sale	EUR	USD	02/03/2010		3,277,212		3,274,654		2,558
Sale	GBP	USD	01/07/2010		33,219,419		32,721,164		498,255
Sale	GBP	USD	02/03/2010		26,272,997		26,280,102		(7,105	)
Sale	JPY	USD	01/07/2010		13,320,773		13,194,526		126,247
Sale	NOK	USD	01/07/2010		4,748,550		4,737,878		10,672
Sale	NZD	USD	01/07/2010		8,940,987		8,942,449		(1,462	)
Sale	SEK	USD	01/07/2010		2,602,630		2,542,198		60,432
Sale	SEK	USD	02/03/2010		2,547,727		2,542,550		5,177
								$	789,398
								$	(1,044,632	)

 

Overseas Equity Index Fund

Contract Type	Currency to Deliver	In Exchange For	Exchange Date	Foreign Currency Cost/Proceeds (U.S.$)		U.S. Dollar Value at December 31, 2009		Net Unrealized Appreciation/ (Depreciation)
Purchase	USD	AUD	03/17/2010	$	670,755	$	667,154	$	(3,601	)
Purchase	USD	EUR	03/17/2010		4,133,314		4,043,512		(89,802	)
Purchase	USD	GBP	03/17/2010		2,466,872		2,457,576		(9,296	)
Purchase	USD	JPY	03/17/2010		3,756,200		3,565,504		(190,696	)
								$	(293,395	)
Sale	AUD	USD	03/17/2010	$	597,071	$	589,673	$	7,398
Sale	EUR	USD	03/17/2010		2,817,078		2,773,139		43,939
Sale	GBP	USD	03/17/2010		1,689,970		1,681,557		8,413
Sale	JPY	USD	03/17/2010		1,687,067		1,607,761		79,306
								$	139,056
								$	(154,339	)

 

Option Contracts

An option gives the holder the right but not the obligation to enter into a transaction (e.g., the purchase or sale of a security, an index of securities or another instrument, such as a futures contract) with another party at a specified price (called the strike price). The counterparty is obligated to enter into the transaction if the holder elects to exercise the option. A call option gives the holder the right to purchase the underlying security or instrument from the other party; a put option gives the holder the right to sell the underlying security or instrument to the other party. Purchasing a put option contract may protect the purchaser from declines in market value on the underlying index or security. Purchasing a call option contract may enable the purchaser to benefit from price appreciation (if any) in the underlying index or security.

Certain funds may enter into option contracts to seek to manage or “hedge” against one or more of the investment risks to which a fund may be exposed from time to time in pursuing its investment objective(s), including, for example, debt instrument risks (such as interest rate risk, which is the risk that interest rates will rise, causing bond prices to fall, and credit risk, which is the risk that the issuer of a debt instrument will default on its obligation to pay interest and/or principal on the instrument) and stock market risk (which is the risk that stock prices overall will decline over short or extended periods).

181

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Funds that may use option contracts to, among other things, seek to manage debt instrument risks include: the Low Duration Bond Fund, Inflation Protected Securities Fund, and the Diversified Assets Fund. Funds that may use option contracts to seek to manage stock market risk include: the Growth Fund, Select Value Fund, Aggressive Opportunities Fund, Discovery Fund, International Fund, and Diversified Assets Fund. In addition, the Diversified Assets Fund and Inflation Protected Securities Fund, may use option contracts to obtain investment exposure to a certain asset or asset class. Certain funds also may be permitted to use option contracts for other purposes, as described in the prospectus and statement of additional information, but any such uses generally would not be as common as the primary and secondary uses described above. No fund is required to use option contracts for any or all of the uses described herein.

Purchases of put and call options are recorded as an investment, the value of which is marked to market at each valuation date. When a purchased option expires, the fund will realize a loss equal to the premium paid. When a fund enters into a closing sale transaction, the fund will realize a gain or loss depending on whether the sales proceeds from the closing sale transaction are greater or less than the cost of the option. When a fund exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When a fund exercises a call option, the cost of the security which the fund purchases upon exercise will be increased by the premium originally paid. When a fund writes a call or put option, an amount equal to the premium received by the fund is recorded as a liability, the value of each option is marked to market at each valuation date. When a written option expires, the fund realizes a gain equal to the amount of the premium originally received. When a fund enters into a closing purchase transaction, the fund realizes a gain (or loss if the cost of the closing purchase transaction exceeds the premium originally received when the option was sold/written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When a written call option is exercised, the fund realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are increased by the amount of the premium originally received. When a written put option is exercised, the amount of the premium originally received will reduce the cost of the security that the fund purchased upon exercise. Options written are reported as a liability in a fund’s Statement of Assets and Liabilities. Gains and losses are reported in a fund’s Statement of Operations. Option contract transactions may incur a commission, in addition to the premium paid or received.

A risk in writing, which is selling, a call option is that the fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. A risk in writing a put option is that the fund may incur a loss if the market price of the security decreases and the option is exercised. A risk in buying an option is that the fund pays a premium whether or not the option is exercised. The use of over-the-counter option contracts may also include counterparty risk, which is the risk that the other party to the contract may not fulfill its obligations. The risk of loss from non-performance by the counterparty may be reduced by the use of a written agreement with the counterparty that includes certain safeguards regarding the counterparty’s obligations.

During the year ended December 31, 2009, the following funds purchased or sold put options and call options: Inflation Protected Securities Fund and Diversified Assets Fund.

Written option activity for the year ended December 31, 2009 was as follows:

	Call Options				Put Options						Total
Inflation Protected Securities Fund	Number of Contracts		Premium		Number of Contracts			Premium			Number of Contracts			Premium
Beginning balance as of 01/01/2009		—	$	—		—		$	—			—		$	—
Written		—		—		28			9,547			28			9,547
Closed		—		—		(23	)		(7,842	)		(23	)		(7,842	)
Expired		—		—		(5	)		(1,705	)		(5	)		(1,705	)
Ending balance as of 12/31/2009		—	$	—		—		$	—			—		$	—

 

Swap Agreements

Generally, a swap is a privately-negotiated agreement between two parties to exchange the return generated by one instrument for the return generated by another instrument. Interest rate swap agreements involve the exchange between two parties of their respective commitments to pay or receive interest with respect to a notional amount of principal.

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NOTES TO THE FINANCIAL STATEMENTS—(Continued)

An inflation swap agreement involves the exchange between two parties of their respective commitments to pay or receive a fixed rate in exchange for the actual rate of change of an inflation index with respect to a notional amount of principal. Total return swap agreements are contracts in which one party agrees to make periodic payments to another party based on the change in market value of the assets underlying the contract, which may include a specified security, basket of securities or securities indices during the specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. Credit default swaps are contracts whereby one party makes periodic payments to a counterparty in exchange for the right to receive from the counterparty a payment equal to the par (or other agreed-upon) value of a referenced debt obligation in the event of a default by the issuer of the debt obligation.

Certain funds may enter into swap agreements to seek to manage or “hedge” against one or more investment risks to which a fund may be exposed from time to time in pursing its investment objective(s), including, for example, interest rate risk, which is the risk that interest rates will rise, causing bond prices to fall, and credit risk, which is the risk that the issuer of a debt instrument will default on its obligation to pay interest and/or principal on the instrument.

Funds that may use swap agreements to seek to manage interest rate or credit risks include: the Low Duration Bond Fund, Inflation Protected Securities Fund, Discovery Fund, Diversified Assets Fund, and Core Bond Index Fund. In addition, some funds, such as the Diversified Assets Fund and Inflation Protected Securities Fund, may use swap agreements to obtain investment exposure to a certain asset or asset class. Certain funds also may be permitted to use swap agreements for other purposes, as described in the prospectus and statement of additional information, but any such uses generally would not be as common as the uses described above. No fund is required to use swap agreements for any or all of the uses described herein.

The risks of entering into swap agreements include the possible lack of liquidity and unfavorable changes in the underlying investments or instruments. The use of swap agreements may also include counterparty risk, which is the risk that the other party to a swap agreement may not fulfill its obligations. The risk of loss from non-performance by the counterparty may be reduced by the use of a written agreement with the counterparty that includes certain safeguards regarding the counterparty’s obligations.

In certain types of swap transactions, the risk of loss is increased because the fund may be required to make additional or higher payments to the counterparty as a result of market volatility. In addition, swap agreements are not traded on exchanges or other organized markets and thus may be less liquid than other derivative instruments.

The swap listed below is marked to market daily using pricing services or fair values, and the change in value, if any, is recorded as unrealized gain or loss in the Statement of Operations.

Changes in value, including the periodic amounts of interest to be paid or received on swaps, are recorded as unrealized appreciation (depreciation) on swaps. Realized gain or loss is recorded upon receipt or payment of a periodic settlement or termination of swap agreements. Net realized and unrealized gains and losses occurring during the holding period of swap agreements are a component of net realized gain (loss) on swap agreements and change in net unrealized appreciation (depreciation) on swap agreements in the Statements of Operations, respectively.

During the year ended December 31, 2009, the following fund participated in interest rate swap agreements: Inflation Protected Securities Fund.

As of December 31, 2009, the following swap agreement was outstanding:

Inflation Protected Securities Fund

Interest Rate Swaps
	Rates Exchanged
Swap Counterparty	Payments Made By The Fund	Payments Received By The Fund			Termination Date		Notional Amount		Net Unrealized Appreciation
Morgan Stanley Capital Services	Daily Brazil CETIP Interbank Deposit Rate		12.54	%		01/02/2012		BRL6,600,000	$	112,296

 

Swap Options (“Swaptions”)

A swaption is a contract that gives a counterparty the right (but not the obligation), in return for the payment of a premium, to enter into a new swap agreement, or shorten, extend, cancel or otherwise modify an existing swap agreement, at some designated future time on specified terms. When a fund purchases a swaption, it risks losing only

183

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NOTES TO THE FINANCIAL STATEMENTS—(Continued)

the amount of the premium it has paid should it decide to let the option expire unexercised. However, when a fund writes a swaption, upon exercise of the option the fund will become obligated according to the terms of the underlying agreement. The use of swaptions includes counterparty risk, which is the risk that the other party to a swaption may not fulfill its obligations. The risk of loss from non-performance by the counterparty may be reduced by the use of a written agreement with the counterparty that includes certain safeguards regarding the counterparty’s obligations.

Certain funds may enter into swap options (or “swaptions”) to seek to manage or “hedge” against one or more investment risks to which a fund may be exposed from time to time in pursuing its investment objective(s), including, for example, interest rate risk, which is the risk that interest rates will rise, causing bond prices to fall, and credit risk, which is the risk that the issuer of a debt instrument will default on its obligation to pay interest and/or principal on the instrument.

Funds that may use swaptions to seek to manage interest rate or credit risks include: the Low Duration Bond Fund, Inflation Protected Securities Fund, Discovery Fund, Diversified Assets Fund, and Core Bond Index Fund. Some funds, such as the Diversified Assets Fund and the Inflation Protected Securities Fund, also may use swaptions to obtain investment exposure to a certain asset or asset class. Certain funds also may be permitted to use swaptions for other purposes, as described in the prospectus and statement of additional information, but any such uses generally would not be as common as the uses described above. No fund is required to use swaptions for any or all of the uses described herein.

Purchases of put and call swaptions are recorded as an investment, the value of which is marked to market at each valuation date. When a purchased swaption expires, the fund will realize a loss equal to the premium paid. When a fund enters into a closing sale transaction, the fund will realize a gain or loss depending on whether the sales proceeds from the closing sale transaction are greater or less than the cost of the swaption. When a fund exercises a put swaption, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When a fund exercises a call swaption, the cost of the security which the fund purchases upon exercise will be increased by the premium originally paid. When a fund writes a call or put swaption, an amount equal to the premium received by the fund is recorded as a liability, the value of each swaption is marked to market at each valuation date. When a written swaption expires, the fund realizes a gain equal to the amount of the premium originally received. When a fund enters into a closing purchase transaction, the fund realizes a gain (or loss if the cost of the closing purchase transaction exceeds the premium originally received when the swaption was sold/written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such swaption is eliminated. When a written call swaption is exercised, the fund realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are increased by the amount of the premium originally received. When a written put swaption is exercised, the amount of the premium originally received will reduce the cost of the security that the fund purchased upon exercise. Swaptions written are reported as a liability in a fund’s Statement of Assets and Liabilities. Gains and losses are reported in a fund’s Statement of Operations. Swaption contract transactions may incur a commission, in addition to the premium paid or received.

During the year ended December 31, 2009, the following fund participated in interest rate swaption agreements: Inflation Protected Securities Fund.

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NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Written swaption activity for the year ended December 31, 2009 was as follows:

	Call Swaptions						Put Swaptions						Total
Inflation Protected Securities Fund	Notional Amount			Premium			Notional Amount			Premium			Notional Amount			Premium
Beginning balance as of 01/01/2009	$	4,400,000		$	107,490		$	1,800,000		$	12,343		$	6,200,000		$	119,833
Written		56,150,000			257,830			102,150,000			730,081			158,300,000			987,911
Closed		(47,150,000	)		(258,525	)		(82,950,000	)		(588,519	)		(130,100,000	)		(847,044	)
Expired		—			—			—			—			—			—
Ending balance as of 12/31/2009	$	13,400,000		$	106,795		$	21,000,000		$	153,905		$	34,400,000		$	260,700

 

Exchange	Contract	Notional Amount		Strike Rate			Expiration Date		Net Unrealized Appreciation/ (Depreciation)
OTC	Put—Interest Rate Swaption	$	5,300,000		3.50	%		2/17/2010	$	(53,103	)
OTC	Call—Interest Rate Swaption		2,900,000		3.25	%		4/19/2010		24,037
OTC	Put—Interest Rate Swaption		2,900,000		4.25	%		4/19/2010		(25,550	)
OTC	Call—Interest Rate Swaption		2,200,000		2.75	%		4/19/2010		1,805
OTC	Put—Interest Rate Swaption		2,200,000		4.00	%		4/19/2010		(7,240	)
OTC	Call—Interest Rate Swaption		2,000,000		3.25	%		2/17/2010		19,649
OTC	Put—Interest Rate Swaption		1,800,000		4.00	%		4/19/2010		(12,421	)
OTC	Call—Interest Rate Swaption		1,800,000		3.25	%		4/19/2010		6,850
OTC	Put—Interest Rate Swaption		1,800,000		4.25	%		4/19/2010		(14,895	)
OTC	Call—Interest Rate Swaption		1,800,000		2.75	%		4/19/2010		13,177
OTC	Put—Interest Rate Swaption		1,800,000		4.00	%		2/17/2010		(13,949	)
OTC	Call—Interest Rate Swaption		1,700,000		3.25	%		2/17/2010		14,768
OTC	Put—Interest Rate Swaption		1,700,000		4.00	%		2/17/2010		(19,294	)
OTC	Put—Interest Rate Swaption		1,500,000		4.00	%		2/17/2010		(17,983	)
OTC	Put—Interest Rate Swaption		1,000,000		4.25	%		4/19/2010		(8,650	)
OTC	Put—Interest Rate Swaption		1,000,000		4.25	%		4/19/2010		(11,225	)
OTC	Call—Interest Rate Swaption		1,000,000		3.25	%		4/19/2010		11,206
									$	(92,818	)

 

185

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NOTES TO THE FINANCIAL STATEMENTS—(Continued)

In April 2009, the Company adopted FASB ASC 815 “Disclosure about Derivative Instruments and Hedging Activities” (“ASC 815”), which requires enhanced disclosures about the funds’ derivatives and hedging activities. The following tables reflect the value of the funds’ derivative contracts by certain risk exposure types as of December 31, 2009.

	Asset Derivatives				Liability Derivatives
Risk Exposure	Statement of Assets and Liabilities Location	Value			Statement of Assets and Liabilities Location	Value
Low Duration Bond Fund
Interest rate	Receivable for variation margin on futures contracts	$	127,803	*	Payable for variation margin on futures contracts	$	—
Foreign currency	Unrealized appreciation on forward foreign currency exchange contracts		244,664		Unrealized depreciation on forward foreign currency exchange contracts		—
Total		$	372,467			$	—
Inflation Protected Securities Fund
Interest rate	Receivable for variation margin on futures contracts and unrealized appreciation on swap agreements	$	144,622	*	Payable for variation margin on futures contracts and written options at value	$	413,948	*
Foreign currency	Unrealized appreciation on forward foreign currency exchange contracts		79,451		Unrealized depreciation on forward foreign currency exchange contracts		16,720
Total		$	224,073			$	430,668
Asset Allocation Fund
Interest rate	Receivable for variation margin on futures contracts	$	—		Payable for variation margin on futures contracts	$	1,787,808	*
Equity	Receivable for variation margin on futures contracts		494,208	*	Payable for variation margin on futures contracts		—
Total		$	494,208			$	1,787,808
Discovery Fund
Interest rate	Receivable for variation margin on futures contracts	$	6,798	*	Payable for variation margin on futures contracts	$	—
Foreign currency	Unrealized appreciation on forward foreign currency exchange contracts		22,262		Unrealized depreciation on forward foreign currency exchange contracts		—
Equity	Receivable for variation margin on futures contracts		2,927,648	*	Payable for variation margin on futures contracts		—
Total		$	2,956,708			$	—
Diversified Assets Fund
Interest rate	Investment in securities, at value — purchased options and receivable for variation margin on futures contracts	$	2,481,289	ˆ	Payable for variation margin on futures contracts		$647,704	*
Foreign currency	Unrealized appreciation on forward foreign currency exchange contracts		1,064,738		Unrealized depreciation on forward foreign currency exchange contracts		2,109,370
Equity	Receivable for variation margin on futures contracts		1,179,139	*	Payable for variation margin on futures contracts		1,370,190	*
Total		$	4,725,166			$	4,127,264

186

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

	Asset Derivatives				Liability Derivatives
Risk Exposure	Statement of Assets and Liabilities Location	Value			Statement of Assets and Liabilities Location	Value
500 Stock Index Fund
Equity	Receivable for variation margin on futures contracts	$	35,558	*	Payable for variation margin on futures contracts	$	—
Total		$	35,558			$	—
Broad Market Index Fund
Equity	Receivable for variation margin on futures contracts	$	84,442	*	Payable for variation margin on futures contracts	$	—
Total		$	84,442			$	—
Mid/Small Company Index Fund
Equity	Receivable for variation margin on futures contracts	$	143,075	*	Payable for variation margin on futures contracts	$	—
Total		$	143,075			$	—
Overseas Equity Index Fund
Foreign currency	Unrealized appreciation on forward foreign currency exchange contracts	$	139,056		Unrealized depreciation on forward foreign currency exchange contracts	$	293,395
Equity	Receivable for variation margin on futures contracts		34,562	*	Payable for variation margin on futures contracts		—
Total		$	173,618			$	293,395

 

* Includes cumulative appreciation (depreciation) of futures contracts as reported in the Notes to Financial Statements. Only the current day’s variation margin is reported within the asset and liability sections of the Statements of Assets and Liabilities.

ˆ Includes cumulative appreciation (depreciation) of futures contracts and options on futures at value as reported in the Notes to Financial Statements and Schedule of Investments, respectively. Only the current day’s variation margin is reported within the asset and liability sections of the Statements of Assets and Liabilities.

187

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

The following tables reflect the funds’ gains (losses) related to derivative activities by risk exposure types for the year ended December 31, 2009 in accordance with ASC 815. These gains (losses) are included in net realized gain (loss) or net change in unrealized appreciation (depreciation) in the Statements of Operations.

Low Duration Bond Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts			Swap Agreements		Total
Interest rate	$	—	$	(190,784	)	$	—		$	—	$	(190,784	)
Foreign currency		—		—			(2,517,392	)		—		(2,517,392	)
Total	$	—	$	(190,784	)	$	(2,517,392	)	$	—	$	(2,708,176	)
Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts			Swap Agreements		Total
Interest rate	$	—	$	12,234		$	—		$	—	$	12,234
Foreign currency		—		—			985,933			—		985,933
Total	$	—	$	12,234		$	985,933		$	—	$	998,167

 

Inflation Protected Securities Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements		Total
Interest rate	$	619,574	$	254,841	$	—	$	2,081,828	$	2,956,243
Foreign currency		—		—		54,020		—		54,020
Total	$	619,574	$	254,841	$	54,020	$	2,081,828	$	3,010,263

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements			Total
Interest rate	$	51,664	$	19,538	$	—	$	(1,492,715	)	$	(1,421,513	)
Foreign currency		—		—		62,731		—			62,731
Total	$	51,664	$	19,538	$	62,731	$	(1,492,715	)	$	(1,358,782	)

 

Asset Allocation Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts		Swap Agreements		Total
Interest rate	$	—	$	(1,305,980	)	$	—	$	—	$	(1,305,980	)
Equity		—		(627,971	)		—		—		(627,971	)
Total	$	—	$	(1,933,951	)	$	—	$	—	$	(1,933,951	)

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts		Swap Agreements		Total
Interest rate	$	—	$	(1,787,808	)	$	—	$	—	$	(1,787,808	)
Equity		—		(187,381	)				—		(187,381	)
Total	$	—	$	(1,975,189	)	$	—	$	—	$	(1,975,189	)

 

188

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Discovery Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts			Swap Agreements		Total
Interest rate	$	—	$	(2,684	)	$	—		$	—	$	(2,684	)
Foreign currency		—		—			(319,791	)		—		(319,791	)
Equity		—		22,000,627			—			—		22,000,627
Total	$	—	$	21,997,943		$	(319,791	)	$	—	$	21,678,152

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts		Swap Agreements		Total
Interest rate	$	—	$	6,798		$	—	$	—	$	6,798
Foreign currency		—		—			241,047		—		241,047
Equity		—		(3,226,601	)		—		—		(3,226,601	)
Total	$	—	$	(3,219,803	)	$	241,047	$	—	$	(2,978,756	)

 

International Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements		Total
Foreign currency	$	—	$	—	$	182,227	$	—	$	182,227

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts			Swap Agreements		Total
Foreign currency	$	—	$	—	$	(127,698	)	$	—	$	(127,698	)

 

Diversified Assets Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements		Total
Interest rate	$	1,833,185	$	858,072	$	—	$	—	$	2,691,257
Foreign currency		—		—		2,083,458		—		2,083,458
Equity		—		8,107,111		—		—		8,107,111
Total	$	1,833,185	$	8,965,183	$	2,083,458	$	—	$	12,881,826

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts			Futures Contracts			Forward Foreign Currency Contracts			Swap Agreements			Total
Interest rate	$	(220,241	)	$	(732,180	)	$	—		$	(332,335	)	$	(1,284,756	)
Foreign currency		—			—			(982,686	)		—			(982,686	)
Equity		—			(255,482	)		—			—			(255,482	)
Total	$	(220,241	)	$	(987,662	)	$	(982,686	)	$	(332,335	)	$	(2,522,924	)

 

189

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

500 Stock Index Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements		Total
Equity	$	—	$	1,492,920	$	—	$	—	$	1,492,920

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts		Swap Agreements		Total
Equity	$	—	$	(48,426	)	$	—	$	—	$	(48,426	)

 

Broad Market Index Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements		Total
Equity	$	—	$	1,394,571	$	—	$	—	$	1,394,571

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts		Swap Agreements		Total
Equity	$	—	$	(109,929	)	$	—	$	—	$	(109,929	)

 

Mid/Small Company Index Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements		Total
Equity	$	—	$	1,625,655	$	—	$	—	$	1,625,655

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements		Total
Equity	$	—	$	16,249	$	—	$	—	$	16,249

 

Overseas Equity Index Fund

Net Realized Gain (Loss)
Risk Exposure	Option Contracts		Futures Contracts		Forward Foreign Currency Contracts		Swap Agreements		Total
Foreign currency	$	—	$	—	$	578,244	$	—	$	578,244
Equity		—		476,433		—		—		476,433
Total	$	—	$	476,433	$	578,244	$	—	$	1,054,677

 

Net Change in Unrealized Appreciation (Depreciation)
Risk Exposure	Option Contracts		Futures Contracts			Forward Foreign Currency Contracts			Swap Agreements		Total
Foreign currency	$	—	$	—		$	(269,480	)	$	—	$	(269,480	)
Equity		—		(30,935	)		—			—		(30,935	)
Total	$	—	$	(30,935	)	$	(269,480	)	$	—	$	(300,415	)

 

The value of derivative instruments at period end and effect of derivatives on the Statements of Operations is indicative of the funds’ typical volume of derivative activity.

190

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

4. Agreements and Other Transactions with Affiliates

VIA, a wholly owned subsidiary of ICMA-RC, provides investment advisory services to each of the funds. Pursuant to Master Advisory Agreements, VIA is entitled to receive 0.10% of the average daily net assets of each Actively Managed and Milestone Fund and 0.05% of the average daily net assets of the Index Funds. Effective July 1, 2005, VIA is entitled to receive 0.10% on the first $500 million of net assets, 0.09% on the next $500 million of net assets, and 0.08% on net assets over $1 billion for each Model Portfolio Fund. For these services, VIA received $12,570,739 in the aggregate for the year ended December 31, 2009.

VIA and the Company contract with one or more subadvisers (“Subadvisers”) for the day-to-day management of each of the funds other than the Money Market Fund, Model Portfolio Funds and Milestone Funds. Each Subadviser is paid a fee by the funds during the year based on average net assets under management, except that the subadviser fee for Analytic Investors, LLC and Mellon Capital Management Corporation for the Diversified Assets Fund is calculated based on the average net asset value of the fund’s assets allocated and assigned to each of them by VIA. The fee structure for many of the Subadvisers provides for a range of fees so that as average net assets of a fund increase the rate of fee paid decreases. With other Subadvisers, one fee is applicable to all levels of assets under management. Additional information about each Subadviser’s fee is presented in the Company’s prospectus and statement of additional information. Fees paid by each fund to Subadvisers during the year ended December 31, 2009 are presented in the “Additional Information” section of these Notes. The Subadviser’s fees during the year ended December 31, 2009 are shown here as an annual percentage of average net assets under management, except that the subadviser fee for Analytic Investors, LLC and Mellon Capital Management Corporation for the Diversified Assets Fund which is calculated based on the average net asset value of the assets allocated and assigned to each of them by VIA.

Fund	Subadviser	Actual Fee as a Percentage of Average Daily Net Assets (net of any subadviser fee waivers)
Low Duration Bond	Payden & Rygel		0.10%
	STW Fixed Income Management Ltd.		0.20%
Inflation Protected Securities	Pacific Investment Management Company, LLC		0.20%
	BlackRock Financial Management, Inc.		0.11%
Asset Allocation	Mellon Capital Management Corporation		0.29%
Equity Income	Barrow, Hanley, Mewhinney & Strauss, Inc.		0.25%
	T. Rowe Price Associates, Inc.		0.38%
	Southeastern Asset Management, Inc.		0.53%
Growth & Income	Capital Guardian Trust Company (1)		0.24%
	Fiduciary Management, Inc. (2)		0.29%
	T. Rowe Price Associates, Inc.		0.38%
	Wellington Management Company, LLP		0.29%
Growth	Columbus Circle Investors		0.35%
	D.G. Capital Management Trust		0.46%
	Legg Mason Capital Management, Inc.		0.32%
	Tukman Grossman Capital Management, Inc.		0.40%
	Westfield Capital Management Company, L.P.		0.34%
Select Value	Artisan Partners Limited Partnership		0.55%
	Systematic Financial Management L.P.		0.45%
	WEDGE Capital Management L.L.P.		0.56%
Aggressive Opportunities	Legg Mason Capital Management, Inc.		0.32%
	Southeastern Asset Management, Inc.		0.58%
	TimesSquare Capital Management, LLC		0.50%
	T. Rowe Price Associates, Inc.		0.58%

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VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Fund	Subadviser	Actual Fee as a Percentage of Average Daily Net Assets (net of any subadviser fee waivers)
Discovery	Payden & Rygel		0.15%
	Wellington Management Company, LLP		0.73%
International	Artisan Partners Limited Partnership		0.70%
	Capital Guardian Trust Company (3)		0.47%
	GlobeFlex Capital, LP		0.40%
	Mondrian Investment Partners Limited (4)		0.44%
	Walter Scott & Partners Limited		0.58%
Diversified Assets	Analytic Investors, LLC		0.45%
	Drake Capital Management, LLC (5)		0.23%
	Mellon Capital Management Corporation		0.65%
	Payden & Rygel (short-duration fixed income strategy)		0.08%
	Payden & Rygel (low duration bond strategy) (6)		0.09%
Core Bond Index	Mellon Capital Management Corporation		0.02%
500 Stock Index	Mellon Capital Management Corporation		0.02%
Broad Market Index	Mellon Capital Management Corporation		0.02%
Mid/Small Company Index	Mellon Capital Management Corporation		0.04%
Overseas Equity Index	Mellon Capital Management Corporation		0.07%

 

(1) Terminated as a subadviser on January 31, 2009.

(2) Began serving as a subadviser on January 21, 2009.

(3) Terminated as a subadviser on October 11, 2009. Minimum fee of $337,500 per year.

(4) Began serving as a subadviser on October 12, 2009.

(5) Terminated as a subadviser on April 10, 2009.

(6) Began serving as a subadviser to this portion of the fund on April 3, 2009.

Expenses

The Model Portfolio Funds and Milestone Funds incur fees and expenses indirectly as shareholders in their respective underlying funds and the Money Market Fund incurs fees and expenses indirectly as a shareholder of the Portfolio. Because the underlying funds have varied expense and fee levels and the Model Portfolio, Milestone and Money Market Funds may own different proportions of such funds at different times, the amount of fees and expenses indirectly incurred by the Model Portfolio, Milestone, and Money Market Funds will vary.

Fee Waivers

VIA will waive its management fee or reimburse expenses to the extent necessary as a result of any increase in subadvisory fees payable by the Growth Fund that would cause the aggregate management and subadvisory fees of the Growth Fund to exceed 0.54% as a result of subadvisory changes. This commitment will continue until such time as shareholders approve an increase in this limit. For the year ended December 31, 2009, no waiver or reimbursement was required.

During the year ended December 31, 2009, VIA waived its fee, on a voluntary basis, for the Money Market Fund. The waived amount during this period was $543,029. Any such waivers were voluntary and there can be no assurance that additional waivers can or will be made in the future.

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VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

From January 3, 2005 until April 30, 2006, VIA contractually agreed to waive fees and/or reimburse expenses to each of the Milestone Funds limiting the direct operating expenses to no more than 0.05% of the fund’s average daily net assets on an annualized basis. From May 1, 2006 through April 30, 2009, VIA contractually agreed to limit each fund’s total fund operating expenses to the following percentages:

Milestone Retirement Income	0.81%
Milestone 2010	0.88%
Milestone 2015	0.91%
Milestone 2020	0.93%
Milestone 2025	0.95%
Milestone 2030	0.97%
Milestone 2035	0.99%
Milestone 2040	0.99%

 

For the year ended December 31, 2009, VIA reimbursed each fund as follows:

Milestone Retirement Income	$26,965
Milestone 2010	$17,230
Milestone 2015	$12,138
Milestone 2020	$  8,147
Milestone 2025	$12,156
Milestone 2030	$10,676
Milestone 2035	$12,022
Milestone 2040	$12,030

 

T. Rowe Price Associates, Inc. (“T. Rowe Price”) voluntarily waives a portion of its aggregate subadvisory fees for the Growth & Income, Equity Income, and Aggressive Opportunities Funds. These voluntary fee waivers were first implemented on May 1, 2003. The fee for each fund managed by T. Rowe Price is voluntarily reduced by the following percentages, which are determined based on the total amount of assets managed by T. Rowe Price for The Vantagepoints Funds: a 2.5% waiver on the first $500 million in total assets and a 5% waiver on total assets above $500 million. For the year ended December 31, 2009, the fee waiver for the Growth & Income Fund totaled $39,906, the fee waiver for the Equity Income Fund totaled $55,105 and the fee waiver for the Aggressive Opportunities Fund totaled $41,998. Payden & Rygel has contractually agreed to waive a portion of its subadvisory fee for assets managed pursuant to its short-duration fixed income strategy until April 30, 2010, for the Diversified Assets Fund so that its fees will not exceed 0.08% of the Diversified Assets Fund’s annual average daily net assets under its management for this strategy. For the year ended December 31, 2009, this waiver totaled $40,059. Payden & Rygel also agreed to voluntarily waive a portion of its subadvisory fee for assets managed pursuant to its low duration bond strategy so that its fee will not exceed 0.08% of the Diversified Assets Fund’s annual average daily net assets under its management for this strategy from April 3, 2009 through September 27, 2009. For the year ended December 31, 2009, this waiver totaled $12,257. Effective October 1, 2008, Tukman Grossman Capital Management, Inc. (“Tukman Grossman”) voluntarily agreed to waive a portion of its subadvisory fee in an amount equal to 0.10% of the average daily market value of the assets of the Growth Fund’s assets under its management. This waiver totaled $298,553 for the year ended December 31, 2009.

5. Investment Portfolio Transactions

Purchases and sales of investments, exclusive of short-term securities, for each fund for the year ended December 31, 2009 were as follows:

	U.S. Government Obligations				Other Securities
Fund	Purchases at Cost		Sales Proceeds		Purchases at Cost		Sales Proceeds
Low Duration Bond	$	—	$	—	$	252,153,862	$	258,276,751
Inflation Protected Securities		227,686,359		213,286,129		96,766,433		104,082,224
Asset Allocation		105,221,974		9,834,767		14,839,714		137,204,239
Equity Income		—		—		257,182,014		303,927,037
Growth & Income		—		—		930,987,629		900,877,521

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VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

	U.S. Government Obligations				Other Securities
Fund	Purchases at Cost		Sales Proceeds		Purchases at Cost		Sales Proceeds
Growth	$	—	$	—	$	1,338,555,531	$	1,322,516,571
Select Value		—		—		198,038,064		211,711,592
Aggressive Opportunities		—		—		410,083,825		426,753,028
Discovery		17,031,073		18,991,062		108,195,354		91,125,642
International		—		—		1,379,410,971		1,332,995,654
Diversified Assets		—		—		418,030,172		354,980,236
Core Bond Index		361,596,076		243,209,832		428,774,520		337,279,084
500 Stock Index		—		—		41,796,622		46,451,455
Broad Market Index		—		—		26,537,582		30,017,512
Mid/Small Company Index		—		—		63,301,257		45,855,469
Overseas Equity Index		—		—		26,666,837		7,369,298
Model Portfolio Savings Oriented		—		—		39,360,948		20,069,830
Model Portfolio Conservative Growth		—		—		70,290,230		61,255,951
Model Portfolio Traditional Growth		—		—		138,582,448		87,898,511
Model Portfolio Long-Term Growth		—		—		161,034,309		64,841,128
Model Portfolio All-Equity Growth		—		—		80,827,050		15,571,438
Milestone Retirement Income		—		—		34,123,015		7,997,475
Milestone 2010		—		—		30,167,687		15,445,358
Milestone 2015		—		—		57,050,150		18,268,779
Milestone 2020		—		—		54,319,088		9,334,478
Milestone 2025		—		—		46,047,405		5,392,517
Milestone 2030		—		—		36,348,056		3,346,543
Milestone 2035		—		—		27,252,930		2,044,450
Milestone 2040		—		—		38,441,427		2,187,475

 

6. Tax Basis Unrealized Appreciation (Depreciation)

At December 31, 2009, net unrealized appreciation (depreciation) on investments was as follows:

Fund	Federal Income Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Tax Basis Net Unrealized Appreciation/ (Depreciation)
Money Market	$	452,107,065	$	—	$	—	$	—
Low Duration Bond		549,543,979		12,957,342		3,812,298		9,145,044
Inflation Protected Securities		379,203,800		10,452,059		196,678		10,255,381
Asset Allocation		494,538,822		53,821,803		62,348,311		(8,526,508	)
Equity Income		1,655,424,665		229,537,653		184,907,696		44,629,957
Growth & Income		955,497,757		166,484,643		17,891,795		148,592,848
Growth		1,817,115,769		245,790,265		49,836,333		195,953,932
Select Value		300,317,860		38,816,486		7,563,274		31,253,212
Aggressive Opportunities		1,104,720,753		197,581,594		50,488,828		147,092,766
Discovery		190,330,021		18,277,588		4,119,100		14,158,488
International		1,030,812,896		81,694,477		29,229,580		52,464,897
Diversified Assets		449,673,266		3,107,705		1,260,641		1,847,064
Core Bond Index		1,341,215,993		34,545,313		12,621,620		21,923,693
500 Stock Index		276,876,000		130,032,848		53,270,379		76,762,469
Broad Market Index		443,400,220		193,808,406		104,552,298		89,256,108
Mid/Small Company Index		285,816,384		47,244,260		42,043,104		5,201,156
Overseas Equity Index		207,637,687		16,948,721		31,153,354		(14,204,633	)
Model Portfolio Savings Oriented		315,135,293		1,899,772		9,671,324		(7,771,552	)
Model Portfolio Conservative Growth		549,521,019		1,805,726		23,047,066		(21,241,340	)

194

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Fund	Federal Income Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Tax Basis Net Unrealized Appreciation/ (Depreciation)
Model Portfolio Traditional Growth	$	1,445,634,399	$	817,226	$	93,212,574	$	(92,395,348	)
Model Portfolio Long-Term Growth		1,738,989,066		2,056,302		119,735,598		(117,679,296	)
Model Portfolio All-Equity Growth		686,668,106		—		95,050,426		(95,050,426	)
Milestone Retirement Income		79,386,882		—		2,666,822		(2,666,822	)
Milestone 2010		94,256,594		—		3,427,282		(3,427,282	)
Milestone 2015		200,453,683		965,309		15,382,093		(14,416,784	)
Milestone 2020		199,727,000		566,169		14,098,811		(13,532,642	)
Milestone 2025		157,098,088		350,101		11,009,431		(10,659,330	)
Milestone 2030		128,869,945		225,023		7,836,948		(7,611,925	)
Milestone 2035		81,406,002		96,504		4,592,036		(4,495,532	)
Milestone 2040		93,716,681		23,053		2,356,200		(2,333,147	)

 

7. Portfolio Securities Loaned

Certain funds lend securities to approved borrowers to seek to earn additional income. As of December 31, 2009, certain funds had loaned securities, which were collateralized by cash or other forms of collateral as provided for in the Company’s Securities Lending Agency Agreement with JPMorgan Chase Bank, N.A. at least equal to the market value of the securities loaned. The funds receive dividends and interest on the loaned securities and a portion of interest earned on reinvested collateral. All securities loaned are marked to market daily in U.S. dollars and collateral is received and released accordingly on the following day to achieve the required collateralization for the previous day’s market value. A fund retains a portion of the interest received on investment of the cash collateral or receives a fee from the borrower. A fund also continues to receive any distributions paid on the loaned securities. The fund may terminate a loan at any time and generally expects to receive the securities loaned within the normal settlement period for the security involved. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in collateral in the event of default or insolvency of the borrower. The fund may not retain voting rights on securities while they are on loan. Voting rights on the loaned securities may pass to the borrower. The funds, however, are entitled to terminate or recall the loans to vote proxies or otherwise obtain rights to vote or consent with respect to a material event.

The funds will be indemnified by its custodian for securities lending programs conducted through the custodian if, at the time of a default by a borrower, some or all of the loaned securities have not been returned by the borrower. The custodian, as soon as practicable after the time of default, shall deposit in the funds’ accounts securities of the same number, issue, type, class and series of the unreturned loaned securities. If the custodian is unable to purchase replacement securities, it will credit to the funds’ accounts an amount equal to the market value of the unreturned loaned securities.

The market value of the securities on loan and the value of the related collateral as of December 31, 2009, were as follows:

Fund	Securities on Loan		Collateral		Collateralization
Low Duration Bond	$	44,250,183	$	44,728,953		101	%
Inflation Protected Securities		53,107,347		54,283,620		102	%
Asset Allocation		48,764,472		50,270,860		103	%
Equity Income		178,527,606		184,896,427		104	%
Growth & Income		79,698,585		82,251,772		103	%
Growth		189,988,524		195,541,773		103	%
Select Value		42,584,724		44,370,471		104	%
Aggressive Opportunities		232,614,390		240,717,338		103	%
Discovery		28,774,455		29,670,214		103	%
International		65,471,243		68,440,543		105	%
Core Bond Index		209,702,889		214,395,238		102	%
500 Stock Index		29,533,161		30,623,579		104	%
Broad Market Index		53,096,305		55,146,175		104	%
Mid/Small Company Index		57,810,316		60,108,194		104	%
Overseas Equity Index		11,951,816		12,542,046		105	%

 

195

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

8. Transactions with Affiliated Funds

At December 31, 2009, the Model Portfolio Funds and Milestone Funds held investments in a number of the underlying funds. The figures presented below represent the percentages of shares outstanding in each of the underlying funds owned by the Model Portfolio and Milestone Funds on that date:

Underlying Fund	Model Portfolio Savings Oriented			Model Portfolio Conservative Growth			Model Portfolio Traditional Growth			Model Portfolio Long-Term Growth			Model Portfolio All-Equity Growth
Low Duration Bond		25.19	%		23.21	%		20.17	%		—			—
Inflation Protected Securities		8.04	%		10.00	%		15.45	%		—			—
Equity Income		2.14	%		3.91	%		11.03	%		13.99	%		7.00	%
Growth & Income		3.14	%		4.74	%		16.21	%		20.70	%		9.77	%
Growth		—			1.79	%		7.59	%		10.31	%		5.53	%
Select Value		—			5.56	%		26.25	%		47.68	%		19.15	%
Aggressive Opportunities		—			1.63	%		7.76	%		13.96	%		5.60	%
Discovery		—			—			23.74	%		42.20	%		30.46	%
International		1.56	%		4.19	%		16.08	%		25.37	%		11.58	%
Diversified Assets		6.67	%		11.50	%		28.70	%		34.96	%		—
Core Bond Index Class I		4.57	%		12.41	%		27.25	%		27.62	%		—

 

Underlying Fund	Milestone Retirement Income			Milestone 2010			Milestone 2015			Milestone 2020			Milestone 2025
Low Duration Bond		5.93	%		6.40	%		7.17	%		3.22	%		1.13	%
Inflation Protected Securities		2.04	%		2.28	%		2.85	%		—			—
Equity Income		0.61	%		0.78	%		2.19	%		2.62	%		2.20	%
Growth & Income		0.90	%		1.05	%		2.00	%		2.05	%		1.83	%
Growth		—			0.07	%		0.74	%		0.84	%		0.74	%
International		0.45	%		0.61	%		1.90	%		2.27	%		2.04	%
Diversified Assets		1.69	%		2.00	%		4.09	%		4.09	%		3.21	%
Core Bond Index Class I		0.99	%		1.17	%		2.78	%		4.18	%		2.74	%
Mid/Small Company Index Class I		—			0.68	%		7.89	%		12.00	%		12.17	%

 

Underlying Fund	Milestone 2030			Milestone 2035			Milestone 2040
Equity Income		1.93	%		1.28	%		1.57	%
Growth & Income		1.67	%		1.10	%		1.34	%
Growth		0.68	%		0.47	%		0.60	%
International		1.88	%		1.29	%		1.62	%
Diversified Assets		2.40	%		0.68	%		—
Core Bond Index Class I		1.86	%		1.02	%		1.07	%
Mid/Small Company Index Class I		12.42	%		9.56	%		12.93	%

 

9. Control Persons and Principal Holders of Securities

As of December 31, 2009, a majority of the voting shares of all funds, except the Money Market Fund, were held either directly, or indirectly through the Model Portfolio Funds and the Milestone Funds and by VantageTrust, a group trust established and maintained by VantageTrust Company (“Trust Company”). VantageTrust was established for the purpose of holding and investing the assets of public sector retirement and deferred compensation plans. The Trust Company, a New Hampshire non-depository banking corporation, has the power to vote the shares of the funds directly held by VantageTrust and has the power to direct the vote of the shares of the Model Portfolio Funds and the Milestone Funds under the proxy voting policy adopted by VIA, the Company’s adviser. The Trust Company therefore has the power to vote more than 25% of the fund’s voting securities and thus under the 1940 Act is considered a “control” person of the funds. Both the Trust Company and VIA are wholly owned subsidiaries of ICMA-RC. As a control person of

196

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

all the funds, the Trust Company may possess the ability to control the outcome of matters submitted to the vote of shareholders.

Additionally, at December 31, 2009, the VantageTrust, an affiliated group trust, held directly or indirectly, the outstanding shares of the Company in the percentages shown below:

Fund	% Owned by Vantage Trust
Money Market		38.13	%
Low Duration Bond		81.12	%
Inflation Protected Securities		90.42	%
Asset Allocation		97.35	%
Equity Income		92.97	%
Growth & Income		92.70	%
Growth		96.98	%
Select Value		95.08	%
Aggressive Opportunities		96.46	%
Discovery		95.15	%
International		93.83	%
Diversified Assets		92.29	%
Core Bond Index Class I		90.54	%
Core Bond Index Class II		93.74	%
500 Stock Index Class I		84.87	%
500 Stock Index Class II		99.95	%
Broad Market Index Class I		87.20	%
Broad Market Index Class II		90.67	%
Mid/Small Company Index Class I		82.49	%
Mid/Small Company Index Class II		99.90	%
Overseas Index Class I		82.48	%
Overseas Index Class II		99.91	%
Model Portfolio Savings Oriented		87.13	%
Model Portfolio Conservative Growth		89.63	%
Model Portfolio Traditional Growth		95.06	%
Model Portfolio Long-Term Growth		96.43	%
Model Portfolio All-Equity Growth		93.65	%
Milestone Retirement Income		71.87	%
Milestone 2010		78.78	%
Milestone 2015		84.58	%
Milestone 2020		86.22	%
Milestone 2025		86.80	%
Milestone 2030		85.23	%
Milestone 2035		82.89	%
Milestone 2040		81.13	%

 

197

VANTAGEPOINT FUNDS
NOTES TO THE FINANCIAL STATEMENTS—(Continued)

Other than VantageTrust below is the name, address, and percentage of ownership the entity owns of record or is known to own beneficially 5% or more of any class of any fund’s outstanding shares as of December 31, 2009:

Money Market Fund

Name	Address	Percentage of Shares Owned
Lee County Board of County Commissioners	P.O. Box 398 Fort Meyers, Florida 33902	9.44%

 

10. Brokerage Commissions

VIA has entered into agreements with brokers whereby the brokers will rebate a portion of the funds’ brokerage commissions on behalf of certain funds. Such amounts, under such agreements, are included in net realized gain (loss) on the sale of investments presented in the Statements of Operations. For the year ended December 31, 2009, the funds recaptured the following amounts of brokerage commissions:

Fund	Recaptured Brokerage Commissions
Equity Income	$	54,089
Growth & Income		82,178
Growth		407,985
Select Value		60,589
Aggressive Opportunities		127,752
Discovery		11,465
International		58,973

 

11. Stock Split in the Low Duration Bond Fund (formerly the Short-Term Bond Fund)

On October 28, 2005, a “stock split” was processed in the Vantagepoint Low Duration Bond Fund. Specifically, there was a “10 for 1” split meaning that the shares outstanding were increased by a multiple of 10 and the NAV was divided by 10. Therefore, this action had no impact on the aggregate value of the shares outstanding. The record date (shareholders of record on this date were affected) was Thursday, October 27, 2005. The payable date (the date the stock split posted to shareholder accounts) was Friday, October 28, 2005. The ex-date (the date the NAV changed to reflect the split) was Friday, October 28, 2005. Share transactions, shares outstanding, NAVs, and per share ratios for prior years in the Financial Highlights have been restated to reflect historical application of the “10 for 1” split in order to present these items on a comparable basis, as required by generally accepted accounting principles.

12. Subsequent Events

Management has evaluated events or transactions that may have occurred since December 31, 2009, that would merit recognition or disclosure in the financial statements. This evaluation was completed through March 1, 2010, the date the financial statements were available to be issued and except as already included below, has determined that no additional items require disclosure.

On January 4, 2010, changes became effective for certain funds as reflected in the Company’s prospectus and statement of additional information dated January 4, 2010. These changes include: (i) changes to the principal investment strategies for the Diversified Assets Fund, including the addition of a convertibles securities strategy and the addition of two new investment subadvisers to manage fund assets in that strategy; (ii) changes to the name of the Diversified Assets Fund, now called the Diversifying Strategies Fund; (iii) changes to the principal investment strategies for each of the Model Portfolio Funds (except the Model Portfolio All-Equity Growth Fund) resulting in an overall reduction in each fund’s then-current fixed income investment allocation, and an increase in the then-current allocation to the multi-strategy fund, with no change to the allocation to equity investments; and (iv) changes to the principal investment strategies for the Milestone Funds involving: extending by 10 years the point in time at which each “dated” Milestone Fund reaches its final constant target allocation; altering the manner in which the dated Milestone Funds’ assets are allocated over time as depicted by their “glide path”; altering the final constant target asset allocation of the dated Milestone Funds; and altering the target asset allocation of the Milestone Retirement Income Fund. Also on January 4, 2010, the Milestone 2045 Fund, a new series of the Company, became effective.

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A. Tax Disclosures

For corporate shareholders, a portion of the ordinary dividends paid during the fund’s year ended December 31, 2009, qualified for the dividends received deduction as follows:

Fund
Asset Allocation	100.00	%
Equity Income	100.00	%
Growth & Income	98.22	%
Growth	100.00	%
Select Value	98.69	%
Aggressive Opportunities	51.99	%
International	3.51	%
500 Stock Index	100.00	%
Broad Market Index	100.00	%
Mid/Small Company Index	88.26	%
Model Portfolio Savings Oriented	14.88	%
Model Portfolio Conservative Growth	18.76	%
Model Portfolio Traditional Growth	31.67	%
Model Portfolio Long-Term Growth	48.66	%
Model Portfolio All-Equity Growth	84.65	%
Milestone Retirement Income	21.57	%
Milestone 2010	27.15	%
Milestone 2015	47.70	%
Milestone 2020	38.11	%
Milestone 2025	45.62	%
Milestone 2030	53.60	%
Milestone 2035	59.19	%
Milestone 2040	62.29	%

 

Pursuant to Section 852 of the Internal Revenue Code, the Company designated the following capital gain dividends for the year ended December 31, 2009:

Fund	Long Term Capital Gain Dividend
Model Portfolio Savings Oriented	$	89,456
Model Portfolio Traditional Growth		989,933
Model Portfolio Long-Term Growth		7,065,993
Model Portfolio All-Equity Growth		4,261,652
Milestone Retirement Income		68,883
Milestone 2010		362,908
Milestone 2015		1,178,592
Milestone 2020		1,486,573
Milestone 2025		1,239,920
Milestone 2030		1,159,773
Milestone 2035		732,331
Milestone 2040		792,731

 

B. Foreign Taxes Paid

For the year ended December 31, 2009, dividends from foreign countries were $24,261,930 and $4,925,114 for the International and the Overseas Equity Index Funds, respectively. Taxes paid to foreign countries that qualify for the foreign tax credit were $871,899 and $104,647 for the International and the Overseas Equity Index Funds, respectively.

All other funds treat any foreign taxes paid as a reduction of net investment company taxable income by these amounts.

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C. Sources of Income

The following table summarizes the percentage of income received by the Company in 2009 from various obligors:

Fund	U.S. Treasury Obligations			GNMA			FNMA			FHL Bank			FHLMC			Other U.S. Government Agencies
Low Duration Bond		0.39	%		9.31	%		1.64	%		1.34	%		2.31	%		0.02	%
Inflation Protected Securities		76.90	%		0.00	%		0.08	%		0.19	%		0.21	%		0.21	%
Asset Allocation		14.89	%		0.00	%		0.02	%		0.01	%		0.01	%		0.00	%
Discovery		1.50	%		18.52	%		5.62	%		4.47	%		3.46	%		0.00	%
Diversified Assets		5.61	%		0.72	%		2.43	%		3.36	%		3.30	%		1.41	%
Core Bond Index		20.04	%		4.82	%		22.34	%		1.71	%		15.36	%		0.39	%
500 Stock Index		0.01	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Broad Market Index		0.02	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Mid/Small Company Index		0.02	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Overseas Equity Index		0.01	%		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%

 

D. Qualified Dividend Income

The following are estimates of qualified dividend income received by the Company through December 31, 2009 that qualify for a reduced tax rate pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003:

Fund	Qualified Dividend Income
Asset Allocation		100.00	%
Equity Income		100.00	%
Growth & Income		100.00	%
Growth		100.00	%
Select Value		100.00	%
Aggressive Opportunities		51.99	%
Discovery		31.42	%
International		90.87	%
500 Stock Index		100.00	%
Broad Market Index		100.00	%
Mid/Small Company Index		74.80	%
Overseas Equity Index		72.25	%
Model Portfolio Savings Oriented		19.12	%
Model Portfolio Conservative Growth		25.65	%
Model Portfolio Traditional Growth		45.22	%
Model Portfolio Long-Term Growth		72.80	%
Model Portfolio All-Equity Growth		100.00	%
Milestone Retirement Income		27.85	%
Milestone 2010		35.14	%
Milestone 2015		62.26	%
Milestone 2020		49.62	%
Milestone 2025		59.60	%
Milestone 2030		70.06	%
Milestone 2035		77.21	%
Milestone 2040		81.17	%

 

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E. Directors Table

Independent Directors

Name, Address,* and Age	Positions Held with the Company	Term of Office and Length of Time Served	Principal Occupation(s) During Past Five Years	Other Directorships Held By Director
N. Anthony Calhoun (62)	Director, Audit Committee Member and Chair, Investment Committee and Nominating Committee Member	Term expires October 2011 Director since November 1998	Executive Deputy State Treasurer—Commonwealth of Pennsylvania (August 2007–March 2009); Secretary to Senate Finance Committee/Minority—State of New York Legislature (January 2007–August 2007); Retired (October 2005–January 2007); and Deputy Chief Financial Officer and Treasurer—District of Columbia (2001–2005)	N/A
Donna K. Gilding (70)	Director, Investment Committee Member and Chair, and Nominating Committee Member	Term expires October 2011 Director since November 1998	Chief Investment Officer—Lowenhaupt Global Advisors, LLC (Sept. 2006–present); Chief Investment Officer—Lowenhaupt & Chasnoff (2005–Sept. 2006) (wealth management law firm); Chief Investment Officer—Progress Investment Management Company (2000–2005); and Trustee (2007–present) and Chair (2009–present)—The National YMCA Fund, Inc.	N/A
Arthur R. Lynch (55)	Chair of the Board and Director, Audit Committee Member, Investment Committee Member, and Nominating Committee Member	Term expires October 2011 Director since November 1998	President and Chief Executive Officer—SRJ Government Consultants, LLC (October 2009–present); Deputy City Manager—City of Glendale, Arizona (2005–October 2009); and Chief Financial Officer—City of Glendale, Arizona (1985–2005)	N/A
Timothy M. O’Brien (60)	Director, Audit Committee Member, Investment Committee Member, and Nominating Committee Member	Term expires October 2014 Director since September 2005	Independent Consultant (pension consulting) (2003–present); and President and Chief Executive Officer—American Humane Association (1999–2003)	N/A
Robert A. Rudell (61)	Director, Investment Committee Member and Nominating Committee Member	Term expires October 2014 Director since March 2007	Director—Medtox Scientific, Inc. (medical device/clinical lab) (2002–present); Director—Search Institute (non-profit) (2002–present); Trustee—Optimum Fund Trust (registered investment company) (2003–present) Director—Bloodhound Investment Research, Inc. (portfolio construction software) (2003–present); Director/Chairman—Diverse Emerging Music Organization (non-profit) (2004–present); Director/Independent Chair—Heartland Funds (registered investment company (2005–present); and Director—American Investors Bank & Mortgage (bank) (2005–present)	Director—Medtox Scientific, Inc.; Trustee—Optimum Fund Trust (6 portfolios); Director/Independent Chair—Heartland Funds (3 portfolios)
Robin L. Wiessmann (56)	Director and Investment Committee Member and Nominating Committee Member	Term expires October 2013 Director since November 1998	State Treasurer—Commonwealth of Pennsylvania (April 2007–January 2009); Director—Merrill, Lynch, Pierce, Fenner & Smith Incorporated, (2006–April 2007); and Consultant—Brown Wiessmann Group (financial services consulting) (2002–2006)	Director—Met-Pro Corporation (December 2009–present)

 

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Interested Directors and Officers

Name, Address,* and Age	Positions Held with the Company	Term of Office and Length of Time Served	Principal Occupation(s) During Past Five Years	Other Directorships Held By Director
Robert O’Neill (58)**	Director	Term expires October 2010. Director since June 2008	Executive Director-ICMA (2002–present)	Director—ICMA Retirement Corporation
Joan McCallen (57)**	President and Principal Executive Officer	Since September 2003	Chief Executive Officer—ICMA Retirement Corporation (Aug. 2003–present); President and Manager—Vantagepoint Investment Advisers, LLC; ICMA-RC Services, LLC (broker-dealer); President and Manager—Vantagepoint Transfer Agents, LLC (2003–present); and Director and President, VantageTrust Company (2003–present)	N/A
Bruce James Rohrbacher (57)**	Vice President and Chief Compliance Officer	Since September 2004	Senior Vice President and Chief Compliance Officer—ICMA Retirement Corporation (2004–present); Chief Compliance Officer— Vantagepoint Investment Advisers, LLC and ICMA-RC Services, LLC (broker-dealer) (2004–present); and Chief Compliance Officer, VantageTrust Company (2004–present)	N/A
Elizabeth Glista (45)**	Treasurer and Principal Financial Officer	Since March 2009	Senior Vice President and Chief Financial Officer—ICMA Retirement Corporation (April 2009–present); Treasurer—Vantagepoint Investment Advisers, LLC, and Vantagepoint Transfer Agents, LLC (April 2009–present); Treasurer—ICMA-RC Services, LLC (broker-dealer) (April 2009–present); Treasurer—VantageTrust Company (April 2009–present); Managing Vice President, Financial Operations, Analysis & Treasury—ICMA Retirement Corporation (January 2009–April 2009); Vice President Financial Planning & Analysis and Treasury—ICMA-RC (January 2000–September 2007) and (March 2008–January 2009); and Acting Vice President, Internal Audit—ICMA-RC (September 2007–March 2008)	N/A
Angela Montez (42)**	Secretary	Since December 2006	Managing Vice President, Deputy General Counsel and Assistant Secretary—ICMA Retirement Corporation (2006–present) Corporate Counsel—ICMA Retirement Corporation (2000–2006); Secretary—Vantagepoint Investment Advisers, LLC, Vantagepoint Transfer Agents, LLC and ICMA-RC Services, LLC (broker-dealer) (2006–2007); and Assistant Secretary—VantageTrust Company (February 2008–present)	N/A

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Name, Address,* and Age	Positions Held with the Company	Term of Office and Length of Time Served	Principal Occupation(s) During Past Five Years	Other Directorships Held By Director
Kathryn B. McGrath (65)**	Assistant Secretary	Since March 2008	Senior Vice President and General Counsel—ICMA Retirement Corporation (October 2007–present); Secretary—Vantagepoint Investment Advisers, LLC, Vantagepoint Transfer Agents, LLP and ICMA-RC Services, LLC (broker-dealer) (December 2007–present); Secretary—VantageTrust Company (February 2008–present); Partner—Mayer Brown LLP (law firm) (2005–October 2007); and Partner—Crowell & Moring LLP (law firm) (2002–2005)	N/A

 

* The business address for each Director and Officer is 777 N. Capitol Street N.E., Washington, D.C. 20002.

** Mr. O’Neill is considered an Interested Director because he is a director of ICMA Retirement Corporation, the parent corporation of VIA and ICMA-RC Services. Mses. McCallen, Glista, Montez, and McGrath and Mr. Rohrbacher are considered to be “interested persons” of the Company, as that term is defined under the 1940 Act due to their positions as officers of VIA and ICMA-RC Services, the distributor of the Funds, ICMA-RC, the parent company of VIA and ICMA-RC Services, and VantageTrust Company.

Aggregate compensation that was paid to the directors during the year ended December 31, 2009 totaled $117,158. Executive officers do not receive any compensation from the Company. However, the Company pays a portion of the compensation of the Chief Compliance Officer of the Company and the amount paid by the Company during the year ended December 31, 2009 totaled $247,347.

The statement of additional information includes additional information about the Company’s Board and is available, without charge, upon request, by calling 1-800-669-7400 and on ICMA-RC’s website at www.icmarc.org.

F. Subadviser Fees

Presented below are the fees paid by each fund to Subadvisers during the year ended December 31, 2009. Fees are shown as an annual percentage of average net assets under management except that the subadviser fee for Analytic Investors, LLC and Mellon Capital Management Corporation for the Diversified Assets Fund is calculated based on the average net asset value of the assets allocated and assigned to each of them by VIA. The total dollars below represent amounts paid to Subadvisers for services performed during the period July 1, 2008 through September 30, 2009.

Fund	Subadviser	Actual Fee as a Percentage of Average Daily Net Assets (net of any subadviser fee waivers)			Dollars Paid
Low Duration Bond	Payden & Rygel		0.10	%	$	191,489
	STW Fixed Income Management Ltd.		0.20	%		427,336
Inflation Protected Securities	Pacific Investment Management Company, LLC		0.20	%		297,352
	BlackRock Financial Management, Inc.		0.11	%		168,009
Asset Allocation	Mellon Capital Management Corporation		0.29	%		1,150,515
Equity Income	Barrow, Hanley, Mewhinney & Strauss, Inc.		0.25	%		929,330
	T. Rowe Price Associates, Inc.		0.38	%		1,383,900
	Southeastern Asset Management, Inc.		0.53	%		2,060,060
Growth & Income	Capital Guardian Trust Company (1)		0.24	%		167,365
	Fiduciary Management, Inc. (2)		0.29	%		529,385
	T. Rowe Price Associates, Inc.		0.38	%		997,563
	Wellington Management Company, LLP		0.29	%		746,843

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Fund	Subadviser	Actual Fee as a Percentage of Average Daily Net Assets (net of any subadviser fee waivers)			Dollars Paid
Growth	Columbus Circle Investors		0.35	%	$	875,442
	D.G. Capital Management Trust		0.46	%		768,958
	Legg Mason Capital Management, Inc.		0.32	%		1,195,111
	Tukman Grossman Capital Management, Inc.		0.40	%		1,182,382
	Westfield Capital Management Company, L.P.		0.34	%		1,264,176
Select Value	Artisan Partners Limited Partnership		0.55	%		402,544
	Systematic Financial Management L.P.		0.45	%		326,809
	WEDGE Capital Management L.L.P.		0.56	%		409,028
Aggressive Opportunities	Legg Mason Capital Management, Inc.		0.32	%		607,173
	Southeastern Asset Management, Inc.		0.58	%		829,801
	TimesSquare Capital Management, LLC		0.50	%		1,068,866
	T. Rowe Price Associates, Inc.		0.58	%		1,026,737
Discovery	Payden & Rygel		0.15	%		94,177
	Wellington Management Company, LLP		0.73	%		458,690
International	Artisan Partners Limited Partnership		0.70	%		1,361,142
	Capital Guardian Trust Company (3)		0.47	%		1,184,166
	GlobeFlex Capital, LP		0.40	%		758,326
	Mondrian Investment Partners Limited (4)		0.44	%		—
	Walter Scott & Partners Limited		0.58	%		694,626
Diversified Assets	Analytic Investors, LLC		0.45	%		516,333
	Drake Capital Management, LLC (5)		0.23	%		66,420
	Mellon Capital Management Corporation		0.65	%		745,919
	Payden & Rygel (short-duration fixed income strategy)		0.08	%		153,919
	Payden & Rygel (low duration bond strategy) (6)		0.09	%		49,027
Core Bond Index	Mellon Capital Management Corporation		0.02	%		208,120
500 Stock Index	Mellon Capital Management Corporation		0.02	%		60,762
Broad Market Index	Mellon Capital Management Corporation		0.02	%		95,937
Mid/Small Company Index	Mellon Capital Management Corporation		0.04	%		78,085
Overseas Equity Index	Mellon Capital Management Corporation		0.07	%		99,063

 

(1) Terminated as a subadviser on January 31, 2009.

(2) Began serving as a subadviser on January 21, 2009.

(3) Terminated as a subadviser on October 11, 2009. Minimum fee of $337,500 per year.

(4) Began serving as a subadviser on October 12, 2009.

(5) Terminated as a subadviser on April 10, 2009.

(6) Began serving as a subadviser to this portion of the fund on April 3, 2009.

G. Directors’ Consideration of Investments Advisory and Subadvisory Agreements

The following relates to the consideration by the Board of Directors of the Company (“Directors” or “Board”), during the period beginning July 1, 2009 through December 31, 2009, of the approval of the Second Master Investment Advisory Agreements between VIA and the Milestone 2045 Fund and certain Investment Subadvisory Agreements for the funds.

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Consideration of the Investment Advisory Agreements and Certain Subadvisory Agreements.

Vantagepoint Milestone 2045 Fund

At a meeting held on September 25, 2009 (“September Meeting”), the Board, including a majority of the Directors who are not “interested persons” as defined in the Investment Company Act of 1940 (“Independent Directors”), initially approved the Second Master Investment Advisory Agreement (“Master Agreement”) between the Company and VIA for the Vantagepoint Milestone 2045 Fund, a new series of the Company (“Milestone 2045 Fund”). Before approving the Master Agreement, the Board considered the recommendations of, and supporting analyses and data presented by, VIA.

With respect to the Board’s initial approval of the Master Agreement between the Company and VIA for the Milestone 2045 Fund, the Directors received written information in advance of the September Meeting, including information regarding: (1) the nature, quality and extent of the services to be provided by VIA; (2) the adequacy of the compliance program that is in place that would relate to the Milestone 2045 Fund; (3) the level of investment advisory fees to be charged by VIA and the fees charged by VIA to each of the other seven series of the Company with a target-date designated in its name (“Dated Milestone Fund Series”); (4) VIA’s experience as investment adviser to the other series of the Company and with respect to the investment strategies to be employed by the Milestone 2045 Fund; (5) the Milestone 2045 Fund’s overall investment advisory fee and expected total expense ratio compared to a group of investment companies categorized by Morningstar, Inc., a provider of independent investment company data (“Morningstar”), as 2041-2045 target-date funds (“Milestone 2045 peer group”); and (6) the expected costs of the services to be provided and net margins (“profit margin”) to be realized by VIA and its affiliates from its relationship with the Milestone 2045 Fund.

In considering the information and materials described above, the Independent Directors received assistance from, and met separately with, their independent legal counsel and were provided with a written description of their statutory responsibilities and the legal standards that are applicable to approvals of advisory agreements.

In determining to approve the Master Agreement with VIA for the Milestone 2045 Fund, the Directors considered the information received in advance of the September Meeting, the presentations made by, and discussions held with, VIA’s personnel and the Company’s Chief Compliance Officer (“CCO”), prior to the September Meeting and at the September Meeting, as applicable, as well as a variety of factors. Although not meant to be all-inclusive, the following discusses some of the factors relevant to the Board’s decision to approve the Master Agreement with VIA relating to the Milestone 2045 Fund.

Nature, Extent and Quality of Services. With respect to the nature, extent and quality of the services expected to be provided by VIA to the Milestone 2045 Fund under the Master Agreement, the Directors considered the specific investment services to be provided, including the development of customized age and time appropriate asset allocations both initially and over time, the monitoring of the underlying funds’ performance and the monitoring of aging (glide) paths and underlying fund allocations, by VIA in managing the assets of the Milestone 2045 Fund. They also considered the experience of VIA’s investment staff with regard to managing the Dated Milestone Fund Series and the adequacy of the compliance program that would relate to the Milestone 2045 Fund. The Directors concluded that the nature, extent and quality of the investment advisory services expected to be provided by VIA were appropriate for the Milestone 2045 Fund in light of its investment objective and strategies and, thus, supported a decision to approve the Master Agreement with VIA relating to the Milestone 2045 Fund.

Investment Performance. At the time of the Board’s consideration of the Master Agreement, the Milestone 2045 Fund had not commenced operations and, therefore, there was no information for the Directors to evaluate regarding the Milestone 2045 Fund’s actual performance.

Advisory Fee, Expense Ratio and Economies of Scale. The Directors considered a comparison of the fee to be charged by VIA to the Milestone 2045 Fund with the fee VIA charges to the other Dated Milestone Fund Series. The Directors considered that the proposed fee for the Milestone 2045 Fund is the same as the fee for the Dated Milestone Fund Series; and the type of services VIA would provide to the Milestone 2045 Fund is comparable to the services currently provided by VIA to the Dated Milestone Fund Series. The Directors also considered comparative data provided by VIA on the advisory fees of the Milestone 2045 peer group. The information provided by VIA showed that the proposed investment advisory fee rate for the Milestone 2045 Fund would be lower than the average and at the median investment

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advisory fee of the Milestone 2045 peer group. The Directors also considered the comparative data provided by VIA with respect to the expected total expense ratio of the Milestone 2045 Fund as compared to the expense ratios of the Milestone 2045 peer group and further noted VIA’s proposed agreement to limit the total operating expenses of the Milestone 2045 Fund until April 30, 2010. The foregoing comparisons assisted the Directors in considering the Master Agreement relating to the Milestone 2045 Fund by providing them with a basis for evaluating the investment advisory fee to be paid to VIA and the Milestone 2045 Fund’s expected total expense ratio on a relative basis. Based on this information, the Directors concluded that the investment advisory fee appeared to be within a reasonable range for the services to be provided.

With respect to the expected costs and profit margins to be realized by VIA (and its affiliates) from its relationship with the Milestone 2045 Fund, the Directors considered the information provided by VIA, which stated that VIA expected to experience similar costs and margins as for the other Dated Milestone Fund Series once the Milestone 2045 Fund achieves a similar asset size. Based on this information, the Directors concluded that VIA may not realize economies of scale with regard to the Milestone 2045 Fund over the short-term and that the proposed fee is appropriate at this time.

Other Considerations. The Directors also considered the potential “fall-out” or ancillary benefits that may accrue to VIA due to its relationship with the Milestone 2045 Fund and that VIA does not expect any direct “fall-out” benefits by virtue of its relationship with the Milestone 2045 Fund. VIA indicated, however, that it may benefit from the enhancement to the set of the Vantagepoint Milestone Funds from a competitive perspective.

Conclusion. After full consideration of the foregoing factors, with no single factor identified as being of paramount importance, the Directors, including a majority of the Independent Directors, concluded that the initial approval of the Master Agreement with VIA relating to the Milestone 2045 Fund was the best interest of the Milestone 2045 Fund and its shareholders, and approved the Master Agreement with, and the fee to be paid to, VIA.

Vantagepoint International Fund

At the September Meeting, the Board, including a majority of the Independent Directors, approved an initial Investment Subadvisory Agreement (“International Subadvisory Agreement”) among the Company, VIA and Mondrian Investment Partners Limited (“Mondrian”), relating to the Vantagepoint International Fund (“International Fund”). Also at the September Meeting, VIA recommended and the Board approved the termination of Capital Guardian Trust Company (“Capital Guardian”) as subadviser to the International Fund. Before approving the appointment of Mondrian as a subadviser to the International Fund, the Board of the Company considered the recommendations of, and supporting analyses and data presented by, VIA.

With respect to the Board’s consideration of the International Subadvisory Agreement with Mondrian, the Directors received written information in advance of the September Meeting from VIA, which included: (1) the process by which VIA selected and recommended for Board approval Mondrian as a subadviser to the International Fund; (2) the nature, extent and quality of the services that Mondrian would provide to the International Fund; (3) Mondrian’s experience, investment management business, personnel and operations; (4) Mondrian’s brokerage and trading policies and practices; (5) the level of the subadvisory fee to be charged to the International Fund by Mondrian and a comparison of that fee to the: (a) fees charged by Mondrian to manage other foreign large cap value accounts; and (b) fees charged by a group of U.S. separate account investment managers utilizing an active international large cap value style; (6) Mondrian’s compliance program; (7) the performance information for Mondrian with respect to a foreign large cap value mandate, and such performance compared to a relevant benchmark and peer group; (8) the International Fund’s expected overall investment advisory fee and projected total expense ratio, taking into account the change in subadvisers, compared to a group of foreign large cap blend funds; and (9) Mondrian’s financial condition.

In considering the information and materials described above, the Independent Directors received assistance from, and met separately with, their independent legal counsel and were provided with a written description of their statutory responsibilities and the legal standards that are applicable to approvals of advisory agreements.

In determining whether to approve the International Subadvisory Agreement, the Directors considered the information received in advance of the September Meeting, the presentations made by, and discussions held with, representatives of Mondrian, VIA’s personnel and the Company’s CCO prior to the September Meeting and at the September Meeting, as applicable, as well as a variety of factors. Although not meant to be all-inclusive, the following discusses some of the factors relevant to the Board’s decision to approve the International Subadvisory Agreement.

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Nature, Extent and Quality of Services. With respect to the nature, extent and quality of the services expected to be provided by Mondrian under the International Subadvisory Agreement, the Directors considered the specific investment process to be employed by Mondrian in managing the assets of the International Fund to be allocated to it; the qualifications of Mondrian’s investment management personnel with regard to implementing a foreign large cap value mandate; the performance information for Mondrian with respect to a foreign large cap value mandate as compared to a relevant benchmark and peer group; Mondrian’s infrastructure and whether it appeared to adequately support a foreign large cap value strategy; and VIA’s review process and favorable assessment as to the nature, quality and extent of the subadvisory services expected to be provided by Mondrian to the International Fund. The Directors acknowledged that Mondrian has experienced portfolio management personnel and appeared to have adequate infrastructure and support staff to seek to achieve favorable results implementing a foreign large cap value mandate for the International Fund. The Directors concluded that the nature, extent and quality of the subadvisory services expected to be provided by Mondrian were appropriate for the International Fund in light of its investment strategy and, thus, supported a decision to approve the International Subadvisory Agreement.

Investment Performance. The Directors evaluated the investment performance information provided by VIA for Mondrian, and considered the performance information versus a relevant benchmark and peer group (based on information provided by an independent third-party source). The Directors concluded that the performance information provided supported approval of the International Subadvisory Agreement with Mondrian.

Subadvisory Fee, Expense Ratio Impact and Economies of Scale. In evaluating the proposed subadvisory fee, the Directors reviewed Mondrian’s subadvisory fee schedule. The Directors considered comparisons of the subadvisory fee to be charged by Mondrian to the International Fund with its fee schedule for managing other accounts with an investment mandate similar to the mandate Mondrian is to employ on behalf of the International Fund. The Directors also considered that, according to the information provided by VIA, the proposed fee schedule for Mondrian reflected the lowest fee rate currently charged by Mondrian to other accounts for which it provides advisory services utilizing a similar mandate, with the exception of a separate account that was the initial client in the strategy. Additionally, the nature of the subadvisory services Mondrian is to provide to the International Fund appeared to be comparable to those Mondrian currently provides to its other subadvisory clients.

The Directors reviewed information provided by VIA (which was based on an independent third-party source) on the fees charged to accounts with assets comparable to the amount of assets to be allocated initially to Mondrian to a group of U.S. separate account investment managers that employ a similar investment style to the investment style Mondrian is to employ for the International Fund. According to the information provided, the effective fee rate to be paid by the International Fund to Mondrian at the proposed initial asset allocation level for Mondrian would be below the median fee charged by such managers.

The Directors also considered information from VIA showing that there would be no increase in the overall contractual subadvisory fees and, therefore, no increase in the total expense ratio of the International Fund as a result of the appointment of Mondrian and the termination of Capital Guardian and given the fee rates of the International Fund’s other three subadvisers and the proposed asset allocation levels. Referring to data provided by VIA and compiled by Morningstar, the Directors also noted that the expected total contractual investment advisory fee for the International Fund, taking into account the proposed subadviser change, was lower than the average and median investment advisory fee of a group of mutual funds in Morningstar’s foreign large cap blend category. The Directors also considered information provided by VIA and compiled by Morningstar on the total expense ratios of a group of mutual funds in Morningstar’s foreign large cap blend category, which showed that, if Mondrian served as a subadviser to the International Fund at the proposed subadvisory fee rate and initial asset allocation level, along with the International Fund’s three other existing subadvisers at their current subadvisory fee rates and based on their proposed asset allocation levels, the International Fund’s expected total expense ratio would be below the average and median expense ratios of such funds.

The foregoing comparisons assisted the Directors in considering the International Subadvisory Agreement by providing them with a basis for evaluating Mondrian’s fee, including in light of the International Fund’s expected overall investment advisory fee and total expense ratio, on a relative basis. Based on this information, the Directors concluded that Mondrian’s subadvisory fee appeared to be within a reasonable range for the services to be provided.

The Directors also reviewed the information provided by Mondrian regarding the estimated profits to be realized from its relationship with the International Fund. In reviewing the extent to which economies of scale may be realized by

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Mondrian as the assets of the International Fund to be managed by it grow, and whether the proposed fee levels reflect these economies, the Directors considered that Mondrian’s proposed fee schedule included breakpoints, which indicates that the proposed subadvisory fee rate is intended to capture certain anticipated economies of scale for the benefit of the International Fund’s shareholders in connection with the services to be provided. The Directors concluded that the proposed fee schedule with respect to Mondrian was appropriate at this time.

Other Considerations. The Directors considered VIA’s judgment that the addition of Mondrian as a subadviser to the International Fund would add value by complementing the investment approach of the International Fund’s current subadvisers, Artisan Partners Limited Partnership, GlobeFlex Capital L.P. and Walter Scott & Partners Limited. In this regard, the Directors considered VIA’s belief that the addition of Mondrian as a subadviser, along with VIA’s recommendation to terminate Capital Guardian and to modify the amount of the International Fund’s assets currently allocated to the existing subadvisers, should serve to enhance the International Fund’s risk/return profile, resulting in higher and more consistent expected returns.

The Directors considered the selection and due diligence process employed by VIA in deciding to recommend Mondrian as a subadviser to the International Fund and also considered VIA’s conclusion that the fee to be paid to Mondrian for its services to the International Fund is reasonable and appropriate in light of the nature and quality of services to be provided by Mondrian and the reasons supporting that conclusion. The Directors also considered information from VIA concerning its strategy to efficiently implement the subadviser transition. The Directors concluded that VIA’s recommendations and conclusions supported approval of the International Subadvisory Agreement.

The Directors also considered the potential “fall-out” or ancillary benefits that may accrue to Mondrian due to its relationship with the International Fund. The Directors considered that Mondrian may direct the International Fund’s brokerage transactions to certain brokers to obtain research and other services. However, the Directors noted that all subadvisers are required to select brokers who meet the International Fund’s requirements for seeking best execution, and that VIA monitors and evaluates the subadvisers’ trade execution with respect to International Fund brokerage transactions on a regular basis and provides reports to the Board in this regard. In addition, Mondrian indicated that it may receive fall-out benefits from its relationship with the International Fund through the possibility of increased business due to the additional exposure Mondrian would receive by serving as subadviser to the International Fund. The Directors concluded that the potential benefits that may accrue to Mondrian by virtue of its relationship with the International Fund appeared to be reasonable.

Conclusion. After full consideration of the foregoing factors, with no single factor identified as being of paramount importance, the Directors, including a majority of the Independent Directors, concluded that the initial approval of the International Subadvisory Agreement was in the best interests of the International Fund and its shareholders, and approved the International Subadvisory Agreement with, and the fee to be paid to, Mondrian.

Vantagepoint Diversified Assets Fund

Approval of Amended Fee Schedule with Payden & Rygel. At the September Meeting, the Board, including a majority of the Independent Directors, approved an amendment, effective September 28, 2009, to the fee schedule (“Amended Fee Schedule”) to the Investment Subadvisory Agreement (“Payden Subadvisory Agreement”) among the Company, VIA and Payden and Rygel (“Payden”), relating to the Vantagepoint Diversified Assets Fund (“Diversified Assets Fund”), in connection with Payden providing investment subadvisory services to the Diversified Assets Fund utilizing its low duration fixed income strategy on an ongoing basis. Payden has served as a subadviser to the Diversified Assets Fund since its inception utilizing a short duration fixed income strategy, and has also served as a subadviser to the Diversified Assets Fund on an interim basis since April 3, 2009, utilizing a low duration fixed income strategy. On March 27, 2009, the Board approved: (i) Payden to manage the assets of the Diversified Assets Fund formerly managed by a different subadviser, Drake Capital Management, LLC (“Drake”), pursuant to a low duration fixed income mandate on an interim basis, while VIA considered Payden, as well as other investment subadvisers, to manage the assets formerly allocated to Drake on an ongoing basis; and (ii) a related amendment to the fee schedule of the Payden Subadvisory Agreement. At the September Meeting, VIA recommended to the Board that Payden continue to manage the portion of the Diversified Assets Fund’s assets allocated to it utilizing its low duration fixed income strategy on an ongoing basis and that the Board approve the Amended Fee Schedule. Before approving the Amended Fee Schedule, the Board of the Company considered the recommendations of, and supporting analyses and data presented by, VIA.

With respect to the Board’s consideration of the Amended Fee Schedule, the Directors received written information in advance of the September Meeting from VIA, which included: (1) VIA’s rationale for recommending to the Board

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that Payden continue to manage the portion of the Diversified Assets Fund’s assets allocated to it pursuant to a low duration fixed income strategy on an ongoing basis; (2) the nature, extent and quality of the services that Payden would provide to the Diversified Assets Fund; (3) Payden’s experience, investment management business, personnel and operations; (4) Payden’s brokerage and trading policies and practices; (5) the level of the subadvisory fee to be charged to the Diversified Assets Fund by Payden for managing Fund assets pursuant to a low duration fixed income strategy and a comparison of that fee to the: (a) fees charged by Payden for managing other comparable accounts; and (b) fees charged by a group of U.S. separate account investment managers utilizing a short duration fixed income mandate (which includes low duration fixed income mandates); (6) Payden’s historical performance returns utilizing a low duration fixed income mandate and such performance compared to a relevant benchmark and peer group; (7) the Diversified Assets Fund’s expected overall investment advisory fee and projected total expense ratio, taking into account the Amended Fee Schedule, compared to a group of long-short funds; and (8) Payden’s financial condition.

In considering the information and materials described above, the Independent Directors received assistance from, and met separately with, their independent legal counsel and were provided with a written description of their statutory responsibilities and the legal standards that are applicable to approvals of advisory agreements.

In determining whether to approve the Amended Fee Schedule, the Directors considered the information received in advance of the September Meeting and discussions held with VIA’s personnel and the Company’s CCO, as well as a variety of factors. Although not meant to be all-inclusive, the following discusses some of the factors relevant to the Board’s decision to approve the Amended Fee Schedule.

Nature, Extent and Quality of Services. With respect to the nature, extent and quality of the services expected to be provided by Payden with respect to its low duration fixed income strategy, the Directors considered the specific investment process to be employed by Payden in managing the Diversified Assets Fund’s assets pursuant to this strategy; the qualifications of Payden’s investment management team with regard to implementing a low duration fixed income mandate; Payden’s overall favorable performance record as compared to a relevant benchmark and peer group; Payden’s infrastructure and whether it appeared to adequately support a low duration fixed income strategy; and VIA’s rationale and favorable assessment as to the nature, quality and extent of the subadvisory services expected to be provided by Payden to the Diversified Assets Fund on an ongoing basis with respect to a low duration fixed income strategy. The Directors acknowledged that Payden has a successful performance record as a low duration fixed income manager; has an experienced portfolio management team; and appears to have adequate infrastructure and support staff to seek to achieve favorable results implementing a low duration fixed income mandate for the Diversified Assets Fund. The Directors concluded that the nature, extent and quality of the subadvisory services expected to be provided by Payden with respect to employing a low duration fixed income strategy on an ongoing basis were appropriate for the Diversified Assets Fund in light of its investment strategy and, thus, supported a decision to approve the Amended Fee Schedule.

Investment Performance. The Directors evaluated Payden’s historical investment performance record in managing its clients’ assets utilizing a low duration fixed income mandate and considered the performance record versus a relevant benchmark and peer group (based on information provided by an independent third-party source). The Directors concluded that the overall historical investment performance record of Payden with respect to employing a low duration fixed income strategy supported approval of the Amended Fee Schedule.

Subadvisory Fee, Expense Ratio Impact and Economies of Scale. In evaluating the proposed subadvisory fee for the low duration fixed income strategy that Payden is to employ for the Diversified Assets Fund on an ongoing basis, the Directors reviewed Payden’s Amended Fee Schedule. The Directors considered comparisons of the subadvisory fee to be charged by Payden to the Diversified Assets Fund for the low duration fixed income mandate under the Amended Fee Schedule with its fee schedule for managing other accounts with an investment mandate similar to the low duration fixed income mandate Payden would continue to employ on behalf of the Diversified Assets Fund. The Directors also considered that, according to the information provided by VIA, the Amended Fee Schedule for Payden reflected the lowest fee rate currently charged by Payden to other accounts similar in size and mandate to the Diversified Assets Fund’s assets allocated to Payden with respect to its low duration fixed income mandate, and, according to the information provided by VIA, is lower than Payden’s standard fee schedule for managing accounts with a similar mandate. Additionally, the nature of the subadvisory services Payden is to provide to the Diversified Assets Fund appeared to be comparable to those Payden currently provides to its other subadvisory relationships.

The Directors reviewed information provided by VIA (which was based on an independent third-party source) on the fees charged to accounts with assets comparable to the amount of assets currently allocated to Payden with respect to

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the low duration fixed income mandate to a group of U.S. separate account investment managers that employ a similar investment style to the investment style Payden is to employ. According to the information provided, the effective fee rate to be paid by the Diversified Assets Fund to Payden for the low duration fixed income mandate at the current asset allocation level would be below the median fee charged by such managers.

The Directors also considered that there would be no increase in the overall contractual subadvisory fees and, therefore, no increase in the total expense ratio of the Diversified Assets Fund due to the Amended Fee Schedule. Referring to data provided by VIA and compiled by Morningstar, the Directors also noted that the expected total investment advisory fee for the Diversified Assets Fund, taking into account the subadvisory fee to be paid to Payden under the Amended Fee Schedule, was lower than the average and median investment advisory fee of a group of mutual funds in Morningstar’s long-short category. The Directors also considered information provided by VIA and compiled by Morningstar on the total expense ratios of a group of mutual funds in Morningstar’s long-short category, which showed that, if Payden continued to manage a low duration fixed income mandate for the Diversified Assets Fund at the current asset allocation level, but under the Amended Fee Schedule, and taking into account the Diversified Assets Fund’s other existing subadvisory arrangements and current subadvisory fee rates, the Diversified Assets Fund’s expected total expense ratio would be below the average and median expense ratios of such funds.

The foregoing comparisons assisted the Directors in considering the Amended Fee Schedule by providing them with a basis for evaluating Payden’s fee for managing the Diversified Assets Fund’s assets pursuant to a low duration fixed income strategy on an ongoing basis, including in light of the Diversified Assets Fund’s expected overall investment advisory fee and total expense ratio, on a relative basis. Based on this information, the Directors concluded that Payden’s subadvisory fee under the Amended Fee Schedule for managing the low duration fixed income mandate for the Diversified Assets Fund appeared to be within a reasonable range for the services to be provided.

The Directors also reviewed the information provided by Payden regarding the estimated profits to be realized from its relationship with the Diversified Assets Fund for managing the assets of the Diversified Assets Fund pursuant to a low duration fixed income mandate under the Amended Fee Schedule. In reviewing the extent to which economies of scale may be realized by the Diversified Assets Fund as the assets of the Diversified Assets Fund to be managed by Payden in the low duration fixed income mandate grow, and whether the proposed fee levels reflect these economies, the Directors considered that Payden’s Amended Fee Schedule for this mandate included breakpoints, which indicates that the proposed subadvisory fee rate is intended to capture certain anticipated economies of scale for the benefit of the Diversified Assets Fund’s shareholders in connection with the services to be provided. The Directors concluded that Payden’s Amended Fee Schedule for managing the assets of the Diversified Assets Fund on an ongoing basis pursuant to a low duration fixed income mandate was appropriate at this time.

Other Considerations. The Directors considered VIA’s judgment that Payden’s experience in managing a low duration fixed income mandate is expected to add value by contributing positively to the Diversified Assets Fund’s performance while controlling risk. The Directors also considered their experience with Payden as a current subadviser to the Diversified Assets Fund and certain other series of the Company, as well as Payden’s familiarity with the Diversified Assets Fund and other series of the Company.

The Directors considered the selection and due diligence process employed by VIA in deciding to recommend that Payden provide ongoing subadvisory services to the Diversified Assets Fund with respect to the low duration fixed income mandate and also considered VIA’s conclusion that the fee to be paid by the Diversified Assets Fund to Payden under the Amended Fee Schedule for managing the Diversified Assets Fund’s assets pursuant to this strategy is reasonable and appropriate in light of the nature and quality of services to be provided by Payden and the reasons supporting that conclusion. The Directors concluded that VIA’s recommendations and conclusions supported approval of the Amended Fee Schedule.

The Directors also considered the potential “fall-out” or ancillary benefits that may accrue to Payden due to its relationship with the Diversified Assets Fund. The Directors considered that Payden does not anticipate any such benefits due to its relationship with the Diversified Assets Fund.

Conclusion. After full consideration of the foregoing factors, with no single factor identified as being of paramount importance, the Directors, including a majority of the Independent Directors, concluded that the approval of the Amended Fee Schedule was in the best interests of the Diversified Assets Fund and its shareholders, and approved the Amended Fee Schedule and the fee to be paid to Payden for managing Diversified Assets Fund assets pursuant to a low duration fixed income strategy on an ongoing basis.

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Vantagepoint Diversified Assets Fund

Approval of New Subadvisory Agreements. Also at the September Meeting, VIA recommended, and the Board approved, the implementation of an additional principal investment strategy for the Diversified Assets Fund, effective January 4, 2010. The additional principal investment strategy provides that the Diversified Assets Fund allocate a portion of its assets to a portfolio of convertible securities of U.S. or foreign companies (which may include those in emerging markets) or replicate exposure to convertible securities by using a combination of either convertible or non-convertible bonds with common stock or equity options (“convertible securities strategy”). In connection with the approval of the convertible securities strategy, the Board, including a majority of the Independent Directors, approved, effective January 4, 2010, two initial Investment Subadvisory Agreements (each a “Diversified Assets Subadvisory Agreement”) among the Company, VIA and each of Calamos Advisors LLC (“Calamos”) and Shenkman Capital Management, Inc. (“Shenkman”), relating to the Diversified Assets Fund. Before approving the appointment of Calamos and Shenkman as subadvisers to the Diversified Assets Fund, the Board of the Company considered the recommendations of, and supporting analyses and data presented by, VIA.

With respect to the Board’s consideration of the respective Diversified Assets Subadvisory Agreements with Calamos and Shenkman, the Directors received written information in advance of the September Meeting from VIA, which included: (1) VIA’s rationale for the convertible securities strategy for the Diversified Assets Fund; (2) the process by which VIA selected and recommended for Board approval Calamos and Shenkman as subadvisers of the Diversified Assets Fund to implement the convertible securities strategy; (3) the nature, extent and quality of the services that Calamos and Shenkman would be expected to provide to the Diversified Assets Fund; (4) each of Calamos’ and Shenkman’s experience, investment management business, personnel and operations; (5) each of Calamos’ and Shenkman’s brokerage and trading policies and practices; (6) the level of the subadvisory fees to be charged to the Diversified Assets Fund by Calamos and Shenkman and a comparison of those fees to the: (a) fees charged by each of Calamos and Shenkman for managing other comparable accounts; and (b) fees charged by a group of U.S. separate account investment managers utilizing an active convertible securities strategy; (7) Calamos’ and Shenkman’s respective compliance programs; (8) Calamos’ and Shenkman’s respective historical performance returns utilizing: (i) a global convertible securities mandate with respect to Calamos; and (ii) a convertible securities bond mandate with respect to Shenkman, and such performance compared to a relevant benchmark and peer group; (9) the Diversified Assets Fund’s expected overall investment advisory fee and projected total expense ratio, taking into account the proposed new subadvisory arrangement, compared to a group of long-short funds; and (10) each of Calamos’ and Shenkman’s financial condition.

In considering the information and materials described above, the Independent Directors received assistance from, and met separately with, their independent legal counsel and were provided with a written description of their statutory responsibilities and the legal standards that are applicable to approvals of advisory agreements.

In determining whether to approve each Diversified Assets Subadvisory Agreement, the Directors considered the information received in advance of the September Meeting, the presentations made by, and discussions held with, representatives of Calamos and Shenkman, VIA’s personnel and the Company’s CCO prior to the September Meeting and at the September Meeting, as applicable, as well as a variety of factors. Although not meant to be all-inclusive, the following discusses some of the factors relevant to the Board’s decision to approve the Diversified Assets Subadvisory Agreements.

Nature, Extent and Quality of Services. With respect to the nature, extent and quality of the services expected to be provided by Calamos and Shenkman under their respective Diversified Assets Subadvisory Agreements, the Directors considered the specific investment process to be employed by each of Calamos and Shenkman in managing the assets of the Diversified Assets Fund to be allocated to them; the qualifications of Calamos’ and Shenkman’s respective investment management personnel with regard to implementing a global convertible securities mandate and convertible securities bond mandate, respectively; each of Calamos’ and Shenkman’s overall favorable performance record as compared to a relevant benchmark and peer group; each of Calamos’ and Shenkman’s infrastructure and whether it appeared to adequately support a global convertible securities strategy and a convertible securities bond strategy, respectively; and VIA’s review process and favorable assessment as to the nature, quality and extent of the subadvisory services expected to be provided by each of Calamos and Shenkman to the Diversified Assets Fund. The Directors acknowledged that Calamos and Shenkman each has a successful performance record as a global convertible securities strategy manager and convertible securities bond strategy manager, respectively; and Calamos and Shenkman each has

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experienced portfolio management personnel and appeared to have adequate infrastructure and support staff to seek to achieve favorable results implementing a global convertible securities strategy and a convertible securities bond strategy, respectively, for the Diversified Assets Fund. The Directors concluded that the nature, extent and quality of the subadvisory services expected to be provided by each of Calamos and Shenkman were appropriate for the Diversified Assets Fund in light of its new convertible securities strategy, effective January 4, 2010, and, thus, supported a decision to approve each Diversified Assets Subadvisory Agreement.

Investment Performance. The Directors evaluated Calamos’ and Shenkman’s historical investment performance record in managing their clients’ assets utilizing a global convertible securities mandate with respect to Calamos and a convertible securities bond mandate with respect to Shenkman and considered each performance record versus a relevant benchmark and peer group (based on information provided by an independent third-party source). The Directors concluded that the historical investment performance record of each of Calamos and Shenkman supported approval of each Diversified Assets Subadvisory Agreement.

Subadvisory Fees, Expense Ratio Impact and Economies of Scale. In evaluating each proposed subadvisory fee, the Directors reviewed Calamos’ and Shenkman’s respective subadvisory fee schedules. The Directors considered comparisons of the subadvisory fee to be charged by each of Calamos and Shenkman to the Diversified Assets Fund with its respective fee schedule for managing other accounts with an investment mandate similar to the mandate the subadviser is to employ on behalf of the Diversified Assets Fund. The Directors also considered that, according to the information provided by VIA, the proposed fee schedule for each of Calamos and Shenkman: (i) reflected the lowest fee rate currently charged by the subadviser to other accounts for which it provides advisory services utilizing a similar mandate; and (ii) is lower than its standard fee schedule for managing accounts with a similar mandate. Additionally, the nature of the subadvisory services each of Calamos and Shenkman is to provide to the Diversified Assets Fund appeared to be comparable to those each subadviser currently provides to its other subadvisory relationships.

The Directors reviewed information provided by VIA (which was based on an independent third-party source) on the fees charged to accounts with assets comparable to the amount of assets to be allocated initially to each of Calamos and Shenkman by a group of U.S. separate account investment managers that employ a similar investment style to the investment style each subadviser is to employ for the Diversified Assets Fund. According to the information provided, the effective fee rate to be paid by the Diversified Assets Fund to each of Calamos and Shenkman at the proposed initial asset allocation levels would be below the median fee charged by such managers.

The Directors also considered that there would be no increase in the overall contractual subadvisory fees to be paid by the Diversified Assets Fund and, therefore, no increase in the total expense ratio of the Diversified Assets Fund as a result of the appointment of each of Calamos and Shenkman. Referring to data provided by VIA and compiled by Morningstar, the Directors also noted that the expected total investment advisory fee for the Diversified Assets Fund, taking into account the proposed subadviser changes, was lower than the average and median investment advisory fee of a group of mutual funds in Morningstar’s long-short category. The Directors also considered information provided by VIA and compiled by Morningstar on the total expense ratios of a group of mutual funds in Morningstar’s long-short category, which showed that, if Calamos and Shenkman each served as a subadviser to the Diversified Assets Fund at the proposed subadvisory fee rate and initial asset allocation level, along with the Diversified Assets Fund’s three other existing subadvisers at their current subadvisory fee rates, the Diversified Assets Fund’s expected total expense ratio would be below the average and median expense ratios of such funds.

The foregoing comparisons assisted the Directors in considering each Diversified Assets Subadvisory Agreement by providing them with a basis for evaluating Calamos’ and Shenkman’s fees, including in light of the Diversified Assets Fund’s expected overall investment advisory fee and total expense ratio, on a relative basis. Based on this information, the Directors concluded that the subadvisory fee of Calamos and Shenkman appeared to be within a reasonable range for the services to be provided.

With respect to the estimated profits to be realized by Calamos and Shenkman from their relationship with the Diversified Assets Fund, and in reviewing the extent to which economies of scale may be realized by Calamos and Shenkman as the assets of the Diversified Assets Fund to be managed by each subadviser grow and whether the proposed fee levels reflect these economies, the Directors considered that each subadviser’s proposed fee schedule included breakpoints, which indicates that each proposed subadvisory fee rate is intended to capture certain anticipated economies of scale for the benefit of the Diversified Assets Fund’s shareholders in connection with the services to be provided. The Directors concluded that each proposed fee schedule with respect to Calamos and Shenkman was appropriate at this time.

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Other Considerations. The Directors considered VIA’s judgment that the addition of the convertible securities strategy to the Diversified Assets Fund, and the addition of Calamos and Shenkman as subadvisers to the Diversified Assets Fund to implement the new convertible securities strategy, would add value by complementing the investment approach of the Diversified Assets Fund’s current investment subadvisers, Analytic Investors, LLC, Mellon Capital Management Corporation and Payden. In this regard, the Directors considered VIA’s belief that the addition of the convertible securities strategy to the Diversified Assets Fund, and the addition of each of Calamos and Shenkman as a subadviser, should serve to better diversify the Diversified Assets Fund with attractive risk/return attributes.

The Directors considered the selection and due diligence process employed by VIA in deciding to recommend Calamos and Shenkman as subadvisers to the Diversified Assets Fund to implement the convertible securities strategy and also considered VIA’s conclusion that the fee to be paid to each of Calamos and Shenkman for their respective services to the Diversified Assets Fund is reasonable and appropriate in light of the nature and quality of services to be provided by each subadviser and the reasons supporting that conclusion. The Directors concluded that VIA’s recommendations and conclusions supported approval of each Diversified Assets Subadvisory Agreement.

The Directors also considered the potential “fall-out” or ancillary benefits that may accrue to Calamos and Shenkman due to each subadviser’s relationship with the Diversified Assets Fund. The Directors considered that Calamos may direct the Diversified Assets Fund’s brokerage transactions to certain brokers to obtain research and other services. However, the Directors noted that all subadvisers are required to select brokers who meet the Diversified Assets Fund’s requirements for seeking best execution, and that VIA monitors and evaluates the subadvisers’ trade execution with respect to Diversified Assets Fund brokerage transactions on a regular basis and provides reports to the Board in this regard. With respect to Shenkman, the Board considered that Shenkman indicated that, by serving as subadviser to the Diversified Assets Fund, it may receive fall-out benefits from its relationship with the Diversified Assets Fund through the potential exposure of the firm and its products. The Directors concluded that the potential benefits that may accrue to Calamos and Shenkman by virtue of their relationships with the Diversified Assets Fund appeared to be reasonable.

Conclusion. After full consideration of the foregoing factors, with no single factor identified as being of paramount importance, the Directors, including a majority of the Independent Directors, concluded that the initial approval of each Diversified Assets Subadvisory Agreement with Calamos and Shenkman was in the best interests of the Diversified Assets Fund and its shareholders, and approved the Diversified Assets Subadvisory Agreement with, and the fee to be paid to, each of Calamos and Shenkman.

H. Householding

Only one copy of this Annual Report may be mailed to households, even if more than one person in a household is a shareholder of record, unless The Vantagepoint Funds have received instructions to the contrary. If you need additional copies of this Annual Report, please contact The Vantagepoint Funds toll free at 800-669-7400 or in writing at 777 North Capitol Street, NE, Suite 600, Washington, D.C. 20002. If you do not want this mailing of this Annual Report to be combined with those for other members of your household, contact The Vantagepoint Funds in writing at 777 North Capitol Street, NE, Suite 600, Washington, D.C. 20002 or toll free at 800-669-7400.

I. Other Available Information

A description of the Company’s proxy voting policies and procedures and the proxy voting record for the 12-month period ended June 30, 2009 are available without charge, upon request by calling 800-669-7400, on the Company’s website at www.icmarc.org, or by accessing the Securities and Exchange Commission’s website at www.sec.gov.

The Company files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; the Company’s Forms N-Q are available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.

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Wilshire®, the Wilshire Indexes^SM, Wilshire 5000 Total Market Index^SM, and Wilshire 4500 Completion Index^SM are service marks of Wilshire Associates Incorporated (“Wilshire”) and have been licensed for use by The Vantagepoint Funds, on behalf of the Broad Market Index Fund and the Mid/Small Company Index Fund, respectively. All content of the Wilshire Indexes^SM and the aforementioned indexes is ©2009 Wilshire Associates Incorporated, all rights reserved. Wilshire has no relationship with The Vantagepoint Funds, other than the licensing of the aforementioned indexes and its service marks for use in connection with these two Funds. Wilshire does not:

•   Sponsor, endorse, sell or promote the Funds.

•   Recommend that any person invest in the Funds or any other securities.

•   Have any responsibility or liability for or make any decisions about the timing, amount or pricing of the Funds.

•   Have any responsibility or liability for the administration, management or marketing of the Funds.

•   Consider the needs of the Funds or their shareholders in determining, composing or calculating the above indexes or have any obligation to do so.

Wilshire shall have no liability in connection with these Funds. Specifically, Wilshire makes no representation or warranty, express or implied, regarding:

•   The results to be obtained by the Funds, their shareholders or any other person in connection with the use of the above indexes and the data included in those indexes;

•   The accuracy or completeness of these indexes and any related data; or

•   The merchantability or the fitness for a particular purpose or use of these indexes and/or its related data.

Wilshire shall not have any liability for any errors, omissions or interruptions in the above indexes or related data. Under no circumstances will Wilshire be liable for any lost profits or indirect, punitive, special or consequential damages or losses, even if Wilshire knows that they might occur. The licensing agreement between The Vantagepoint Funds, on behalf of the Broad Market Index Fund and the Mid/Small Company Index Fund, and Wilshire is solely for the Funds’ benefit and not for the benefit of Fund shareholders or any other third parties.”

“Standard & Poor’s®”, “S&P®” , “S&P 500®”, “Standard & Poor’s 500®”, and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Vantagepoint Funds — 500 Index Fund. The Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the Fund.

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SCHEDULE OF INVESTMENTS

December 31, 2009

Vantagepoint Money Market Fund	Shares			Value
MUTUAL FUND—100.0%
Short-Term Investments Trust Liquid Assets Portfolio (Cost $452,107,065)		452,107,065	$	452,107,065
TOTAL INVESTMENTS—100.0%
(Cost $452,107,065)				452,107,065
Other assets less liabilities—0.0%				2,167,006
NET ASSETS—100.0%			$	454,274,071

 

See accompanying notes to financial statements.

215

SCHEDULE OF INVESTMENTS

December 31, 2009

Vantagepoint Low Duration
Bond Fund

Coupon Rate	Maturity Date		Face		Value
CORPORATE OBLIGATIONS—42.9%
Aerospace & Defense—0.6%
Boeing Co. (The)
1.875%	11/20/2012	†	$	2,960,000	$	2,929,059
Beverages—0.4%
Bottling Group LLC
6.950%	03/15/2014			975,000		1,122,878
Dr. Pepper Snapple Group, Inc.
1.700%	12/21/2011			1,060,000		1,059,445
						2,182,323
Capital Markets—1.4%
Bank of New York Mellon Corp. (The)
4.300%	05/15/2014			1,170,000		1,232,606
Goldman Sachs Group, Inc. (The) MTN
6.000%	05/01/2014			901,000		986,428
3.625%	08/01/2012			700,000		721,655
Macquarie Bank Ltd. (Australia)
2.600%	01/20/2012	ˆ		1,230,000		1,256,515
Morgan Stanley
6.000%	05/13/2014			700,000		753,364
4.200%	11/20/2014			720,000		721,290
Morgan Stanley, Series F MTN
2.373%	05/14/2010	#		700,000		705,096
TD Ameritrade Holding Corp.
4.150%	12/01/2014			1,140,000		1,125,191
						7,502,145
Chemicals—1.6%
Dow Chemical Co. (The)
7.600%	05/15/2014			4,385,000		4,994,349
4.850%	08/15/2012			2,700,000		2,839,336
Praxair, Inc.
1.750%	11/15/2012			570,000		564,882
						8,398,567
Commercial Banks—9.2%
Barclays Bank plc (United Kingdom)
5.450%	09/12/2012			4,940,000		5,345,648
2.700%	03/05/2012	ˆ		1,000,000		1,022,286
BB&T Corp. MTN
3.850%	07/27/2012			4,818,000		4,989,930
BB&T Corp., Series A MTN
3.375%	09/25/2013			700,000		706,130
Capital One Financial Corp.
7.375%	05/23/2014	†		4,130,000		4,680,550
Commonwealth Bank of Australia (Australia)
2.400%	01/12/2012	ˆ		1,404,000		1,440,246
ING Bank NV (Netherlands)
2.625%	02/09/2012	ˆ		1,700,000		1,738,121
M&T Bank Corp.
5.375%	05/24/2012	†		5,000,000		5,216,535
National Australia Bank Ltd. (Australia)
2.550%	01/13/2012	ˆ		1,665,000		1,690,583
Regions Financial Corp.
7.750%	11/10/2014			3,000,000		2,961,603
SunTrust Banks, Inc.
5.250%	11/05/2012	†		4,950,000		5,139,283
Swedbank AB (Sweden)
2.800%	02/10/2012	ˆ		900,000		919,866
Toronto-Dominion Bank (The) MTN (Canada)
1.516%	09/10/2010	#		EUR 750,000		1,080,493
US Bancorp
4.200%	05/15/2014		$	1,300,000	$	1,350,795
US Bancorp MTN
0.678%	05/06/2010	#		1,200,000		1,201,958
Wachovia Bank NA, Bank Note
7.800%	08/18/2010			1,750,000		1,826,356
Wachovia Corp.
0.406%	06/01/2010	#		3,280,000		3,282,755
Wells Fargo & Co.
5.300%	08/26/2011			1,240,000		1,313,781
5.250%	10/23/2012			1,000,000		1,068,271
Wells Fargo & Co., Series I MTN
3.750%	10/01/2014			660,000		658,764
						47,633,954
Communications Equipment—0.2%
Cisco Systems, Inc.
5.250%	02/22/2011			1,250,000		1,312,021
Computers & Peripherals—1.0%
Hewlett-Packard Co.
4.250%	02/24/2012			730,000		766,115
2.250%	05/27/2011			1,000,000		1,014,549
International Business Machines Corp.
4.950%	03/22/2011			1,250,000		1,305,381
2.100%	05/06/2013			2,170,000		2,167,396
						5,253,441
Consumer Finance—1.3%
American Express Credit Corp.
5.125%	08/25/2014	†		1,000,000		1,054,819
Caterpillar Financial Services Corp. MTN
5.750%	02/15/2012	†		900,000		971,941
HSBC Finance Corp.
6.375%	10/15/2011			3,150,000		3,351,515
John Deere Capital Corp., Series D MTN
0.984%	01/18/2011	#		1,170,000		1,177,486
						6,555,761
Containers & Packaging—0.1%
Ball Corp.
6.875%	12/15/2012			455,000		462,962
Diversified Consumer Services—0.1%
Yale University, Series B MTN
2.900%	10/15/2014			570,000		568,523
Diversified Financial Services—8.4%
American Express Travel Related Services Co., Inc.
5.250%	11/21/2011	ˆ†		6,000,000		6,294,882
Bank of America Corp.
6.500%	08/01/2016			900,000		969,087
4.875%	09/15/2012			3,910,000		4,099,651
4.875%	01/15/2013	†		1,000,000		1,040,688
4.375%	12/01/2010			1,240,000		1,280,409
BP Capital Markets plc (United Kingdom)
5.250%	11/07/2013			800,000		872,145
Citigroup, Inc.
6.375%	08/12/2014			1,000,000		1,047,947
1.973%	05/15/2018	#		7,186,000		6,687,349
CME Group, Inc.
5.750%	02/15/2014			4,850,000		5,309,668
Equifax, Inc.
4.450%	12/01/2014			240,000		241,468
General Electric Capital Corp.
5.900%	05/13/2014			680,000		735,837

See accompanying notes to financial statements.

216

SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

Vantagepoint Low Duration
Bond Fund

Coupon Rate	Maturity Date		Face		Value
CORPORATE OBLIGATIONS—(Continued)
General Electric Capital Corp., Series A
3.750%	11/14/2014		$	6,180,000	$	6,176,002
Hutchison Whampoa International 03/33 Ltd. (Cayman Islands)
5.450%	11/24/2010	ˆ		1,500,000		1,545,333
JPMorgan Chase & Co.
6.750%	02/01/2011			1,240,000		1,308,355
4.750%	05/01/2013	†		5,650,000		5,968,281
						43,577,102
Diversified Telecommunication Services—0.9%
AT&T, Inc.
4.850%	02/15/2014	†		600,000		638,572
Cellco Partnership/Verizon Wireless Capital LLC
5.550%	02/01/2014			400,000		434,508
3.750%	05/20/2011			1,000,000		1,031,512
Deutsche Telekom International Finance BV (Netherlands)
5.375%	03/23/2011			1,250,000		1,303,815
Verizon Global Funding Corp.
7.250%	12/01/2010			1,250,000		1,321,262
						4,729,669
Electric Utilities—1.6%
Commonwealth Edison Co., Series 105
5.400%	12/15/2011			1,400,000		1,496,508
Consumers Energy Co., Series D
5.375%	04/15/2013			850,000		913,363
Duke Energy Carolinas LLC
6.250%	01/15/2012			1,165,000		1,260,112
FPL Group Capital, Inc.
5.625%	09/01/2011			910,000		968,377
Midamerican Energy Holdings Co.
3.150%	07/15/2012			1,000,000		1,019,250
Pacific Gas & Electric Co.
4.200%	03/01/2011			1,000,000		1,032,219
1.206%	06/10/2010	#		1,500,000		1,506,195
						8,196,024
Electronic Equipment, Instruments & Components—0.1%
Thermo Fisher Scientific, Inc.
2.150%	12/28/2012	ˆ		640,000		631,616
Food & Staples Retailing—0.2%
Safeway, Inc.
5.800%	08/15/2012			1,000,000		1,080,702
Food Products—1.5%
Campbell Soup Co.
6.750%	02/15/2011			800,000		851,419
Kellogg Co.
5.125%	12/03/2012			1,000,000		1,086,001
Kraft Foods, Inc.
6.750%	02/19/2014			3,999,000		4,426,233
Unilever Capital Corp.
7.125%	11/01/2010			1,175,000		1,238,807
						7,602,460
Health Care Providers & Services—0.9%
Express Scripts, Inc.
5.250%	06/15/2012			1,100,000		1,169,532
WellPoint, Inc.
6.800%	08/01/2012		$	3,290,000	$	3,632,084
						4,801,616
Household Durables—0.2%
Fortune Brands, Inc.
3.000%	06/01/2012			1,170,000		1,160,266
Household Products—0.1%
Procter & Gamble Co. (The)
3.500%	02/15/2015			400,000		409,682
Industrial Conglomerates—0.2%
3M Co., Series E MTN
4.500%	11/01/2011			1,000,000		1,059,092
Insurance—2.9%
Allstate Corp. (The)
6.200%	05/16/2014			800,000		885,582
American International Group, Inc.
4.700%	10/01/2010	†		1,000,000		999,465
4.250%	05/15/2013			2,800,000		2,588,354
Berkshire Hathaway Finance Corp.
4.000%	04/15/2012			700,000		733,979
Metropolitan Life Global Funding I
5.125%	04/10/2013	ˆ		4,730,000		5,014,680
1.001%	06/25/2010	#ˆ		1,100,000		1,101,531
New York Life Global Funding
0.379%	06/16/2011	#ˆ		1,000,000		995,047
Prudential Financial, Inc.
6.200%	01/15/2015			1,423,000		1,532,624
Prudential Financial, Inc., Series D MTN
3.625%	09/17/2012	†		1,100,000		1,116,986
						14,968,248
Life Sciences Tools & Services—0.4%
Howard Hughes Medical Institute
3.450%	09/01/2014			1,100,000		1,115,809
Roche Holdings, Inc.
4.500%	03/01/2012	ˆ		853,000		896,382
						2,012,191
Machinery—0.2%
Ingersoll-Rand Global Holding Co. Ltd. (Bermuda)
1.773%	08/13/2010	#		845,000		844,311
Media—0.7%
Comcast Corp.
5.450%	11/15/2010			2,250,000		2,325,823
DirecTV Holdings LLC/DirecTV Financing Co., Inc.
4.750%	10/01/2014	ˆ		580,000		592,665
Viacom, Inc.
4.375%	09/15/2014	†		700,000		722,645
						3,641,133
Metals & Mining—2.8%
Alcoa, Inc.
6.000%	07/15/2013	†		5,525,000		5,824,831
Nucor Corp.
5.000%	06/01/2013			1,328,000		1,408,923
Rio Tinto Finance USA Ltd. (Australia)
5.875%	07/15/2013			6,974,000		7,531,215
						14,764,969

See accompanying notes to financial statements.

217

SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

Vantagepoint Low Duration
Bond Fund

Coupon Rate	Maturity Date		Face		Value
CORPORATE OBLIGATIONS—(Continued)
Multi-National—0.7%
European Investment Bank MTN (Supranational)
4.750%	04/15/2011			EUR 2,300,000	$	3,448,947
Oil, Gas & Consumable Fuels—1.0%
Chevron Corp.
3.450%	03/03/2012		$	1,800,000		1,871,748
ConocoPhillips
4.750%	02/01/2014			600,000		644,813
4.600%	01/15/2015			455,000		483,748
Shell International Finance BV (Netherlands)
5.625%	06/27/2011			1,860,000		1,981,893
						4,982,202
Paper & Forest Products—0.1%
Weyerhaeuser Co.
6.750%	03/15/2012			570,000		604,208
Pharmaceuticals—1.2%
Abbott Laboratories
5.600%	05/15/2011			1,150,000		1,220,132
Merck & Co., Inc.
1.875%	06/30/2011			2,100,000		2,120,561
Novartis Capital Corp.
4.125%	02/10/2014			310,000		326,172
Pfizer, Inc.
4.450%	03/15/2012			1,000,000		1,058,204
3.625%	06/03/2013			EUR    200,000		295,414
Wyeth
6.950%	03/15/2011			1,000,000		1,068,572
						6,089,055
Road & Rail—0.1%
Union Pacific Corp.
6.125%	01/15/2012			545,000		592,737
Software—0.6%
Microsoft Corp.
2.950%	06/01/2014			1,400,000		1,416,451
Oracle Corp.
5.000%	01/15/2011			1,547,000		1,609,137
						3,025,588
Specialty Retail—0.1%
GameStop Corp./GameStop, Inc.
8.000%	10/01/2012			325,000		338,406
Tobacco—2.1%
Altria Group, Inc.
8.500%	11/10/2013			5,319,000		6,151,918
Philip Morris International, Inc.
6.875%	03/17/2014			4,120,000		4,672,756
						10,824,674
TOTAL CORPORATE OBLIGATIONS
(Cost $213,343,585)						222,183,654
U.S. GOVERNMENT AGENCY OBLIGATIONS—5.7%
U.S. Government Agency Obligations—4.9%
Federal Farm Credit Bank
1.875%	12/07/2012		$	1,200,000	$	1,200,596
Federal Home Loan Bank
5.375%	08/19/2011			7,390,000		7,891,604
1.625%	01/21/2011			3,100,000		3,134,844
1.375%	05/16/2011	†		3,000,000		3,022,164
Federal Home Loan Mortgage Corp.
1.750%	06/15/2012			6,000,000		6,030,174
Federal National Mortgage Association
1.375%	04/28/2011			4,000,000		4,030,728
						25,310,110
U.S. Government Backed Corporate Obligations—0.8%
General Electric Capital Corp.
1.800%	03/11/2011	†		3,300,000		3,338,198
Western Corporate Federal Credit Union
1.750%	11/02/2012			980,000		976,268
						4,314,466
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $29,431,207)						29,624,576
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES—5.7%
U.S. Government Agency Mortgage-Backed Securities—5.7%
Federal Home Loan Mortgage Corp.
6.000%	11/01/2022			1,160,826		1,241,874
Federal Home Loan Mortgage Corp. REMICS
5.000%	06/15/2024			393,690		396,122
Federal National Mortgage Association
6.000%	09/01/2037			2,911,484		3,092,997
3.191%	09/01/2034	#		285,784		290,934
3.150%	09/01/2034	#		348,461		354,702
2.998%	10/01/2034	#		3,026,788		3,079,890
2.782%	10/01/2034	#		556,671		568,095
Government National Mortgage Association
6.500%	10/20/2037- 09/20/2038			9,945,218		10,609,931
6.000%	07/20/2038			4,333,699		4,595,573
4.500%	04/20/2024- 08/20/2035			5,126,533		5,318,442
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES
(Cost $28,821,794)						29,548,560
U.S. TREASURY OBLIGATIONS—4.9%
U.S. Treasury Bills—4.9%
U.S. Treasury Bill
0.394%	07/29/2010	†		8,000,000		7,990,160
0.386%	09/23/2010	†		10,000,000		9,976,570
0.316%	10/21/2010	‡‡		1,000,000		996,939
0.163%	04/29/2010	†		6,700,000		6,698,352
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $25,647,314)						25,662,021

See accompanying notes to financial statements.

218

SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

Vantagepoint Low Duration
Bond Fund

Coupon Rate	Maturity Date		Face		Value
MUNICIPAL OBLIGATIONS—1.6%
California General Obligation Bonds (California)
5.450%	04/01/2015		$	3,635,000	$	3,660,990
5.250%	04/01/2014			1,200,000		1,207,584
4.850%	10/01/2014			1,400,000		1,383,592
Citizens Property Insurance Corp. Revenue Bonds, Series 2007 A (Florida)
5.000%	03/01/2013			200,000		208,266
Citizens Property Insurance Corp. Revenue Bonds, Series 2009 A-1 (Florida)
5.000%	06/01/2012			1,700,000		1,776,194
TOTAL MUNICIPAL OBLIGATIONS
(Cost $8,116,444)						8,236,626
SOVEREIGN DEBT OBLIGATIONS—1.1%
Government Issued—1.1%
Caisse d’Amortissement de la Dette Sociale MTN (France)
4.250%	11/08/2010			1,200,000		1,234,242
Province of Ontario (Canada)
3.125%	09/08/2010			1,200,000		1,222,548
2.750%	02/22/2011	†		1,225,000		1,248,389
Province of Quebec, Series PJ (Canada)
6.125%	01/22/2011	†		1,700,000		1,797,512
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $5,371,051)						5,502,691
ASSET BACKED SECURITIES—16.6%
Automobile—8.4%
Ally Auto Receivables Trust
Series 2009-A, Class A2
1.320%	03/15/2012	ˆ		1,180,000		1,182,747
Bank of America Auto Trust
Series 2008-1A, Class A4
5.730%	01/20/2013	ˆ		2,630,000		2,762,079
Bank of America Auto Trust
Series 2009-2A, Class A2
1.160%	02/15/2012	ˆ		1,260,000		1,263,268
Bank of America Auto Trust
Series 2009-1A, Class A2
1.700%	12/15/2011	ˆ		510,000		512,681
BMW Vehicle Lease Trust
Series 2009-1, Class A2
2.040%	04/15/2011			2,900,000		2,915,976
BMW Vehicle Lease Trust
Series 2009-1, Class A1
0.792%	06/15/2010			973		973
Capital Auto Receivables Asset Trust
Series 2008-1, Class A4B
1.583%	07/15/2014	#		3,000,000		3,031,230
Capital Auto Receivables Asset Trust
Series 2007-1, Class A4B
0.273%	04/16/2012	#		1,000,000		994,730
Capital Auto Receivables Asset Trust
Series 2008-2, Class A3A
4.680%	10/15/2012			1,725,000		1,782,912
CarMax Auto Owner Trust
Series 2007-1, Class B
5.340%	10/15/2012			3,000,000		3,052,658
Chase Manhattan Auto Owner Trust
Series 2006-B, Class A4
5.110%	04/15/2014		$	1,929,673	$	1,974,179
Daimler Chrysler Auto Trust
Series 2008-B, Class A4A
5.320%	11/10/2014			2,000,000		2,093,877
Daimler Chrysler Auto Trust
Series 2008-A, Class A3A
3.700%	06/08/2012			1,295,761		1,316,741
Daimler Chrysler Auto Trust
Series 2006-C, Class A4
4.980%	11/08/2011			2,679,259		2,701,814
Ford Credit Auto Lease Trust
Series 2009-A, Class A2
2.600%	05/15/2011	ˆ		1,350,000		1,359,970
Ford Credit Auto Lease Trust
Series 2009-A, Class A1
1.237%	06/15/2010	ˆ		295,693		295,932
Ford Credit Auto Owner Trust
Series 2007-B, Class A4A
5.240%	07/15/2012			5,400,000		5,668,174
Ford Credit Auto Owner Trust
Series 2009-D, Class A2
1.210%	01/15/2012			900,000		902,633
Harley-Davidson Motorcycle Trust
Series 2006-3, Class A3
5.240%	01/15/2012			14,900		14,927
Harley-Davidson Motorcycle Trust
Series 2007-2, Class A4
5.120%	08/15/2013			2,725,000		2,843,921
Honda Auto Receivables Owner Trust
Series 2009-2, Class A2
2.220%	08/15/2011			1,300,000		1,308,951
Nissan Auto Lease Trust
Series 2009-A, Class A2
2.010%	04/15/2011			1,540,000		1,549,438
Nissan Auto Lease Trust
Series 2009-B, Class A2
1.220%	09/15/2011			1,130,000		1,131,800
USAA Auto Owner Trust
Series 2008-2, Class A3
4.640%	10/15/2012			1,007,562		1,036,292
USAA Auto Owner Trust
Series 2007-2, Class A3
4.900%	02/15/2012			705,085		714,181
Volkswagen Auto Lease Trust
Series 2009-A, Class A2
2.870%	07/15/2011			977,971		986,696
						43,398,780
Credit Card—8.2%
American Express Credit Account Master Trust
Series 2005-4, Class A
0.303%	01/15/2015	#		1,268,000		1,252,278
American Express Credit Account Master Trust
Series 2008-5, Class A
1.033%	03/15/2016	#		4,550,000		4,560,578
BA Credit Card Trust
Series 2008-A9, Class A9
4.070%	07/16/2012			1,650,000		1,656,781
BA Credit Card Trust
Series 2006-A15, Class A15
0.233%	04/15/2014	#		4,200,000		4,131,434
Capital One Multi-Asset Execution Trust
Series 2005-A10, Class A
0.313%	09/15/2015	#		1,000,000		981,484

See accompanying notes to financial statements.

219

SCHEDULE OF INVESTMENTS—(Continued)

December 31, 2009

Vantagepoint Low Duration
Bond Fund

Coupon Rate	Maturity Date		Face		Value
ASSET BACKED SECURITIES—(Continued)
Capital One Multi-Asset Execution Trust
Series 2007-A2, Class A2
0.313%	12/16/2019	#	$	2,500,000	$	2,317,363
Capital One Multi-Asset Execution Trust
Series 2008-A5, Class A5
4.850%	02/18/2014			2,550,000		2,662,278
Chase Issuance Trust
Series 2007-A9, Class A9
0.263%	06/16/2014	#		2,250,000		2,220,022
Citibank Credit Card Issuance Trust
Series 2009-A5, Class A5
2.250%	12/23/2014			4,230,000		4,188,044
Discover Card Master Trust
Series 2008-A3, Class A3
5.100%	10/15/2013			5,255,000		5,500,037
GE Capital Credit Card Master Note Trust
Series 2007-3, Class A2
5.400%	06/15/2013			5,915,000		6,032,897
GE Capital Credit Card Master Note Trust
Series 2007-4, Class A
0.283%	06/15/2015	#		500,000		484,508
Household Credit Card Master Note Trust I
Series 2007-2, Class A
0.783%	07/15/2013	#		6,400,000		6,376,448
						42,364,152
TOTAL ASSET BACKED SECURITIES
(Cost $83,657,838)						85,762,932
NON-GOVERNMENT MORTGAGE-BACKED SECURITIES—2.0%
Mortgage Backed—2.0%
Banc of America Mortgage Securities, Inc.
Series 2004-L, Class 1A1
4.874%	01/25/2035	#		892,623		792,163
GSR Mortgage Loan Trust Series 2005-AR6, Class 2A1
3.336%	09/25/2035	#		3,053,104		2,650,888
Harborview Mortgage Loan Trust Series 2005-14, Class 3A1A
5.315%	12/19/2035	#		3,856,560		2,906,543
MLCC Mortgage Investors, Inc.
Series 2004-1, Class 2A2
2.887%	12/25/2034	#		2,170,689		1,958,683
Provident Funding Mortgage Loan Trust
Series 2004-1, Class 1A1
3.195%	04/25/2034	#		331,969		309,338
Structured Asset Mortgage Investments, Inc.
Series 2004-AR5, Class 2A1
2.164%	10/19/2034	#		749,317		540,278
Thornburg Mortgage Securities Trust
Series 2004-1, Class II2A
3.133%	03/25/2044	#		667,833		581,431
Wells Fargo Mortgage Backed Securities Trust
Series 2004-S, Class B1
3.104%	09/25/2034	#		2,001,919		713,731
TOTAL NON-GOVERNMENT MORTGAGE-BACKED SECURITIES
(Cost $13,618,707)						10,453,055
NON-U.S. GOVERNMENT AGENCY OBLIGATIONS—1.4%
Non-U.S. Government Agency Obligations—1.4%
Export Development Canada (Canada)
3.750%	07/15/2011		$	1,365,000	$	1,418,030
Kreditanstalt fuer Wiederaufbau (Germany)
3.750%	06/27/2011			1,150,000		1,194,601
Nederlandse Waterschapsbank NV MTN (Netherlands)
4.625%	07/25/2011			EUR 1,500,000		2,251,455
Societe Financement de l’Economie Francaise (France)
2.125%	01/30/2012	ˆ		2,300,000		2,330,452
TOTAL NON-U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $7,063,072)						7,194,538
				Shares		Value
CASH EQUIVALENTS—26.0%
Institutional Money Market Funds—26.0%
Fidelity Institutional Money Market: Money Market Portfolio—Institutional Class				89,791,417		89,791,417
Fidelity Institutional Money Market: Money Market Portfolio—Institutional Class		††		8,708,153		8,708,153
Fidelity Institutional Money Market: Prime Money Market Portfolio— Institutional Class		††		9,000,000		9,000,000
Short-Term Investments Trust Liquid Assets Portfolio		††		9,000,000		9,000,000
Wells Fargo Advantage Cash Investment Money Market Fund—Select Class		††		9,020,800		9,020,800
Wells Fargo Advantage Heritage Money Market Fund—Select Class		††		9,000,000		9,000,000
TOTAL CASH EQUIVALENTS
(Cost $134,520,370)						134,520,370
TOTAL INVESTMENTS—107.9%
(Cost $549,591,382)						558,689,023
Other assets less liabilities—(7.9%)						(41,030,177	)
NET ASSETS—100.0%					$	517,658,846

 

Notes to the Schedule of Investments:
EUR	European Monetary Unit
MTN	Medium Term Note
REMICS	Real Estate Mortgage Investment Conduits
†	Denotes all or a portion of the security on loan.
ˆ	Securities are not registered under the Securities Act of 1933. These securities may be resold only in transactions exempt from registration, generally to qualified institutional buyers under Securities Act Rule 144A. 144A securities amounted to $34,846,882, which represents 6.2% of Total Investments.
#	Rate is subject to change. Rate shown reflects current rate.
‡‡	Security or a portion of the security has been pledged as collateral for futures contracts.
††	Represents reinvestment of collateral received in conjunction with securities lending.

 

See accompanying notes to financial statements.

220

SCHEDULE OF INVESTMENTS

December 31, 2009

Vantagepoint Inflation Protected
Securities Fund

Coupon Rate	Maturity Date		Face		Value
CORPORATE OBLIGATIONS—0.8%
Capital Markets—0.1%
Bear Stearns Cos. LLC (The), Series CPI MTN
0.510%	03/10/2014	#	$	380,000	$	353,932
Commercial Banks—0.0%
Royal Bank of Scotland Group plc, Perpetual Bond (United Kingdom)
7.092%	09/29/2017	#		EUR 100,000		72,753
Consumer Finance—0.2%
SLM Corp. MTN
0.334%	04/01/2014	#		465,000		347,443
SLM Corp., Series B MTN
0.000%	03/15/2010	#		325,000		324,864
						672,307
Diversified Financial Services—0.2%
Citigroup, Inc.
0.361%	05/18/2011	#		700,000		688,273
Insurance—0.2%
ASIF I, Series E MTN (Cayman Islands)
0.432%	07/26/2010	#		600,000		576,495
Multi-National—0.1%
International Bank for Reconstruction & Development, Series CPI (Supranational)
0.000%	12/10/2013	#		275,000		271,934
TOTAL CORPORATE OBLIGATIONS
(Cost $2,690,700)						2,635,694
U.S. GOVERNMENT AGENCY OBLIGATIONS—3.6%
U.S. Government Agency Obligations—2.2%
Federal Home Loan Mortgage Corp. Discount Notes
0.121%	03/02/2010			200,000		199,987
0.100%	03/24/2010			900,000		899,921
0.060%	02/18/2010			2,000,000		1,999,837
Federal National Mortgage Association Discount Notes
0.648%	02/17/2010			100,000		99,996
0.220%	03/17/2010			800,000		799,936
0.047%	02/01/2010			2,400,000		2,399,884
Tennessee Valley Authority
5.250%	09/15/2039	†		900,000		895,100
						7,294,661
U.S. Government Backed Corporate Obligations—1.4%
GMAC, Inc.
0.253%	12/19/2012	#		4,800,000		4,808,870
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $12,089,060)						12,103,531
U.S. TREASURY OBLIGATIONS—90.8%
U.S. Treasury Inflation Protected Securities Bonds—30.9%
U.S. Treasury Bond
3.875%	04/15/2029	†		7,845,000		13,307,061
3.625%	04/15/2028			3,540,000		5,859,986
3.375%	04/15/2032	†		510,000		769,812
2.500%	01/15/2029	†		9,215,000		9,975,003
2.375%	01/15/2025	‡‡	$	25,725,000	$	31,203,725
2.375%	01/15/2027			7,545,000		8,531,513
2.000%	01/15/2026	†		18,780,000		20,593,831
1.750%	01/15/2028			14,513,000		14,397,843
						104,638,774
U.S. Treasury Inflation Protected Securities Notes—59.9%
U.S. Treasury Note
4.250%	01/15/2010			2,568,660		2,573,917
3.500%	01/15/2011			1,610,000		2,076,754
3.375%	01/15/2012			2,840,000		3,702,318
3.000%	07/15/2012			22,061,000		28,551,003
2.625%	07/15/2017			3,925,000		4,507,485
2.500%	07/15/2016			3,015,000		3,518,596
2.375%	01/15/2017			20,405,000		23,652,259
2.375%	04/15/2011	†		2,810,000		3,154,659
2.125%	01/15/2019	†		5,415,000		5,790,464
2.000%	04/15/2012	†		1,935,000		2,156,734
2.000%	01/15/2014- 07/15/2014	†‡‡		37,900,000		46,340,404
2.000%	01/15/2016			10,280,000		11,837,965
1.875%	07/15/2019	†		4,535,000		4,772,966
1.875%	07/15/2013- 07/15/2015			23,979,000		29,184,385
1.625%	01/15/2015			11,075,000		13,055,661
1.625%	01/15/2018	†		11,155,000		11,801,195
1.375%	07/15/2018	†		4,160,000		4,185,347
1.250%	04/15/2014	†		300,000		317,095
0.625%	04/15/2013	†		1,775,000		1,848,303
						203,027,510
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $296,605,535)						307,666,284
SOVEREIGN DEBT OBLIGATIONS—0.2%
Government Issued—0.2%
Israel Government AID Bond (Israel)
5.500%	09/18/2023
(Cost $541,823)				500,000		533,871
				Shares		Value
CASH EQUIVALENTS—19.6%
Institutional Money Market Funds—19.6%
Fidelity Institutional Money Market: Money Market Portfolio—Institutional Class				12,236,181		12,236,181
Fidelity Institutional Money Market: Money Market Portfolio—Institutional Class		††		10,326,389		10,326,389
Fidelity Institutional Money Market: Prime Money Market Portfolio— Institutional Class		††		11,000,000		11,000,000
Short-Term Investments Trust Liquid Assets Portfolio		††		11,000,000		11,000,000
Wells Fargo Advantage Cash Investment Money Market Fund—Select Class		††		10,957,231		10,957,231
Wells Fargo Advantage Heritage Money Market Fund—Select Class		††		11,000,000		11,000,000
TOTAL CASH EQUIVALENTS
(Cost $66,519,801)						66,519,801

 

See accompanying notes to financial statements.

221

SCHEDULE OF INVESTMENTS

December 31, 2009

Vantagepoint Inflation Protected
Securities Fund

	Value
TOTAL INVESTMENTS—115.0%
(Cost $378,446,919)	$	389,459,181
Other assets less liabilities—(15.0%)		(50,669,574	)
NET ASSETS—100.0%	$	338,789,607

 

Notes to the Schedule of Investments:
EUR	European Monetary Unit
MTN	Medium Term Note
#	Rate is subject to change. Rate shown reflects current rate.
†	Denotes all or a portion of the security on loan.
‡‡	Security or a portion of the security has been pledged as collateral for futures contracts.
††	Represents reinvestment of collateral received in conjunction with securities lending.

 

See accompanying notes to financial statements.

222

SCHEDULE OF INVESTMENTS

December 31, 2009

Vantagepoint
Asset Allocation Fund

		Shares	Value
COMMON STOCKS—63.9%
Aerospace & Defense—1.8%
Boeing Co. (The)		20,474		$	1,108,258
General Dynamics Corp.		10,875			741,349
Goodrich Corp.		3,370			216,523
Honeywell International, Inc.		20,985			822,612
ITT Corp.		5,017			249,546
L-3 Communications Holdings, Inc.		3,273			284,587
Lockheed Martin Corp.		9,021			679,732
Northrop Grumman Corp.		8,853			494,440
Precision Castparts Corp.		3,999			441,290
Raytheon Co.		10,824			557,652
Rockwell Collins, Inc.		4,517			250,061
United Technologies Corp.		26,422			1,833,951
					7,680,001
Air Freight & Logistics—0.7%
C.H. Robinson Worldwide, Inc.		4,898			287,659
Expeditors International of Washington, Inc.	†	6,027			209,318
FedEx Corp.		8,814			735,528
United Parcel Service, Inc., Class B		28,083			1,611,122
					2,843,627
Airlines—0.1%
Southwest Airlines Co.		21,045			240,544
Auto Components—0.1%
Goodyear Tire & Rubber Co. (The)	*	6,976			98,362
Johnson Controls, Inc.		18,558			505,520
					603,882
Automobiles—0.2%
Ford Motor Co.	*†	91,344			913,440
Harley-Davidson, Inc.	†	6,777			170,780
					1,084,220
Beverages—1.7%
Brown-Forman Corp., Class B		3,112			166,710
Coca-Cola Co. (The)		65,263			3,719,991
Coca-Cola Enterprises, Inc.		8,881			188,277
Constellation Brands, Inc., Class A	*	5,953			94,831
Dr. Pepper Snapple Group, Inc.	†	7,149			202,317