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Student Managed Fund

Student Managed Fund. 2005-2006 Undergraduates. “ Allocation, Selection, Performance ”. Rasha Ayoub Diksha Gagrani Suzanne Galasso Frederick Karrat Anna Kawa Ryan Krueger Lead Manager. Yegor Makhiboroda Lead Manager Sarin Mathur Steven McCarthy Ryan Pape Gregory Rozolsky

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Student Managed Fund

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  1. Student Managed Fund 2005-2006 Undergraduates “Allocation, Selection, Performance”

  2. Rasha Ayoub Diksha Gagrani Suzanne Galasso Frederick Karrat Anna Kawa Ryan Krueger Lead Manager Yegor Makhiboroda Lead Manager Sarin Mathur Steven McCarthy Ryan Pape Gregory Rozolsky Michael Russell Nathan Speicher 2005 – 2006 Managers

  3. Mission Statement To use techniques learned in the classroom and apply them to real world investments in order to achieve superior returns

  4. Portfolio Objectives • Outperform the S&P 500 Index • Develop a well-diversified portfolio • Select companies with proven track records • Invest in companies with greater than 10% annual required rate of return over a 5-10 year period • Invest assets quickly, prudently, and efficiently

  5. Investment Process: “Focused” Approach • Select Industries that meet our investment criteria – ROIC, consistency and growth • Follow Industry trends • Identify “best of breed” companies that we believe will outperform peers • Perform analysis of “best of breed” to determine which securities are financially sound investments • Identify companies that will provide growth that can be purchased at a reasonable price

  6. Equity Selection Criteria • Review financial statements Annual Reports, 10k, Press Releases • Financial Strength Cash flow Strong credit rating Safe leverage ratios • Probability of companies success Proven track record Consistent cash flow and ROE Strong management • Accounting Practices Consistent auditors Earnings released on time

  7. Equity Analysis • Company’s Past • Future -Trends, Earnings • Risks -Industry, Macro, Company • Fundamental Analysis • Ratio Analysis -D/E, Profit • Value -Yield, P/E • Efficiency -ROE, Margins

  8. Financial Models • Capital Growth Model Calculates FV of capital in 10 years; discounts using required rate of return to obtain buy price with a greater than 10% return • Discounted Cash Flow Analyzes growth using projected future cash flows to obtain a current purchase price • FCF Yield per Share Calculates free cash flow yield per share with a target of return greater than the Risk Free Rate

  9. Portfolio Return

  10. 25% SMF S&P 500 20% 15% 10% 5% 0% Energy Utilities Telecom Industrial Materials Info Tech Financials Health Care Consumer Staples Consumer Discretionary Industry Allocation *Portfolio allocation includes SPY

  11. Individual Stock Performance *returns adjusted to include dividends **includes closed positions

  12. Current Holdings Portfolio Value (2/17/06): $966,920.49

  13. Current Holdings

  14. Performance: Value vs. Growth Value Growth *Does not include SPY

  15. Current Allocation: Value vs. Growth *Does not include SPY

  16. Current Allocation: Value vs. Growth

  17. Risk Adjusted Performance

  18. Performers • Whole Foods Market Inc. (-6.11%) • El DuPont de Nemours & Co. (-4.88%) • Mylan Laboratories Inc. (13.71%) • News Corp. Inc. (10.80%)

  19. Recent News • Sale of WFMI • Trailing Stop Loss order triggered on February 9th at $66.00 • Stop Loss prevented further losses, WFMI closed at $63.60 on February 17, 2006 • Currently Researching: • United Health Group • Deutsche Bank • Cameco Corporation • Lawson Products

  20. Economic Outlook • Cautious outlook due to the current economic environment • High energy prices, slowing housing market and rising interest rates • Moderate growth in the economy • Continue disciplined investment approach • Companies with a margin of safety

  21. Conclusions • Continue disciplined approach • Track emerging commodity and interest rate trends • Continue to invest in blend of value and growth • Monitor portfolio • Confident that portfolio will perform over 5-10 years investment horizon

  22. Thank You • The Foundation • The Advisory Board • Steering Committee • Professor Ghosh • Patrick Terrion

  23. Questions?

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