MPSIF Economic Update Presentation by MPSIF Growth Fund 11/24/03

11/24/03MPSIF Economic Update Agenda Recent Economic Indicators Recent Economic Indicators Current Economic Sentiment Current Economic Sentiment Threat Analysis Threat Analysis Market Data Market Data Strategy Strategy

11/24/03MPSIF Economic Update Recent Economic Indicators 3Q03 GDP 7.2% 3Q03 GDP 7.2% Historic and expected GDP rates Historic and expected GDP rates Source: WSJ

11/24/03MPSIF Economic Update Recent Economic Indicators Productivity remains high, 8.1% in Q3 Productivity remains high, 8.1% in Q3 Between 1973 – 1995, productivity grew at 1.4% Between 1973 – 1995, productivity grew at 1.4%

11/24/03MPSIF Economic Update Recent Economic Indicators Unemployment decreased to 6% in October Unemployment decreased to 6% in October Initial jobless claims decreased by 15,000 to 355,000 in the week ending Nov. 15. The four-week average of claims dropped 9,000 to 367,250, its lowest level since February Initial jobless claims decreased by 15,000 to 355,000 in the week ending Nov. 15. The four-week average of claims dropped 9,000 to 367,250, its lowest level since February Source: Federal Reserve

11/24/03MPSIF Economic Update Recent Economic Indicators Housing starts rose to an adjusted annual rate of 1.96 million units in October, above September’s upward-revised estimate of million units and last October’s tally of million. Housing starts rose to an adjusted annual rate of 1.96 million units in October, above September’s upward-revised estimate of million units and last October’s tally of million. Source: Federal Reserve

11/24/03MPSIF Economic Update Recent Economic Indicators Other indicators Other indicators –Michigan Sentiment 93.5 vs. consensus 91.0 –LEI increased.4% for next 6 months –PPI +0.8% vs. expected flat –PPI ex food & energy +0.5% vs. exp +0.1% –Retail Sales -0.3% vs. expect -0.1% –Retail ex auto +0.2% as expected –Oct ISM Manufacturing 57 –Oct ISM non- manufacturing 64.7 –Sept Factory orders +0.5

11/24/03MPSIF Economic Update Recent Economic Indicators 62.5% of S&P 500 reported earnings were “above” mean expectations 62.5% of S&P 500 reported earnings were “above” mean expectations 83.4% of reporting companies were at or above 83.4% of reporting companies were at or above 3Q S&P 500 earnings analysis by sector 3Q S&P 500 earnings analysis by sector Source: S&P

11/24/03MPSIF Economic Update Current Economic Sentiment Source: WSJ, July

11/24/03MPSIF Economic Update Current Economic Sentiment Blue Chip Economic Indicators said its poll of over 50 professional forecasters found the consensus view for 2004 growth had risen to 4.2 percent from the 3.9 percent expected only a month ago. Blue Chip Economic Indicators said its poll of over 50 professional forecasters found the consensus view for 2004 growth had risen to 4.2 percent from the 3.9 percent expected only a month ago. –Economists increased forecasts for the fourth quarter of this year as well, with expectations now centered on growth at a 3.8 percent annual rate. A WSJ Survey was more conservative A WSJ Survey was more conservative 53% were lifted; 32% were cut 55% were lifted; 23% were cut 49% were lifted; 19% were cut Source: WSJ

11/24/03MPSIF Economic Update Current Economic Sentiment Goldman Sachs fourth quarter CEO Confidence Index posts solid gains -- to a record from an already high level of 76.8 in July. Goldman Sachs fourth quarter CEO Confidence Index posts solid gains -- to a record from an already high level of 76.8 in July.

11/24/03MPSIF Economic Update Current Economic Sentiment 74% of middle-market CFOs expect economic expansion in 2004 (Fleet Survey September 2003). 74% of middle-market CFOs expect economic expansion in 2004 (Fleet Survey September 2003).

11/24/03MPSIF Economic Update Current Economic Sentiment IT budget increase over the previous year (%) * * projected Source: Gartner

11/24/03MPSIF Economic Update Threat Analysis Inflation Inflation Unexpected Fed movements Unexpected Fed movements Extreme weakness in dollar Extreme weakness in dollar Oil and commodity prices Oil and commodity prices Trade wars? Trade wars? Continued and increasing deficits Continued and increasing deficits Household debt 80% of GDP Household debt 80% of GDP Housing bubble? Housing bubble? Reemergence of geopolitical concerns Reemergence of geopolitical concerns Continued scandals Continued scandals

11/24/03MPSIF Economic Update Market Data

11/24/03MPSIF Economic Update Market Data U.S. TREASURIES Bills COUPON MATURITY DATE CURRENT PRICE/YIELD PRICE/YIELD CHANGE TIME 3-Month N.A.02/19/ / / /21 6-Month N.A.05/20/ /10.00/ /21 Notes/Bonds COUPON MATURITY DATE CURRENT PRICE/YIELD PRICE/YIELD CHANGE TIME 2-Year /31/ / / /21 3-Year /15/ / / /21 5-Year /15/ / /0.0211/21 10-Year /15/ / / /21 30-Year /15/ / / /21

11/24/03MPSIF Economic Update Strategy Is the equity market fully priced?

11/24/03MPSIF Economic Update Strategy 65% of professional portfolio managers are bullish or very bullish 65% of professional portfolio managers are bullish or very bullish 23% Neutral 23% Neutral 11.5% Bearish 11.5% Bearish Very bearish.9% Very bearish.9% Barron’s “Happy Trails” October 27, 2003

11/24/03MPSIF Economic Update Strategy Asset TypeBullishNeutralBearish US Treasury3.7%22%74.8% Corporate Bonds6.5%49.5%43.9% US Dollar7.5%29.2%63.2% Oil21.7%57.5%20.8% Real Estate11.2%48.6%40.2% European Stocks33%50.9%16% Asian Stocks66%27.4%6.6% Latin Am. Stocks35.2%54.3%10.5% Other commodities50%47.2%2.8% Cash5.6%59.8%34.6% Barron’s “Happy Trails” October 27, 2003

11/24/03MPSIF Economic Update Strategy Maintain growth bias Maintain growth bias Look for companies punished too harshly Look for companies punished too harshly Watch interest rates and react accordingly Watch interest rates and react accordingly Throw out the calendar strategies this year Throw out the calendar strategies this year Ignore index sector weights Ignore index sector weights Technology – growth or cyclical? Technology – growth or cyclical?

11/24/03MPSIF Economic Update Strategy Questions? Questions?