UNIVERSITY OF CONNECTICUT Student Managed Fund

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UNIVERSITY OF CONNECTICUT Student Managed Fund

• November 14, 2003
• Undergraduate Portfolio

Julia Yelevich George Kruglov
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Portfolio Objectives

• Outperform the SP 500 index
• Develop a well-diversified portfolio within a
  fluctuating market environment
• Select holdings with low-medium risk
• Invest in companies with 15 required rate of
  return

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Mission

• Employing a systematic approach that consists of
  both quantitative and qualitative elements in
  order to identify companies that possess an above
  average return potential.

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Asset Allocation

• 100 Domestic Equities
• Diversified portfolio
• Starting fund sum 200,577
• Holdings with Low-Medium Risk

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Equity Allocation
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Procedures for Allocation

• Selection of companies based on potential growth
  and stability
• Consolidated research efforts
• Screening of equities based on future growth,
  qualitative and quantitative analysis within
  required constraints

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Investment Process A Disciplined Approach
Company Selection
Quantitative Analysis
Qualitative Analysis
Consensus
Portfolio MonitoringRe-optimization Stop
Loss/Review Analysis
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Equity Selection Criteria

• Perform an intensive, inferential analysis of the
  historical and current information contained in
  disclosed financial statements
• Footnotes, shareholder reports, other filings
• Financial Strength
• Companies who generate excess cash
• Probability of future projections
• Accounting Practices
• Scrutinize accounting and reporting practices

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Equity Analysis

• Financial Statements
• Debts
• Cash Flows
• Sales/fixed asset ratio
• Value
• Required rate of return
• Intrinsic value
• Yield
• P/E
• Efficiency
• ROI, ROE, Operating Profit Margin

• Begin analysis
• Companys Past
• Historical data
• Past performance
• Future Assumptions
• CF/Earnings Projections
• Growth Rate
• External forces
• Market Trend
• Downside Risk
• Worst case scenarios
• Competition

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Continue Analysis

• Annual Reports
• Financial Statements
• Debt, Capital, CF
• Accounting Practices
• front end
• purchase accounting
• Unjust optimism
• Reversal of reserves to meet earning targets
• Different reporting methods

• Management
• Board of directors
• Insider Trading
• SEC Filings
• Sarbanes Oxley
• 404
• 302

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Financial Models

• Value-line Model
• Estimate of FV of equity in 10 years, discounted
  using our required rate of return to find buy
  price
• Discounted Cash Flow Model
• Growth is analyzed to determine todays stock
  price based on projected Cash Flows
• ValuePro.com
• Earnings Yield Model
• Measures yield power with earnings growth
• P/E Model
• Measures the value of the stock price as
  determined by the market

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Monitor and Review

• Review
• 20
• Stop loss
• 15 -25
• Earning Announcements
• Headline News
• Market factors
• Daily portfolio Performance

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Portfolio Gains/Losses
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Portfolio Statistics
Total Purchase 99,471.25 Net Change
4,688.00 Percentage Change 4.71
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Portfolio Optimization

• Earnings Reports
• Industry Changes
• Economic Reports
• Major Company News
• Continuously seek out new investments for
  changing market conditions
• Eliminate Emotion and Speculation

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Conclusion

• Stock Selection and Market Conditions
• Stability and Confidence
• Surpass the S P 500

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SMF vs. SP500
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Thank You

• The Foundation
• The Advisory Board
• Faculty
• Patrick Terrion, Professor Ghosh, Steering
  Committee, Advisory Board

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QUESTIONS?