Independent Research Provider Releases August Equity Fund Review

    NEW YORK, Sept. 8 /PRNewswire/ -- Facing many challenges, domestic equity
funds are playing defense this year by turning to large-cap value offerings
reports Standard & Poor's, the leading provider of independent investment
research, ratings and indices.  According to Standard & Poor's latest review
of domestic equity fund performance, the market is shifting to large,
high-quality, dividing-paying companies to help limit downside amid economic
and political uncertainty.
    According to Standard & Poor's fund database, the average domestic equity
fund has shed 1.72% year-to-date through August. The broad market is doing
moderately better, with the S&P 500 gaining 0.25% over the same period. So far
this year, value offerings are leading with mid- and small-cap value funds
coming in as the two best-performing domestic equity fund styles. Small-cap
growth funds are the worst performing domestic fund style year-to-date,
returning -7.62%.
    "Investors continue to take a defensive approach as they face rising
interest rates, lower earnings, elevated oil prices, and terrorism fears,"
says Sam Stovall, Chief Investment Strategist at Standard & Poor's. "In
particular, investors are focusing on dividend-paying stocks to get paid while
they wait."
    Year-to-date through August 20, dividend-paying stocks in the S&P
500-stock index gained 4.2%, versus a decline of 8.4% for the index's
non-dividend-paying stocks."
    "Investors apparently view larger-cap companies as likely to benefit from
the lower dollar and the mature economic cycle," continues Stovall.  "Compared
with small-cap companies, large-cap companies are more likely to pay
dividends, be bigger exporters, and have supply contracts that lessen raw
material costs."
    Stovall believes that the market is currently at a crossroads, and once
the presidential election is behind us, he believes investors will see that
the gross domestic product is a little better than originally thought.
Standard & Poor's expects the economy to grow 4.4% in 2004, and 3.6% in 2005.
    Based on this outlook, Standard & Poor's Investment Policy Committee
predicts the S&P 500 will rise 1.6% in 2004, and 5.5% in the first half of
2005.


     Fund Investment Style                          Average Returns
                                                    Year-To-Date 2004 (%)
     Large-Cap Growth                                   -3.89
     Large-Cap Value                                    +1.63
     Large-Cap Blend                                    -0.74
     Mid-Cap Growth                                     -4.37
     Mid-Cap Value                                      +2.36
     Mid-Cap Blend                                      -0.06
     Small-Cap Growth                                   -7.62
     Small-Cap Value                                    +1.93
     Small-Cap Blend                                    -1.07
     Domestic Equity Funds*                             -1.72
     S&P 500-Stock Index                                +0.25

     Fund Investment Style                          Average Returns
                                                    August 2004 (%)
     Large-Cap Growth                                   -0.81
     Large-Cap Value                                    +0.65
     Large-Cap Blend                                    +0.13
     Mid-Cap Growth                                     -1.76
     Mid-Cap Value                                      -0.21
     Mid-Cap Blend                                      -0.83
     Small-Cap Growth                                   -2.71
     Small-Cap Value                                    -0.65
     Small-Cap Blend                                    -1.38
     Domestic Equity Funds*                             -0.65
     S&P 500-Stock Index                                +0.23

     *Excluding sector and balanced funds.
     All total returns include reinvested dividends. Data as of 8/31/04.
     Source: Standard & Poor's.

    Sam Stovall is a Standard & Poor's equity analyst.   He has no affiliation
with any company he covers, nor any ownership interest in any company he
covers.  The equity research reports and recommendations provided by Standard
& Poor's Equity Research Services are prepared separately from any other
analytic activity of Standard & Poor's.  In this regard, Standard & Poor's
Equity Research Services has no access to non-public information received by
other units of Standard & Poor's.  Standard & Poor's does not trade for its
own account.

    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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