1. Capital Markets Charts Series (Performance Charts) IFS-A Charts 1 – 15 Reminder: You must include the Glossary of Indices and disclosure pages with all charts you select to use, either individually or as a group. Information as of December 31, 2003 unless otherwise noted

2. Annualized Rates of Return 1926 - 2003
Asset Class Returns
Annualized Rates of Return
The power of common stocks is apparent when viewed in terms of the average annual return for each of these classes. Stocks represent ownership in a company, are not guaranteed and have been more volatile than other asset classes.
Small stocks provided an impressive 12.67% annualized return and large stocks returned 10.42%, more than double the 5.40% for government bonds and 3.75% for Treasury bills. Over the same period, inflation grew at 3.03% annual rate.
Source: Ibbotson Associates, Chicago.
Government bonds and Treasury Bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. Stocks represent ownership in a company and are not guaranteed, and have been more volatile than other asset classes. The prices of small company stocks are generally more volatile than those of large company stocks. Corporate bonds are debts of the company and are backed by the claims paying ability of the issuer. Past performance is not indicative of future results. Individual investor results will vary. See Glossary of Indices for index descriptions.

3. The power of common stock is apparent when viewed in terms of the growth of a dollar in each of these asset classes. One dollar invested in small stocks grew to $10, in 77 years and a dollar in large stocks grew to $2, The results for bonds are drastically different. Of course, bonds have less inherent volatility.
Source: Ibbotson Associates, Chicago.
Government bonds and Treasury Bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. The prices of small company stocks are generally more volatile than those of large company stocks. Stocks represent ownership in a company and are not guaranteed and have been more volatile than other asset classes. Corporate bonds are debts of the company and are backed by the claims paying ability of the issuer. Past performance is not indicative of future results. Individual investor results will vary. See Glossary of Indices for index descriptions.

4. Annualized Rates of Return with
Asset Class Returns
Annualized Rates of Return with
International
The power of common stocks is apparent when viewed in terms of the average annual return for each of these classes. Since 1970, small stocks provided an impressive 14.03% annualized return and large stocks returned 11.30%. International stocks returned 10.82% while corporate bonds registered in at 9.41%. Treasury bills came in at 6.26%. Over the same period, inflation grew at 4.78% annual rate. Stocks represent ownership in a company, are not guaranteed and have been more volatile than other asset classes.
Source: Ibbotson Associates, Chicago.
Government bonds and Treasury Bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. The prices of small company stocks are generally more volatile than those of large company stocks. Foreign investing is subject to certain risks, such as currency fluctuation and social and political changes. Stocks represent ownership in a company and are not guaranteed and have been more volatile than other asset classes. Corporate bonds are debts of the company and are backed by the claims paying ability of the issuer. Past performance is not indicative of future results. Individual investor results will vary. See Glossary of Indices for index descriptions.

5. 86.8
38.0
32.9
21.2
19.6
7.9
4.9
The power of common stock is apparent when viewed in terms of the growth of a dollar in each of these asset classes. Since the inception of the MSCI EAFE international index in 1970, one dollar invested in small stocks grew to $86.80 in 33 years and a dollar invested in large stocks grew to $38.00 both significantly higher than the results for bonds. Of course, bonds have less inherent volatility. Stocks as a percentage of ownership in a company offer growth potential, but fluctuate more than bonds and offer little or no current income.
Source: Ibbotson Associates, Chicago.
Government bonds and Treasury Bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. The prices of small company stocks are generally more volatile than those of large company stocks. Stocks represent ownership in a company and are not guaranteed and have been more volatile than other asset classes. Corporate bonds are debts of the company and are backed by the claims paying ability of the issuer. Past performance is not indicative of future results. Individual investor results will vary. See Glossary of Indices for index descriptions.

6. Asset Class Returns After Inflation 1926 - 2003
This chart conveys the impact of inflation on investment returns. Even so, both large & small stocks have returned far better than any other asset class since Keep in mind, stocks offer long term growth potential but may fluctuate more and provide less current income than other investments. Small company stocks are generally more volatile than large company stocks.
Source: Ibbotson Associates, Chicago.
Government bonds and Treasury Bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. The prices of small company stocks are generally more volatile than those of large company stocks. Stocks offer long-term growth potential but may fluctuate more and provide less current income than other investments. Stocks represent ownership in a company and are not guaranteed and have been more volatile than other asset classes. Corporate bonds are debts of the company and are backed by the claims paying ability of the issuer. Past performance is not indicative of future results. Individual investor results will vary. See Glossary of Indices for index descriptions.

7. The power of common stock is apparent when viewed in terms of the growth of a dollar in each asset classes, even after inflation. One dollar invested in small stocks grew to $1, in 77 years and a dollar in large stocks grew to $ The results for bonds are drastically different. Of course, bonds have less inherent volatility.
Source: Ibbotson Associates, Chicago.
Government bonds and Treasury Bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. The prices of small company stocks are generally more volatile than those of large company stocks. Stocks represent ownership in a company and are not guaranteed and have been more volatile than other asset classes. Corporate bonds are debts of the company and are backed by the claims paying ability of the issuer. Past performance is not indicative of future results. Individual investor results will vary. See Glossary of Indices for index descriptions.

8. Asset Class Returns -Various Periods
Annualized Returns Ending 12/2003
Clearly, in most time periods shown, stocks both large and small have beaten other asset classes in total return. One can also see that over longer periods, small cap stocks have outperformed large cap stocks. However, there is more volatility associated with those returns. Past performance does not guarantee future results.
Source: Ibbotson Associates, Chicago.
Government bonds and Treasury Bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. The prices of small company stocks are generally more volatile than those of large company stocks. Stocks represent ownership in a company and are not guaranteed and have been more volatile than other asset classes. Corporate bonds are debts of the company and are backed by the claims paying ability of the issuer. Past performance is not indicative of future results. Individual investor results will vary. See Glossary of Indices for index descriptions.

9. Style Returns for Various Periods
1993 to 2003
-40%
-30%
-20%
-10% 0%
10%
20%
30%
40%
50%
60%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Large Cap Growth
Large Cap Value
Mid Cap Growth
Mid Cap Value
Small Cap Growth
Small Cap Value
This chart indicates the importance of being diversified among various asset classes and styles. Some times asset class returns will move together, however, as seen in most recent years, being diversified is critical to help reduce portfolio volatility and preserve capital.
Source: Ibbotson Associates, Chicago.
The prices of small company stocks are generally more volatile than those of large company stocks. Stocks offer long-term growth potential but may fluctuate more and provide less current income than other investments. Stocks represent ownership in a company and are not guaranteed and have been more volatile than other asset classes. Past performance is not indicative of future results. Individual investor results will vary. Large Cap Growth - R1000G; Large Cap Value - R1000V ; Mid Cap Growth – R MidCap Growth; Mid Cap Value – R MidCap Value; Small Cap Growth – R2000G; Small Cap Value – R2000V See Glossary of Indices for index descriptions.

10. Asset Class Returns by Decade
Stocks (large & small) were the winning asset class in every decade since 1950's. Specifically in the 1950s, 1980s, and 1990s stocks provided especially strong performance.
Source: Ibbotson Associates, Chicago.
Government bonds and Treasury Bills are guaranteed by the U.S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value. The prices of small company stocks are generally more volatile than those of large company stocks. Stocks represent ownership in a company and are not guaranteed and have been more volatile than other asset classes. Corporate bonds are debts of the company and are backed by the claims paying ability of the issuer. Past performance is not indicative of future results. Individual investor results will vary. See Glossary of Indices for index descriptions.

11. Major Stock Market Advances
Since 1950
S&P 500
% Return
This chart indicates those years where the S&P 500 index had returned at least 20%. Notice the 1990’s experienced several good years of solid returns for the S&P 500.
Source: Ibbotson Associates, Chicago.
This illustration is provided for informational purposes only. It is not intended to represent any specific investment, and is not indicative of future performance. Investors can not directly purchase any index. See Glossary of Indices for index descriptions.

12. Major Stock Market Declines
Since 1950
% Return
S&P 500
This chart indicates certain years since 1950 where the S&P 500 had negative returns.
Source: Ibbotson Associates, Chicago.
This illustration is provided for informational purposes only. It is not intended to represent any specific investment, and is not indicative of future performance. Investors can not directly purchase any index. See Glossary of Indices for index descriptions.

13. Over one year periods the markets can be unpredictable.
On a year-to-year basis, the equity market can be quite volatile. This chart shows each year’s performance since 1926.
Over one year periods the markets can be unpredictable.
Source: Ibbotson Associates, Chicago.
Past performance is not indicative of future results. Individual investors cannot directly purchase an index. See Glossary of Indices for index descriptions.

14. Over long periods of time, equities become a more stable investment
Over long periods of time, equities become a more stable investment. Looking at rolling 5-year periods, there was a higher probability of having consistent positive returns. Past performance is no guarantee of future results. .
2003
Source: Ibbotson Associates, Chicago.
Past performance is not indicative of future results. Individual investors cannot directly purchase an index. See Glossary of Indices for index descriptions.

15. Over long periods of time, equities become more stable investments
Over long periods of time, equities become more stable investments. Looking at 10-year time periods, there was a much higher probability of having consistent positive returns.
Source: Ibbotson Associates, Chicago.
Past performance is not indicative of future results. Individual investors cannot directly purchase an index. See Glossary of Indices for index descriptions.

16. Equity Returns 15 - Year Holding Periods
S&P 500
20%
18%
16%
14%
12%
10% 8% 6% 4%
Over 15-year holding periods there was not a single losing period, even including the depression. With a longer time horizon, the investor has a much greater chance of obtaining the equity results that an asset allocation mix is designed to produce. However, most investors have difficulty accepting even a three-to five-year time horizon, let alone a longer one. 2% 0%
1940
1943
1946
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
Source: Ibbotson Associates, Chicago.
Past performance is not indicative of future results. Individual investors cannot directly purchase an index. See Glossary of Indices for index descriptions.

17. Glossary of Indices
The indices are presented to provide you with an understanding of their historic long-term performance, and are not presented to illustrate the performance of any security. Investors cannot directly purchase any index. Past performance is not indicative of future results. Individual investor results will vary.
Inflation: The Consumer Price Index for all Urban Consumers (CPI-U), not seasonally adjusted, is used to measure inflation, which is the rate of change of consumer good prices. All of the security returns are measured from one month-end to the next month-end. CPI commodity returns are collected during the month. Thus, measured inflation rates lag the other series by about one-half month. Prior to January 1978, the CPI (as compared with CPI-U) was used. Both inflation measures are constructed by the U.S. Department of Labor, Bureau of Labor Statistics.
International Stocks: The returns for International Stocks are based on the Morgan Stanley Capital International Europe, Australia, Far East Index (MSCI EAFE) for the period MSCI EAFE is a market value-weighted average of over 900 securities listed on stock exchanges in the developed countries in the regions listed above. The index includes reinvestment of gross dividends before deduction of withholding taxes.
Large Stocks: The large stock total return index is based upon the Standard and Poor’s composite index. The S&P 500 is an unmanaged weighted index of 500 stocks providing a broad indicator of price movement.
Lehman Brothers Credit Bond Index: Composed of all publicly issued, fixed rate, nonconvertible, and investment-grade corporate debt. Issues are rated at least Baa by Moody’s Investors Service or BBB by Standard & Poor’s, if unrated by Moody’s. Collateralized Mortgage Obligations (CMO’s) are not included. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. Indices are rebalanced monthly by market capitalization.
Lehman Brothers Credit - Intermediate Bond Index: A subset of the Lehman Brothers Corporate Bond Index covering all corporate, publicly issued, fixed-rate, nonconvertible US debt issues rated at least Baa by Moody’s or BBB by Standard & Poor’s with at least $50 million principal outstanding and maturity greater than 10 years.
Lehman Brothers Government Bond Index: Composed of all publicly issued, nonconvertible, domestic debt of the US Government or any agency thereof, quasi-federal corporations, or corporate debt guaranteed by the US Government, flower bonds and pass-through issues are excluded. Total return compromises price appreciation/depreciation and income as a percentage of the original investment. Indices are rebalanced monthly by market capitalization. Lehman Brothers Government – Intermediate Bond Index: Composed of all publicly issued, nonconvertible, domestic debt of the US Government or any agency thereof, quasi-federal corporations, or corporate debt guaranteed by the US Government, flower bonds and pass-through issues are excluded, with maturities between one and 9.99 years. Total return compromises price appreciation/depreciation and income as a percentage of the original investment. Indices are rebalanced monthly by market capitalization.

18. Glossary of Indices (continued from previous page)
Long-Term Corporate Bonds: For , corporate bond total returns are represented by the Salomon Brothers’ Long-Term High Grade Corporate Bond Index. The index includes nearly all Aaa and Aa rated bonds. Over , the total returns were calculated by summing the capital appreciation returns and the income returns. For the period , Ibbotson and Sinquefeld backdated the Salomon Brothers’ Index, using Salomon Brothers’ monthly yield data with a methodology similar to that used by Salomon for Capital appreciation returns were calculated from yields assuming a 20-year maturity, a bond price equal to par, and a coupon equal to the beginning of the period yield. For the period , the Standard & Poor’s monthly High Grade Corporate Composite Yield data were used, assuming a 4% coupon and a 20-year maturity. The conventional present value formula for bond price was used for the beginning and end of the month prices. Long-Term Government Bonds: The total returns on long-term government bonds from are constructed with data from the “Wall Street Journal.” Over , data are obtained from the Government’s file at the Center for Research in Security Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a one-year bond portfolio with a term of approximately 20 years and a reasonably current coupon and whose returns did not reflect potential tax benefits, impaired negotiability, or special redemption or call privileges, was used. Where callable bonds had to be used, the term of the bond was assumed to be a simple average of the maturity and first call dates minus the current date. The bond was held for the calendar year and returns were computed. NAREIT Share Price Equity Index: All of the data is based upon the last closing price of the month for all tax-qualified REITs listed on the New York Stock Exchange, American Stock Exchange, and the NASDAQ National Market System. The data is market weighted. The total return calculation is based upon the weighting at the beginning of the period depending upon whether it is one month, three months, or 12 months. Only those REITS listed for the entire period are used in the total return calculation. Dividends are included in the month based upon their payment date. There is no smoothing of income. Liquidating dividends, whether full or partial, are treated as income. This has the effect of negatively biasing the price appreciation component of the index but results in accurate realized income and total return numbers. The annualized return numbers are market weighted with the most recent dividend annualized plus any extraordinary dividends included, divided by the most recent price Russell 3000 Index: The Russell 3000 Index is composed of the 3,000 largest US securities, as determined by total market capitalization Russell 2000 Index: Consists of the smallest 2,000 securities in the Russell 3000 Index. This is the Frank Russell Company’s small capitalization index that is widely regarded in the industry as the premier measure of small capitalization stocks. Russell 1000 Index: Consists of the 1,000 largest securities in the Russell 3000 Index. This large capitalization (market-oriented) index represents the universe of stocks from which most active money managers typically select. The Russell 1,000 is highly correlated with the S&P 500 Index. Russell 1000 Growth: Measures the performance of those Russell 1000 Companies with higher price-to-book rations and higher forecasted growth values. Russell 1000 Value: Measures the performance of those Russell 1000 companies with lower price-to-book rations and lower forecasted growth values Russell Midcap Index: Measures the performance of the 800 smallest companies in the Russell 1000 Index.

19. Glossary of Indices (continued from previous page)
Russell 2000 Value Index: Measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index consists of the smallest 2,000 securities in the Russell 3000 Index. The Russell 3000 Index is composed of the 3,000 largest U.S. securities, as determined by total market capitalization. Russell 2000 Growth Index: Measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index consists of the smallest 2,000 securities in the Russell 3,000 Index. Small Stocks: For , the small company stock return series is the total return achieved by the Dimensional Fund Advisors (DFA) Small Company 9/10 Fund. This fund is a market value-weighted index of the ninth and tenth deciles of the New York Stock Exchange (NYSE), plus stocks listed on the American Stock Exchange (AMEX) and over the counter (OTC) with same or less capitalization as the upper bound of the NYSE ninth decile. The equities of smaller companies from are represented by the historical series developed by Professor Rolf W. Banz. This is composed of stocks making up the fifth quintile of the NYSE. For 1981, Dimensional Fund Advisors, Inc. updated the returns using Professor Banz’s methods. S & P 500 Index: The S&P Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value weighted index (stock price times number of shares outstanding), with each stock’s weight in the Index proportionate to its market value. The “500” is one of the most widely used benchmarks of US equity performance. S&P BARRA Growth and Value Indices: Companies in each US index are split into two groups based on price-to-book ratio to create growth and value indices. The Value index contains companies with lower price-to-book ratios, while the Growth index contains those with higher ratios. T-Bills: For the U.S. Treasury Bill Index, data from the “Wall Street Journal” are used form ; the CRSP U.S. Government Bond File is the source until Each month, a one-bill portfolio containing the shortest-term bill having not less than one month to maturity is constructed. To measure holding period returns for the one-bill portfolio, the bill is priced as of the last trading day of the current month Source: Ibbotson Associates, Chicago Revised 02/04
Disclosures
Government bonds and Treasury bills are guaranteed by the US Gov’t and, if held to maturity, as with all bonds offer a fixed rate of return and principal.
Stocks are not guaranteed, represent ownership in a company and offer long term growth potential but may fluctuate more and provide less current income than other investments.
Standard deviation represents the amount, over a period of time, that a portfolio’s return deviates from the mean or average annual return that the portfolio has Experienced.
The price of small company stocks generally are more volatile than those of large company stocks.
Managed Accounts Consulting Group Is affiliated with Prudential Investments LLC.