1. MPSIF Economic Update Presentation by MPSIF Growth Fund 3/29/04

2. 3/29/04MPSIF Economic Update Agenda Overview Overview Recent Economic Indicators Recent Economic Indicators Current Economic Sentiment Current Economic Sentiment Threat Analysis Threat Analysis Market Data Market Data Strategy Strategy

3. 3/29/04MPSIF Economic Update Recent Economic Indicators GDP Source: Commerce Dept.  4Q real GDP growth was 4.1%

4. 3/29/04MPSIF Economic Update Current Economic Sentiment Unemployment Source: Federal Reserve  Unemployment now around 5.6%, down from 10 year peak at 6%.

5. 3/29/04MPSIF Economic Update Recent Economic Indicators Corporate Profits  Steady rise in Corporate Profits supports economic recovery.  4 th quarter profits increased at a 7.6% annual rate. Source: Federal Reserve & WSJ

6. 3/29/04MPSIF Economic Update Recent Economic Indicators Corporate Dividends  Corporate Dividends are rising, prompted by new legislation which cut corporate dividend tax rate.  MPSIF benefits from increased total return on equity holdings. Source: Federal Reserve

7. 3/29/04MPSIF Economic Update Recent Economic Indicators Crude Oil Spot Prices Source: Federal Reserve

8. 3/29/04MPSIF Economic Update GDP Growth Expectations Strong for ‘04

9. 3/29/04MPSIF Economic Update U.S. Productivity Growth Non-farm Productivity grew 4.4% in 2003 after 5.0% gain in 2002 Projected to grow by 4.5% in 2004 Fuels economic growth early in a recover without a need for additional labor inputs Indicates that employment will eventually pick up

10. 3/29/04MPSIF Economic Update Inflation Expected to Remain Tame for the rest of 2004 Source: WSJ, July May and November estimates around 2%

11. 3/29/04MPSIF Economic Update Unemployment Expected Decrease throughout 2004 Source: WSJ, July 5.6% expected for May and 5.4% estimated for November

12. 3/29/04MPSIF Economic Update Interest Rates Expected to Increase during 2004 Source: WSJ, July Fed Funds rate expected to hold steady in near- term at 1% but increase to 1.5% by year end

13. 3/29/04MPSIF Economic Update Micro Economic Indicators Source: WSJ Indicators show continued improvement

14. 3/29/04MPSIF Economic Update Summary of Economic Sentiment Economy continues to show signs of improvement Economy continues to show signs of improvement –Growth in corporate profits –GDP Growth Employment is not keeping pace Employment is not keeping pace –Productivity gains –“Just-in-time” hiring Threats could derail economic and stock market performance Threats could derail economic and stock market performance

15. 3/29/04MPSIF Economic Update Threats To Continued Economic Growth Terrorism / Geopolitical Uncertainty Terrorism / Geopolitical Uncertainty Continued and increasing budget deficits Continued and increasing budget deficits Weakness in dollar and trade deficits Weakness in dollar and trade deficits Interest rates Interest rates Rising cost of oil and other commodities Rising cost of oil and other commodities Employment / Consumer sentiment Employment / Consumer sentiment Inflation Inflation Taxes / Gov’t economic policy Taxes / Gov’t economic policy China and India China and India

16. 3/29/04MPSIF Economic Update Effects on the Stock Market Increasing employment will drive consumer confidence and stock prices Increasing employment will drive consumer confidence and stock prices Earnings strength in Q1 will have a positive impact on stock prices Earnings strength in Q1 will have a positive impact on stock prices Market barometers such as P/E ratios, New High/New Low ratios, low interest and low inflation indicate that a steep decline is unlikely in the near term Market barometers such as P/E ratios, New High/New Low ratios, low interest and low inflation indicate that a steep decline is unlikely in the near term

17. 3/29/04MPSIF Economic Update Market Data

18. 3/29/04MPSIF Economic Update Market Data

19. 3/29/04MPSIF Economic Update Market Data U.S. TREASURIES Bills COUPON MATURITY DATE CURRENT PRICE/YIELD PRICE/YIELD CHANGE TIME 3-Month N.A.06/24/20040.92/0.940.01/0.01303/26 6-Month N.A.09/23/20040.97/0.980.01/0.00603/26 Notes/Bonds COUPON MATURITY DATE CURRENT PRICE/YIELD PRICE/YIELD CHANGE TIME 2-Year 1.50003/31/2006 99-27 / 1.56 -0-04/0.06403/26 3-Year 2.25002/15/2007 100-27 / 1.95 -0-08/0.08803/26 5-Year 2.62503/15/2009 99-08 / 2.79 -0-16/0.10903/26 10-Year 4.00002/15/2014 101-12 / 3.83 -0-26/0.09803/26 30-Year 5.37502/15/2031 109-08 / 4.77 -1-06/0.07403/26

20. 3/29/04MPSIF Economic Update Strategy Is the equity market cheap?

21. 3/29/04MPSIF Economic Update Strategy Investor risk aversion has risen in response to the terrorist acts in Spain and mixed economic news in the US. Decline in the S&P 500 index along with the rise in bond prices, has boosted the relative attractiveness of equities.

22. 3/29/04MPSIF Economic Update Strategy Shares now appear between 15% and 20% under priced. According to GS: “Our yearend 2004 S&P 500 fair value price target remains 1250.”

23. 3/29/04MPSIF 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 Attractive sectors Attractive sectors –Diversified Financial / Investment Services –Basic Materials –Consumer Products

24. 3/29/04MPSIF Economic Update Strategy Questions? Questions?