NEW YORK, Aug. 18 /PRNewswire/ -- Most mutual funds aimed at teaching kids
about investing, or enabling parents to provide for their children's future
received a failing grade when Standard & Poor's last examined them in early
2003.  Since then, the picture hasn't improved much.  According to research
issued today by Standard & Poor's, the leading provider of independent
investment research, ratings and indices, the returns of the mutual funds
aimed at children either trailed that of their peers in 2003, through the
first seven months of 2004, or lagged in both periods.
    For the purpose of this year's review, Standard & Poor's looked again at
the group of mutual funds it highlighted last year, and found that the average
fund aimed at children or their parents has fallen 18% year-to-date through
July versus a decline of .92% for the S&P 500 over the same time period.
    There are two types of funds for children: those funds that provide
educational materials and newsletters aimed at teaching kids about the
benefits of saving and investing, and irrevocable trusts -- funds set up for
parents and others looking to make a gift.
    One of the funds aimed at teaching children about investing, Columbia
Young Investor Fund/Z (SRYIX), has experienced problems this year that have
gone way beyond its returns.  In February of this year, allegations emerged
that Columbia Funds engaged in improper fund trading.  Columbia's parent, Bank
of America (BAC), later paid $675 million to settle charges.  Year-to-date,
the fund has declined 1.7%.
    The Monetta group of funds also offers an investment program aimed at
encouraging parents to save for their children's college education while also
teaching them about money management.  Two of the company's stock funds,
Monetta Trust:Blue Chip Fund (MLCEX) and Monetta Trust:Mid Cap Equity Fund
(MMCEX), topped their peer groups in 2003, but trailed them through the first
seven months of 2004.  Of the two, the Blue Chip Fund has been hit the hardest
this year.  Through July, the fund has lost 11.9% versus a decline of 3.1% for
its large-cap growth peers.
    Another option for parents or grandparents looking to give gifts to
children are irrevocable trusts. Two of the funds in this category are
American Century Giftrust/Inv (TWGTX) and Royce Fund TrustShares/Inv (RGFAX).
Both funds have long minimum holding periods with American Century's fund
mandating that it be held at least 18 years, and Royce imposing a minimum
lock-up period of 10 years.
    Both the Royce and American Century funds trailed their peers last year,
with American Century also underperforming through July of this year.
American Century added portfolio manager David Rose, the former co-manager of
American Century Vista/Inv (TWCVX), to Giftrust last March to try to improve
its performance.  Though the Royce Fund lagged in 2003, it has a strong long-
term record. Managed by small-cap value veteran Charles Royce, the fund has
outperformed its peers over the past five years on an annualized basis.
    A table showing the performance of the five children's funds reviewed by
Standard & Poor's can be found at the end of this release.

    Fund Name                 Investment         YTD Returns       2003
                              Style              Through           Returns
                                                 7/30/04 (%)       (%)

    Columbia Young
     Investor Fund/Z
      (SRYIX)                 Large-cap Growth   -1.7              +27.4

    USAA First Start
     Growth Fund (UFSGX)      Large-Cap Growth   -4.0              +28.7

    Monetta Trust:
     Blue Chip Fund (MLCEX)   Large-Cap Growth  -11.9              +31.8

    American Century
     Giftrust/Inv (TWGTX)     Mid-Cap Growth     -4.7              +19.9

    Royce Fund
     TrustShares/Inv
      (RGFAX)                 Small-Cap Value    +4.3              +38.1


    Index & Peer Performance                     YTD Returns      2003
                                                 Through          Returns (%)
                                                 7/30/04 (%)
    S&P 500                                      -0.92
    Average Large-Cap Growth Fund                -3.1              +28.5
    Average Mid-Cap Growth Fund                  -2.7              +35.5
    Average Small-Cap Value Fund                 +2.6              +42.3

     Source: Standard & Poor's.
     Total returns are in U.S. dollars and include reinvested dividends.
     Data as of 7/30/04

    About Standard & Poor's
    Standard & Poor's is a leading global authority in funds research,
providing comprehensive information on more than 80,000 equity, bond, and
money market funds worldwide.  A team of more than 43 professionals in 10
countries who analyze funds carry out three basic types of activities relating
to mutual funds: fund selection, manager monitoring, and reporting and
evaluation.  In addition, Standard & Poor's also evaluates more than 17,000
U.S. mutual funds through its STARS ranking system.

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