MBA Student Managed Fund Class of 2005 University of Connecticut School of Business

1. MBA Student Managed Fund Class of 2005 University of ConnecticutSchool of Business

2. Agenda • Investment Strategy & Style • Investment Philosophy • Investment Process & Criteria • MBA Fund Holdings • Future Outlook

3. Investment Strategy and Style • Top down approach • Blend Strategy • Combination of Value and growth • Multi-cap Fund • Primary Investments in Large-cap Equities

4. Investment Philosophy • Strive to outperform the S&P500 • Selecting stocks with growth potential • Closely monitoring the portfolio • Rely on fundamental analysis • Historical performance • Future Prospects • Business models • Economic outlook for the industry • Long-term (3-5 year) investment horizon

5. Investment Approach • Business Model Analysis • Entry Exit barriers • Consumer & Supplier Power • Threat of Substitutes Competitor Evaluation Market Share Analysis Select Stocks Sector Allocation and Industry Selection Risk vs.Return Analysis Industry specific Outlook Economic Outlook Stock Market Universe

6. Methodology Sector Allocation Tools & Techniques • Valuation Models • P/E Model • Dividend discount model • Free cash flow model • Fundamental Analysis • Business Model Analysis • Ratio Analysis • Future Prospects Constant Portfolio Performance Monitoring (Stop Loss and Appreciation Reevaluation)

7. Stock Selection Criteria We look for: • Solid financials • Strong management • Earnings growth • Attractive valuation relative to the index • Higher return/risk relative to industry “If the choice is between a questionable business at a comfortable price or a comfortable business at a questionable price, we much prefer the latter.”

8. Buy & Sell Discipline • Buy Criteria • Steady growth rates • Intrinsic value > market value • Above average yields • Sell Criteria • Stock reaches its price objective • Industry-sector weighting exceeds predetermined limits • Risk/reward profile deteriorates • Earnings figures lower than estimates

9. Management Style • Active Management • Report presentation and Voting • PerformanceMonitoring • Stop Loss Measures (15%) • Appreciation Reevaluation (20%) • Continuous Monitoring & Dynamic Response

10. Sector Allocation: S&P 500 Weights vs. SMF Weights

11. SMF Holdings

12. SMF Holdings

13. SMF Holdings • Initial Market Value on 9/22/04 = $414,336.95 • Market Value on 12/02/04 = $443,794.30* • Total % Gain/Loss = 7.11%* • S&P 500 Return (9/22/04-12/02/04) = 6.89% • SMF Portfolio Beta = 0.95 • Portfolio Risk-Adjusted Return =6.61% • S&P Risk-Adjusted Return = 6.08% • Outperform by 0.53% over holding period

14. Investment Criteria

15. Quantitative Investment Criteria - Portfolio

16. Quantitative Investment Criteria - Portfolio

17. Helps our Current Equity Holdings – 3M, Citigroup, Pfizer, Coca Cola, and others. Increased Revenue and better capability of competing against foreign companies in the US. Increased Global Demand for Energy Sector products such as Coal. The Falling Dollar!

18. Higher Oil Prices • Higher Oil Prices could cool sectors such as Transportation. • Increased Cost of Transportation will affect Brick and Mortar Companies. • Industrial Operating Profits may take a hit next year.

19. Inflation? • Gold Prices at an all time high since 1988 – Usually a hedge against Inflation. • The Market as a whole could react badly to an inflation scare.

20. Sector Re-Evaluation Possible Downgrades • Transportation • Biotech and Pharmaceuticals Possible Upgrades • Energy • Financial • Retail

21. Scheduled Work for 2005 • Re-evaluation of Current Sector Allocations. • Complete Portfolio Management. • Re-evaluation of Amount Invested in Current Holdings. • Strong Equity Picks based on Quantitative and Qualitative Analysis. • Outperform the S&P 500 Index.

22. Questions ?