NEW YORK, June 29 /PRNewswire/ -- In a review of the fees being levied
upon investors by equity mutual funds, Standard & Poor's -- a leading provider
of independent investment research, ratings and indices -- has determined that
funds with lower than average expense ratios are continuing to outperform
their more expensive peers over the long-term.  According to Standard & Poor's
database of over 17,000 U.S. mutual funds, funds charging smaller than average
fees to investors outperformed their more expensive counterparts in 8 out of
the 9 investment styles over a one-, three-, five-, and ten-year annualized
basis.  The only investment style to buck the trend is mid-cap blend, whose
five- and ten-year annualized returns outpaced their less expensive peers.
    "Few, if any, fund characteristics can be linked to performance more so
than the level of expenses," adds Standard & Poor's Managing Director, Phil
Edwards.  "As Standard & Poor's research has shown for the second consecutive
year, high levels of expenses can significantly eat away at a fund's overall
performance.  It is important for both investors and financial advisors to
keep fund expenses in the forefront of their analysis when assembling a
portfolio."
    To reach its conclusions, Standard & Poor's determined the average expense
ratio for each of the nine domestic fund styles, and then sorted the funds
into two categories - those with an expense ratio below the average of their
peers and those with an expense ratio that was higher.  The average annualized
return for each of the two categories was compared over a one-, three-, five-,
and ten-year performance period to determine if a fund's return justified the
level of its expenses.  Standard & Poor's concluded that for funds with larger
than average expense ratios a higher return was not necessarily something
investors came away with.
    "Given the results of this study, it is clear that expenses continue to
play a significant role in the overall return of a mutual fund," continues
Edwards.  "Since a fund's expenses are typically stated in percentage terms,
it is often difficult for investors to understand the cost implications.
Standard & Poor's believes that investors would be better served by stating
expenses in dollar and cents terms."
    A table showing the average performance of the funds with expense ratios
above and below the average for their investment style can be found at the end
of this release.


    Style Category                      1-Year        3-Year        5-Year
                                        Return(%)     Return(%)     Return(%)

    Large-Cap Growth Fund
    Funds Above Average Expense Ratio    14.75         -6.97         -5.04
    Funds Below Average Expense Ratio    16.07         -5.32         -3.37

    Large-Cap Blend Fund
    Funds Above Average Expense Ratio    14.93         -3.89         -2.50
    Funds Below Average Expense Ratio    17.27         -2.51         -1.26

    Large-Cap Value Fund
    Funds Above Average Expense Ratio    17.74         -1.53          0.84
    Funds Below Average Expense Ratio    18.79          0.01          1.81

    Mid-Cap Growth Fund
    Funds Above Average Expense Ratio    21.03         -4.45          0.69
    Funds Below Average Expense Ratio    22.83         -3.14          2.39

    Mid-Cap Blend Fund
    Funds Above Average Expense Ratio    23.35          3.38          8.37*
    Funds Below Average Expense Ratio    25.47          4.93          7.99

    Mid-Cap Value Fund
    Funds Above Average Expense Ratio    25.94          6.89          8.01
    Funds Below Average Expense Ratio    26.18          7.29          9.83

    Small-Cap Growth Fund
    Funds Above Average Expense Ratio    26.04         -2.58          2.88
    Funds Below Average Expense Ratio    27.50         -0.77          5.65

    Small-Cap Blend Fund

    Funds Above Average Expense Ratio    30.67          5.60          7.83
    Funds Below Average Expense Ratio    30.01          7.33          9.79

    Small-Cap Value Fund
    Funds Above Average Expense Ratio    30.73          9.39         12.20
    Funds Below Average Expense Ratio    31.78         11.22         13.33


    Style Category                     10-Year        Average        Value
                                       Return(%)      Expense          of
                                                       Ratio         $1,000
                                                                   Invested 10
                                                                    Years Ago
    Large-Cap Growth Fund
    Funds Above Average Expense Ratio     7.19          2.14         $2047
    Funds Below Average Expense Ratio     8.90          1.09         $2388

    Large-Cap Blend Fund
    Funds Above Average Expense Ratio     7.93          1.85         $2210
    Funds Below Average Expense Ratio    10.01          0.75         $2632

    Large-Cap Value Fund
    Funds Above Average Expense Ratio     9.19          1.93         $2441
    Funds Below Average Expense Ratio    10.53          0.99         $2762

    Mid-Cap Growth Fund
    Funds Above Average Expense Ratio     6.56          2.39         $2145
    Funds Below Average Expense Ratio     9.47          1.23         $2604

    Mid-Cap Blend Fund
    Funds Above Average Expense Ratio    12.13*         1.84         $3118
    Funds Below Average Expense Ratio    12.12          0.80         $2767

    Mid-Cap Value Fund
    Funds Above Average Expense Ratio    11.01          2.02         $3155
    Funds Below Average Expense Ratio    12.21          1.16         $3205

    Small-Cap Growth Fund
    Funds Above Average Expense Ratio     6.47          2.38        $2,004
    Funds Below Average Expense Ratio    10.29          1.36        $2,755

    Small-Cap Blend Fund

    Funds Above Average Expense Ratio    10.72          2.03        $2830
    Funds Below Average Expense Ratio    11.51          0.96        $3044

    Small-Cap Value Fund
    Funds Above Average Expense Ratio    11.36          2.16        $2983
    Funds Below Average Expense Ratio    13.40          1.20        $3568

     * Denotes where funds with above average expense ratio outperformed less
       expensive peers

     Source: Standard & Poor's.
     Total returns include reinvested dividends.
     Data as of: 5/31/04

    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
16,000 U.S. mutual funds through its STARS ranking system.
    Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP), is
the world's foremost provider of independent credit ratings, indices, risk
evaluation, investment research, data and valuations.  With 5,000 employees
located in 20 countries, Standard & Poor's is an essential part of the world's
financial infrastructure and has played a leading role for more than 140 years
in providing investors with the independent benchmarks they need to feel more
confident about their investment and financial decisions.  For more
information, visit http://www.standardandpoors.com.