PRESS RELEASE

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ITG Reports Second Quarter 2004 Results

NEW YORK, NY, July 29, 2004 - Investment Technology Group, Inc. (NYSE: ITG), a leading provider of technology-based equity trading services, today announced that for the second quarter ended June 25, 2004, revenues were $81.0 million, net income was $9.5 million and diluted earnings per share were $0.22.

Second quarter 2004 net income included a one-time gain of $1.5 million ($0.03 per share) related to the sale of 50% of ITG's Canadian subsidiary, KTG Technologies Corp. (KTG), to IRESS Market Technology Limited (IRESS) in April 2004 and the concurrent establishment of a Canadian joint venture with IRESS. Excluding this one-time gain, ITG's net income was 32% below second quarter 2003 and 3% less than first quarter 2004 while earnings per share were 24% below second quarter 2003 and unchanged from first quarter 2004.

For ITG overall, revenues per trading day in the second quarter of 2004 increased 23% for Client-Site Trading Products while decreasing 26% for POSIT and 16% for the Electronic Trading Desk compared to second quarter 2003. Compared to the first quarter of 2004, revenues per trading day increased 11% for Client-Site Trading Products and decreased 10% for POSIT and 8% for the Electronic Trading Desk. Canadian direct access trading revenues (approximately $23,000 per day in the second quarter of 2004), previously included in the Electronic Trading Desk, are now being reported within Client-Site Trading Products.

"ITG's volumes have been encouraging given that U.S. market volumes are down almost 30% since January" said Robert Russel, ITG's President and Chief Executive Officer. "A significant contributor to our success has been our investment in sophisticated new trading and analytical products and our diversification into the hedge fund market."

ITG's international business posted revenues of $19.9 million in the second quarter of 2004 compared to $14.6 million in the second quarter of 2003 and $16.9 million in the first quarter of 2004. International pre-tax earnings for the second quarter of 2004 were $2.7 million. Both International revenues and pre-tax earnings include a $2.4 million one-time pre-tax gain ($1.5 million after tax) from the sale of KTG discussed above. This result compares to a loss of $1.2 million in the second quarter of 2003 and a loss of $0.1 million in the first quarter of 2004. The currency impact upon pre-tax earnings was negligible.

"Our investment in international expansion is showing good momentum as we are back on track to achieve a positive pre-tax return for the year," said Mr. Russel. "We have seen solid progress in Europe and continue to achieve good profitability in Canada, as well as a small profit in our combined Australian/Asian operations."

In the U.S., ITG's trading volume for the second quarter of 2004 was 5.0 billion shares (averaging 80.8 million shares per trading day) compared to 5.5 billion shares in the second quarter of 2003 (averaging 87.0 million shares per trading day) and 4.8 billion in the first quarter of 2004 (averaging 80.7 million shares per trading day).

Excluding the one-time gain discussed above, pre-tax margins for ITG overall for the second quarter of 2004 were 18.2% compared with 22.7% in the second quarter of 2003 and 17.9% in the first quarter of 2004.

Year-to-Date Results

For the six months ended June 25, 2004, revenues decreased 2% from the prior year period to $158.6 million, net income decreased 3% to $17.7 million and diluted earnings per share increased 5% to $0.41.

Conference Call

ITG has scheduled a conference call today at 11:00 a.m. ET to discuss second quarter results. Those wishing to listen to the call should dial 1-888-855-5487 at least 10 minutes prior to the start of the call to ensure connection. A listen-only webcast will also be available on ITG's website at http://www.itginc.com/investor. For those unable to listen to the live broadcast of the call, a week-long replay will be available by dialing 1-888-203-1112 and entering the pass code 732113, and a two week-long replay will be available on ITG's website starting approximately 3 hours after the completion of the call.

About ITG

ITG is headquartered in New York with offices in Boston, Los Angeles, Dublin, Hong Kong, London, Melbourne, Sydney, Tel Aviv and Toronto. As a leading provider of technology-based equity-trading services and transaction research to institutional investors and brokers, ITG services help clients to access liquidity, execute trades more efficiently, and make better trading decisions. ITG generates superior trading results for its clients through three lines of business. POSIT, the world's largest equity matching system, allows clients to trade confidentially. The Electronic Trading Desk is recognized as one of the leading program trading operations in the U.S. ITG's leading-edge Client-Site Trading Products allow users to implement their own trading strategies by providing direct electronic access to most sources of market liquidity. For additional information, visit http://www.itginc.com.

In addition to historical information, this press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995, that reflect management's expectations for the future. A variety of important factors could cause results to differ materially from such statements. These factors include the company's ability to achieve expected future levels of sales; the actions of both current and potential new competitors; rapid changes in technology; financial market volatility; general economic conditions in the United States and elsewhere; evolving industry regulation; cash flows into or redemption from equity funds; effects of inflation; customer trading patterns; and new products and services. These and other risks are described in greater detail in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and other documents filed with the Securities and Exchange Commission and available on the company's web site.

Click Here for Financial Information

Contact:
Howard C. Naphtali
Chief Financial Officer
(212) 444-6160

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