1. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 LCN200803-2013997 Growth and Value Investing

2. Equity Investment Classification © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Large-cap  9,500 Mutual funds  283 Stocks Mid-cap  2,486 Mutual funds  701 Stocks Small-cap  2,066 Mutual funds  4,908 Stocks

3. What are Growth and Value Stocks? © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Growth stocks  High growth rate of earnings, sales  Low book-to-price, high price-to- earnings ratios  Paying lower or no dividends Risks  Future growth does not occur as expected  Book-to-price ratios rise unexpectedly, price-to-earnings ratio decline unexpectedly Value stocks  Slower growth of earnings and sales  High book-to-price, low price-to- earnings ratios  Higher dividend yields  Turnaround opportunities Risks  Evaluation of stocks as good value is misread  Difficult to stick to value policy when prices are beaten down

4. Risk and Return by Size and Style Growth and value stocks 1969–2007 Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Large value Mid value Small value Large growth Mid growth Small growth 14 12 10 8 16% Compound annual return 15% Standard deviation 171921232527

5. Range of Annual Returns Growth and value stocks 1969–2007 Past performance is no guarantee of future results. Each bar shows the range of compound annual returns for each asset class over the period 1969–2007. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 60% Return 40 20 0 –20–20 –40–40 Large growthLarge value Mid growth Mid value Small growth Small value 47.6% –32.4% 39.4% –22.1% 10.8% 51.3% –33.0% 9.7% 61.2% –20.8% 13.6% 60.5% –40.6% 9.1% 58.3% –24.4% 14.8% Compound annual return: 9.2%

6. Growth and Value Investing 1969–2007 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1969. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 14.8% 10.8 9.2 9.1 Compound annual return Small value Large value Large growth Small growth $220.84 $55.22 $31.02 $29.69 $1,000 100 10 1 0 1969197519811987199319992005

7. Growth and Value Investing 1998–2007 Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1998. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 $1.53 $1.75 $1.84 $2.79 10.8% 6.3 5.8 4.3 Compound annual return $5 0.7 1 19981999200020012002 2003 2004 2005 20062007 Small value Large value Small growth Large growth

8. One-Year Growth and Value Cycles 1969–2007 Past performance is no guarantee of future results. Performance differential measures the outperformance of each asset class over one another on a 12-month rolling basis. Each 12-month rolling return represents the annualized return over the prior 12 months. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 12-month rolling returns 40% 30 20 10 Large growth Large value Performance differential 75% 50 25 0 –25 1969 Jan–Dec 1974 Jan–Dec 2004 Jan–Dec 1999 Jan–Dec 1994 Jan–Dec 1989 Jan–Dec 1984 Jan–Dec 1979 Jan–Dec

9. Three-Year Growth and Value Cycles 1969–2007 Past performance is no guarantee of future results. Performance differential measures the outperformance of each asset class over one another on a 36-month rolling basis. Each 36-month rolling return represents the annualized return over the prior 36 months. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Performance differential 36-month rolling returns Large value Large growth 0 25 50% 5 10 15 20 25% 2006200119961991198619811976Dec 1971 2004199919941989198419791974Jan 1969 –25 0

10. Growth and Value by Decade Compound annual rates of return by decade Past performance is no guarantee of future results. *Based on the years 1928–1929. **Based on the years 2000–2007. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 1920s*1930s1940s1950s1960s1970s1980s1990s2000s** 20 15 10 5 0 –5–5 Growth stocks Value stocks 25% Return

11. Moving With the Market Annual performance comparison 1988–2007 Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Large growth Large value S&P 500 50% 40 30 20 10 0 –10 –20 –30 20062007198819891990199119921993199419951996199719981999200020012002200320042005

12. Bull Market Performance Booming 1990s: 1995–1999 Past performance is no guarantee of future results. Hypothetical value of $1,000 invested at the beginning of 1995. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 $4,500 3,500 2,500 1,500 500 19951996199719981995199719981999 1996 GrowthValue Small growth: Compound annual return: 17.6 Mid growth: 23.2 Large growth: 34.4% $4,379 $2,842 $2,249 Compound annual return: Large value: Mid value: Small value: 24.8% 17.7 16.4 $3,033 $2,258 $2,136

13. Bear Market Performance Early 2000s bear market: July 2000–December 2003 Past performance is no guarantee of future results. Hypothetical value of $1000 invested at the beginning of July 2000. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 $1,800 1,400 1,000 600 200 July 2000 July 2001 July 2002 July 2003 July 2000 July 2001 July 2002 July 2003 Small growth: Compound annual return: –5.8% Mid growth: –7.3 Large growth: –14.5 $577 $767 $812 Compound annual return: Large value: Mid value: Small value: –0.9 13.7 16.5% $1,705 $1,568 $969 GrowthValue

14. Blending Growth and Value © 2008 Morningstar, Inc. All rights reserved. 3/1/2008  Balance growth investments with those that produce income  Invest in both large and small companies, as well as a mix of well established and new companies  Consider investments that are currently out of favor but have potential to increase in value  Blending effectively may cushion against the many ups and downs in the market

15. Style Winners and Losers 1998–2007 Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2008 Morningstar, Inc. All rights reserved. 3/1/2008 Highest returns Lowest returns 2007199819992000200120022003200420052006 Large growth (LG) Large value (LV) Mid growth (MG) Mid value (MV) Small growth (SG) Small value (SV) Diversified portfolio (DP) 12.1 LG 8.7 MG 7.4 SG 4.1 DP 2.5 LV 0.4 MV –5.6 SV 47.6% LG 16.6 LV 10.7 DP 6.4 MG 2.3 SG 0.8 MV –4.1 SV 51.3 MG 39.3 SG 29.8 LG 23.2 DP 13.1 LV 4.8 MV 4.6 SV 25.4 MV 22.7 SV –3.0 LV –3.4 DP –18.5 MG –22.0 LG –22.6 SG 14.8 SV 3.9 MV –0.4 SG –2.9 DP –7.2 MG –8.8 LV –20.1 LG –12.8 MV –13.3 SV –19.8 DP –20.1 LV –21.5 MG –23.9 LG –27.8 SG 48.4 SG 47.9 SV 43.9 MV 40.3 MG 39.0 DP 29.9 LV 24.8 LG 21.1 SV 20.8 MV 19.6 SG 15.8 DP 13.4 LV 13.1 MG 6.7 LG 14.0 MV 9.2 SV 8.8 MG 7.9 DP 7.0 LV 4.7 SG 3.3 LG 23.2 SV 22.1 LV 15.3 DP 13.9 MG 13.0 MV 10.8 SG 8.9 LG