Performance Report

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Performance Report
Student Managed Fund MBA class of 2005March 3,
2005
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MBA Fund Managers

• Christophe Pane
• Luis Prandini
• Stephen Petretto
• Igor Lemagic
• Rajiv Iyer

• Jie Wan
• Ashley Martella
• Yun Cai
• Amit Kumar
• Sampita Ray
• Gabriel Joanes

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Performance Highlights (Sept 24,2004 thru
February 11,2005)
SMF PORTFOLIO S P 500
Portfolio Value (9/24/04) 410,918.25 1,110.11
Portfolio Value (2/11/05) 958,082.81() 1,205.30
Holding Period Return (9/24/04 thru 2/11/05) 11.48 8.57
Annualized Return () 29.93 22.36
Beta 0.89 1
Annualized Standard Deviation 10.04 11.11
Sharpe Ratio 2.57 1.64
Treynor Index 28.95 18.18
Alpha 4.67
An additional 500,000 was added to the
portfolio as of Jan,19 2005. Based on
risk-free rate of 4.2.
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Agenda

• Investment Methodology
• Portfolio Performance Attribution Analysis
• Economic Outlook and Allocation

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Investment Strategy and Style

• Blend Strategy
• Combination of value and growth
• Multi-Cap Fund

Market Capitalization
Small Caps 1 stock
Large Caps 23 stocks
Mid Caps 5 stocks
Number of holdings as of 02/25/05 29

• Primarily investments in large-cap stocks

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Investment Philosophy

• Fundamental analysis
• Historical performance
• Valuation models
• Business models
• Future Prospects
• Economic outlook for the industry
• Long-term (3-5 year) investment horizon
• Benchmark SP500 Index
• Selecting stocks with potential
• Close monitoring of the portfolio

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Investment Approach
Top Down Approach
Sector Allocation
Stock Selection

• Valuation Models
• PEG and P/E Models
• Dividend Discount Model
• Free Cash Flow Model

• Fundamental Analysis
• Business Model Analysis
• Ratio Analysis
• Future Prospects

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Stock Selection Criteria

• We look for
• Solid financials
• Strong management
• Earnings growth
• Attractive valuation relative to peers
• 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.
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Buy Sell Discipline

• Buy Criteria
• Steady growth rates
• Intrinsic value gt market value
• Above average expected returns
• Sell Review Criteria
• Stock reaches our target return
• Predetermined stop loss prices
• Risk/reward profile deteriorates
• Actual earnings figures lower than estimates

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Management Style

• Active Management
• Report presentation and voting
• Performance Monitoring
• Stop Loss Measures (15)
• Appreciation Reevaluation (20)
• Continuous Monitoring Dynamic Response

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Sector Allocation (as of 02/11/2005)
Top 5 sectors Financials Industrials Consumer
Disc. IT Health Care
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Detailed Sector Allocation (as of 02/11/2005)
COMPANY NAME TRADE DATE SHARES COST () CURRENTPRICE () CURRENT VALUE () RETURN OF PORTFOLIO
HEALTHCARE HEALTHCARE HEALTHCARE HEALTHCARE HEALTHCARE HEALTHCARE HEALTHCARE HEALTHCARE
Aetna Inc. 27-Oct-04 200 89.41 133.50 26,700.00 49.31 2.79
ENERGY ENERGY ENERGY ENERGY ENERGY ENERGY ENERGY ENERGY
Valero Energy 27-Oct-04 500 44.00 61.43 30,715.00 39.61 3.21
FINANCIALS FINANCIALS FINANCIALS FINANCIALS FINANCIALS FINANCIALS FINANCIALS FINANCIALS
Citigroup 22-Oct-04 500 42.80 49.40 24,700.00 15.42 2.58
Commerce Bancorp 22-Dec-04 600 60.03 57.74 34,644.00 -3.81 3.62
Hartford F. Services 12-Nov-04 350 62.00 73.76 25,816.00 18.97 2.69
ING Group (ADR) 9-Nov-04 300 26.71 29.31 8,793.00 9.73 0.92
CONSUMER STAPLES CONSUMER STAPLES CONSUMER STAPLES CONSUMER STAPLES CONSUMER STAPLES CONSUMER STAPLES CONSUMER STAPLES CONSUMER STAPLES
Coca-Cola 22-Sep-04 300 40.46 42.76 12,828.00 5.68 1.34
Walgreen's 22-Nov-04 400 37.93 42.81 17,124.00 12.87 1.79
Best Performer until 02/11
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Detailed Sector Allocation (as of 02/11/2005)
CONSUMER DISCRETIONARY CONSUMER DISCRETIONARY CONSUMER DISCRETIONARY CONSUMER DISCRETIONARY CONSUMER DISCRETIONARY CONSUMER DISCRETIONARY CONSUMER DISCRETIONARY CONSUMER DISCRETIONARY
Comcast Corp. 15-Oct-04 375 28.77 31.53 11,823.75 9.59 1.23
Starwood Hotels 28-Dec-04 350 59.01 59.00 20,650.00 -0.02 2.16
Lions Gate Entertain. 11-Feb-05 3000 10.42 10.44 31,320.00 0.19 3.27
Viacom B 6-Oct-04 500 35.21 37.44 18,720.00 6.33 1.95
INDUSTRIALS INDUSTRIALS INDUSTRIALS INDUSTRIALS INDUSTRIALS INDUSTRIALS INDUSTRIALS INDUSTRIALS
Fedex Corp. 15-Nov-04 260 95.12 98.01 25,482.60 3.04 2.66
Masco Corp. 22-Dec-04 500 36.46 37.19 18,595.00 2.00 1.94
3M Corp. 15-Nov-04 200 82.64 84.04 16,808.00 1.69 1.75
INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY
Cisco Systems 3-Dec-04 1000 19.50 17.70 17,700.00 -9.23 1.85
Flextronics 28-Dec-04 1000 13.80 14.15 14,150.00 2.54 1.48
SAP AG (ADR) 8-Feb-05 750 39.24 39.86 29,895.00 1.58 3.12
UTILITIES UTILITIES UTILITIES UTILITIES UTILITIES UTILITIES UTILITIES UTILITIES
Dominion Resources 23-Nov-04 150 66.71 70.63 10,594.50 5.88 1.11

INDEX FUND and CASH  INDEX FUND and CASH  INDEX FUND and CASH  INDEX FUND and CASH  INDEX FUND and CASH  INDEX FUND and CASH  INDEX FUND and CASH  INDEX FUND and CASH 
Vanguard SP500 Index 27-Jan-05 686 103.26 110.46 75,775.56 6.97 7.91
CASH         485,248.40   50.65
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Performance Highlights (Sept 24,2004 thru
February 11,2005)
SMF PORTFOLIO S P 500
Portfolio Value (9/24/04) 410,918.25 1,110.11
Portfolio Value (2/11/05) 958,082.81() 1,205.30
Holding Period Return (9/24/04 thru 2/11/05) 11.48 8.57
Annualized Return () 29.93 22.36
Beta 0.89 1
Annualized Standard Deviation 10.04 11.11
Sharpe Ratio 2.57 1.64
Treynor Index 28.95 18.18
Alpha 4.67
An additional 500,000 was added to the
portfolio as of Jan,19 2005. Based on
risk-free rate of 4.2.
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Portfolio Performance Attribution
Period September 24, 2004 to February 11, 2005
Excess Return Stock Selection Sector
Allocation Cash Position
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Current State of the SMF Portfolio (since Feb. 11)

• Positions Added
• Apache Corporation, PetroChina (Energy)
• Ameritrade, ETrade, MBNA (Financials)
• Invitrogen (Health Care)
• Sysco Foods (Consumer Staples)
• Dunn Bradstreet, Tyco International
  (Industrials)
• Florida Power Light Group, Inc. (Utilities)
• Positions Increased
• Comcast and Starwood Hotels (Consumer
  Discretionary)
• Hartford Financial Services (Financials)

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Portfolio Summary

• Market Value at Feb. 25, 2005 967,397
• Current number of stocks 29
• Total amount yet to be allocated 160,653
• Top 10 holdings
• Apache Corporation 4.43
• Dun Bradstreet 4.45
• Tyco International 4.24
• Hartford Financial Services
  4.12
• ETrade - 4.07
• FPL Group - 4.06
• MBNA Corporation - 4.04
• Invitrogen Corp. 3.97
• 
  

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Portfolio Summary

• Top 10 holdings
• Commerce Bancorp 3.72
• Sysco Foods 3.63

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Economic Outlook

• Expected GDP growth of over 3 for 2005, albeit
  lower than 2004.
• Core Inflation expected to rise prices rose 2.3
  from a year earlier.
• Long-term interest rates are still low
  flattening yield curve.
• Federal Reserve is expected to continue
  increasing the federal-funds rate at measured
  pace.
• Mergers-and-acquisitions market is picking up
  steam favorable development for equities.
• Situation in Iraq puts pressure on oil price and
  maintain high level of uncertainty.
• Energy,industrials,materials, utilities expected
  to lead market.

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Industry Outlook
Sector Weight Outlook
Consumer Discretionary Overweight Favorable
Consumer Staples Underweight Favorable
Energy Neutral Favorable
Financials Overweight Favorable
Healthcare Underweight Favorable
Industrials Overweight Favorable
IT Underweight Unfavorable
Materials Underweight Favorable
Telecom Underweight Unfavorable
Utilities Underweight Favorable
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WRAP UP

• Fulfilled Portfolio Objectives
• Performance surpassed SP 500
• Lower Risk Level
• Invested primarily in Large Cap U.S. Equities
• Chose only fundamentally strong companies

Top Performers Aetna (AET)-49.31 Valero
(VLO)-39.61 Hartford (HIG)-18.97
Worst Performers Cisco (CSCO)- (9.23) Pfizer
(PFE)- (16.83) CACI (CAI)- (16.98)
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Takeaways

• Valuation Highly Dependent on Analysts
  Assumptions
• Stop Losses can sometimes work against you
• Have patience
• Stick to your strategy and convictions
• Enjoy the extraordinary learning opportunity

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Thank you.

• University of Connecticut Foundation Inc.
• Investment Advisory Board
• Dr. Chinmoy Ghosh

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• Q A ?