An Introduction toStandard & Poor’sBringing analytical rigor, objectivity and integrity to your portfolio

Today’s Agenda

• Who is Standard & Poor’s (S&P)?

• Standard & Poor’s History and Milestones

• Why I Use Standard & Poor’s– Transparency and independence– Experienced and insightful research staff– Rigorous research process

• How S&P Can Add Value to Your Portfolio

3.

Who is Standard & Poor’s?

• Standard & Poor’s (S&P) was founded in 1860 by Henry Varnum Poor based on the tenet:

“Every Investor’s Right To Know”

• World’s foremost provider of: – Independent credit ratings (bonds)– Indexes like the S&P 500 – Investment research (stocks, bonds, ETFs)

• Portfolio analysis through Standard & Poor’s Investment Advisory Services, LLC (SPIAS)

• 6,500 employees located in 22 countries

• A division of The McGraw-Hill Companies (NYSE:MHP)

4.

Standard & Poor’s History

Important Milestones

1860

Henry Varnum Poor Publishes “History

Of Railroads…”

1867

Poor’s Publishing created

1929

6 months prior to crash, Standard

Statistics & Poor’s Publishing Advise

Investors to Liquidate

1932

Poor’s Publishingmerges with

Standard Statistics.S&P is born.

19571941 1966

McGraw-Hillacquires

Standard &Poor’s

19761995

SPIAS establishedto provide

advice to financial community

2004

Stock Reports introduced

S&P 500 Index introduced

Expansion outsideU.S. begins

SPIAS introduces first asset

mgmt. program

5.

Why I Use Standard & Poor’s

Market Transparency

• S&P research process clearly and openly communicated

• Provider of regular investment, economic and market commentaries

Objectivity and Independence

• S&P has no investment underwriting or securities distribution activities

• S&P analysts do not own stocks they cover

• Independent investment research provider of choice

6.

Why I Use Standard & Poor’s

Experienced and Insightful Investment Staff (Qualitative)

*6 S&P analysts awarded “Best on the Street” in 2005 by The Wall Street Journal.

Team NumberAverage Years

Market Experience

Investment Policy Committee 10 21

Equity Analysts* 100 9

Fund Analysts 45 15

Portfolio Analysts 7 20

Economists 3 15

Index Analysts 20 5

7.

Why I Use Standard & Poor’s

Rigorous Research Processes: Stocks

• STARS buy-hold-sell recommendations (since 1986)

• Quality Rankings

• Fair Value

8.

Why I Use Standard & Poor’s

The STARS model performance graph is only an illustration of S&P’s research: it shows how stocks that received particular STARS rankings performed. This performance is not a result of investment advisory activities of Standard & Poor’s Investment Advisory Services LLC (SPIAS). The performance of these stocks does not show how any model portfolio has performed. The STARS rankings are only one piece of information SPIAS utilizes when selecting stocks for stock baskets. Stock recommendations will not be made solely on STARS rankings, nor will investors be able to invest in all of the stocks that receive a particular STARS ranking through the program.

STARS model performance does not represent the results of actual trading of investor assets. Thus, the model performance shown does not reflect the impact that material economic and market factors might have had on decision-making if actual investor money had been managed. While model performance for five, four and three STARS performed better than the S&P 500 for the period shown, the performance during any shorter or longer period may not have. STARS does not take into account any particular investment objective, financial situation or need and is not intended as an investment recommendation or strategy. Investments based on the STARS methodology may loose money.

The model performance calculation for STARS does not take into account reinvestment of dividends. It also does not take into account capital gains taxes, brokers' commissions and investment advisory fees. The imposition of these fees and charges would cause actual performance to be lower than the model performance shown. Past STARS model performance is no guarantee of future performance.

The Standard & Poor’s 500 index is unmanaged and includes a different number of holdings, has different risk characteristics than the STARS stocks, and does not reflect expenses and fees or takes into consideration the reinvestment of dividends. It is not possible to invest in an index. Past performance of the index is no guarantee of future performance.

Analytic services and products provided by Standard & Poor’s are the result of separate activities designed to preserve the independence and objectivity of each analytic process. Standard & Poor’s has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process.

9.

Why I Use Standard & Poor’s

Rigorous Research Processes: StocksSTARS Cumulative Performance

December 1986 - December 2005

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05

1 STARS 2 STARS 3 STARS 4 STARS 5 STARS S&P 500 INDEX

Grow th of $100invested on

12/31/86 w ould be w orth on 12/31/05

5 STARS = $17884 STARS = $8913 STARS = $640S&P 500 = $5152 STARS = $4131 STARS = $112

Average Annual Performance

12-31-86 to 12-31-05

5 STARS = +16.4%4 STARS = +12.2%3 STARS = +10.3%S&P 500 = +9.0%2 STARS = +7.8%1 STARS = +0.6%

10.

8,000Domestic

Mutual Funds

Why I Use Standard & Poor’s

Performance Consistency

Rigorous Research Processes: Mutual Funds

Best of Breed Funds

ManagerInterviews

SecondaryResearch

11.

Why I Use Standard & Poor’s

150ETFs

Structure

Rigorous Research Process: ETFs

Best of Breed ETFs

Liquidity Cost

12.

How S&P Can Add Value To Your Portfolio

What does this mean to you? It means a portfolio built on….

• 140 years of experience

• “Every Investor’s Right to Know”

• Independent and unbiased investment research and analysis

• A deep bench of investment analysts from which to draw

• In-depth coverage and analysis on more than 1,500 domestic stocks

• In-depth analysis on approximately 8,000 funds

• Rigorous research processes that are transparent and independent

13.

Questions & Answers

?

Copyright © 2005 by The McGraw-Hill Companies, Inc. Redistribution, reproduction and/or photocopying in whole or in part is prohibited without written permission “Standard & Poor’s” and "STARS" are trademarks of The. All rights reserved. “S&P”, “S&P 500”, McGraw-Hill Companies, Inc. The information in this slide presentation is not investment advice. Analytic services and products provided by Standard & Poor’s are the result of separate activities designed to preserve the independence and objectivity of each analytic process. Standard & Poor’s has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process.

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