0. Walter G. Sall, Chairman and Chief Executive Officer
Gateway Investment Advisers, L.P.
3805 Edwards Road, Suite 600
Cincinnati, Ohio
Fax

1. Gateway Strategy: Equity — Why Not?
Over The Long Term, Captures A Substantial Portion Of The Equity Total Return
Over The Long Term, Limits The Volatility To A Level Comparable To Bonds

2. Development Of Hedged Equity Strategy At Gateway
Firm Established In 1977 And Developed Covered Call Strategies
Strategy Evolves To Use Of Index Options – Both Calls And Puts – In Mid 1980s
Use Of Puts Extremely Successful In Hedging During Market Crash In October 1987
Manages Approximately $2 Billion As Of 9/30/03

3. Alternative View of Allocation: Risk Allocation
January 1, 1988 – September 30, 2003
Based on Quarterly Data
Low Risk Investment-Grade Corporate Bonds, Treasury Bonds
Gateway Index/RA
Lehman U.S. Long Gvt/Credit Index
Low Risk Plus Growth Gateway Index/RA, Balanced Funds, Convertible Bond Funds, High-Yield Bond Funds, Arbitrage Hedge Funds, Fund of Hedge Funds
Lehman U.S. Intermediate Gvt/Credit Bond Index
S&P 500 Index
Lehman U.S. Corporate High Yield Index
Growth Equity Funds
Citigroup One-Month Treasury Bill Index
High Return Venture Capital, Leveraged Hedge Funds, Speculative Investments
Past performance is not indicative of future returns. See Disclosure on Page 13.

4. Performance Comparison Based on Quarterly Data
January 1, 1988 – September 30, 2003
Based on Quarterly Data
Past performance is not indicative of future returns. See Disclosure on Page 13.

5. Investment Process Purchase of index basket of stocks
Provides broad diversification
Balance and stability
Sell cash-settled index call options
Primary source of return
Continuously written
Provides seller with annualized cash flow averaging an estimated 18% to 20% over last 16 years
Primary return supplied by accepting upfront cash payment in exchange for uncertain future appreciation
Purchase index put options
Acts as “safety net” to mitigate the impact of a significant market decline in a short period of time
Includes deductible feature of 6% to 10%
Average estimated cost of 6% to 8% over last 16 years

6. Analogy: Don’t Speculate — Invest Like A Landlord
Cash Flow From Rental Income Minus Cost of Operation & Insurance
Cash Flow From Call Option Premiums Minus Cost of Puts & Fees
Indexed portfolio of stocks is capital asset that creates cash flow from call option premiums.
Apartment building is the capital asset that creates cash flow from rental income.
Net Cash Flow
Net Cash Flow
Asset Value
Asset Value

7. The Total Return Equation
The return available is a function of call premiums, put premiums and costs, plus the impact of down markets.

8. Gateway – Consistency and Capital Preservation
January 1, 1988 – December 31, 2002
High Volatility
Low Volatility
Equity Bull Market
Equity Bear Market
Past performance is not indicative of future returns. See Disclosure on Page 13.

9. Results Point To Success: From January 1, 1988 To September 30, 2003, Gateway Index/RA Has . . . .
Produced An Average Annual Return Of 10.36%
From January 1988 – December 1999: %
From January 2000 – December 2002: %
Outperformed Comparably Volatile Bonds
Limited Downside Loss In The Worst Bear Market Since
Profited From Sharp Increases In Equity Market Volatility
Past performance is not indicative of future returns. See Disclosure on Page 13.

10. How Does Hedged Equity Improve Asset Allocation?
Limits Open-Ended Risk Of Equities
Improved Reward To Risk Relative To Equities (Sharpe Ratio)
Uncorrelated To Bond Returns But Similar Volatility
Overall Impact – Improved Return Without Taking Additional Risk

11. Distinguishing Features of Index Options
Trading Efficiencies
Index Options Are Cash-Settled — Cash Is Delivered To The Option Buyer, Not Stocks
Benefits
Lower Transactional Costs
Tax Efficient

12. If Hedging Works So Well, Why Doesn’t Every Investor Use It?
Fiduciary Perception Of Unconventional Strategy
Options Are Speculative Investments
Frictional Costs Are High
Not Tax Efficient
Gives Up Too Much Upside

13. Disclosure
This material is restricted for use only on a one-on-one basis with prospective clients. Gateway Index/RA performance shown in this illustration is an asset-weighted composite of all discretionary accounts under Gateway’s management which share the same investment objectives and hedging strategies.
These results have been prepared and presented in compliance with the AIMR-PPS standards only for the period from January 1, 1993 through September 30, Prior to January 1, 1993, not all fully discretionary portfolios were represented in composites. Results shown for 1988 through 1992 are those of one representative account. The composite was created in January 1993.
Gateway Index/RA performance results reflect the reinvestment of dividends and other earnings, but do not reflect the deduction of investment advisory fees. A client’s return will be reduced by the advisory fees and other expenses the account may incur. A more detailed description of Gateway’s fees is included in Form ADV, Part II.
To illustrate the effect of management fees on performance, consider a $5 million account with a total return of 12% per year. Management fees are 0.85% per year on the first $5 million and 0.65% per year on assets between $5 million and $10 million, deducted monthly. At the conclusion of a five-year period, the value of the account would be $8,464,065, and management fees paid would total $264,887. Exclusive of management fees, the ending value of the account would have been $8,811,708.
If you have not already received the Annual Disclosure Presentation for the Gateway Index/RA composite, one is available upon request by calling extension 432 or 443.
Data Source: Gateway Investment Advisers, L.P., Thomson Financial and Lehman Brothers Inc.