Oct. 21, 2004 — Benchmark indices are outperforming actively managed funds in most U.S. equity styles year-to-date through September, and in the third quarter itself, according to research from Standard & Poor’s Indices Versus Active Funds Scorecard (SPIVA).

The data shows the S&P 500 Index is ahead of 62.6% of large-cap funds through the end of September, while the S&P MidCap 400 Index is in front of 57.7% of mid-cap funds, and the S&P SmallCap 600 is outpacing 84.4% of small-cap funds

For the third quarter of 2004, the S&P 500 outperformed 58.6% of large-cap funds, the S&P MidCap 400 Index outpaced 58.0% of mid-cap funds, and the S&P SmallCap 600 Index has beaten 69.5% of small-cap funds.

“A majority of active funds have underperformed benchmarks in this year’s trendless market,” notes Srikant Dash, Index Strategist at Standard & Poor’s. “Results of the first nine months of this year are in contrast to that of 2003, where a majority of active funds outperformed indices in six investment styles.”

The average mutual fund returned slightly more than 1% for 2004, noted Rosanne Pane, Mutual Fund Strategist at Standard & Poor’s. “Market returns have been subdued this year by concerns over rising oil prices, the geopolitical environment and mixed economic results,” she said. “In addition, growth opportunities have been difficult to find.”

Standard & Poor’s also found that longer-term results are consistent with past results. Over the last three years, the S&P 1500 Index outperformed 58.5% of all domestic equity funds, the S&P 500 outperformed 68.9% of large-cap funds, the S&P MidCap 400 outperformed 83.6% of mid-cap funds, and the S&P SmallCap 600 outperformed 78.8% of small-cap funds.

The complete third quarter SPIVA scorecard is available on

Fund Category Comparison Index

Third Quarter 2004

Year-to-Date 2004

All Domestic Funds S&P SuperComposite 1500

60.6

57.9

All Large-Cap Funds S&P 500

58.6

62.6

All Mid-Cap Funds S&P MidCap 400

58.0

57.7

All Small-Cap Funds S&P SmallCap 600

69.5

84.4

Large-Cap Growth Funds S&P/BARRA 500 Growth

40.7

48.5

Large-Cap Blend Funds S&P 500

60.3

66.2

Large-Cap Value Funds S&P/BARRA Value

81.7

80.2

Mid-Cap Growth Funds S&P/BARRA MidCap 400 Growth

69.7

65.3

Mid-Cap Blend Funds S&P MidCap 400

44.2

42.9

Mid-Cap Value Funds S&P/BARRA MidCap 400 Value

47.8

48.2

Small-Cap Growth Funds S&P/BARRA 600 SmallCap Growth

88.6

94.9

Small-Cap Blend Funds S&P SmallCap 600

73.5

86.6

Small-Cap Value Funds S&P/BARRA 600 SmallCap Value

67.2

81.3

All Cap Growth Funds S&P SuperComposite 1500

72.2

72.0

All Cap Value Funds S&P SuperComposite 1500

21.1

27.7

Source: Standard & Poor’s.

Contact Bob Keane with questions or comments at: bkeane@investmentadvisor.com.