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Undergraduate Student Managed Fund Fall 2013 Report December 5, 2013 . Fund Managers. Officers: Lead Manager: Alexander Anisimov Portfolio Manager: Eric Bourassa Secretary: Lina Posada. Managers: Robert Bailey Thomas Blankemeier David Boudreau

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Undergraduate Student Managed Fund Fall 2013 Report December 5, 2013

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Undergraduate student managed fund fall 2013 report december 5 2013

Undergraduate

Student Managed Fund

Fall 2013 Report

December 5, 2013


Undergraduate student managed fund fall 2013 report december 5 2013

Fund Managers

Officers:

Lead Manager: Alexander Anisimov

Portfolio Manager: Eric Bourassa

Secretary: Lina Posada

Managers:

Robert Bailey

Thomas Blankemeier

David Boudreau

Michael Cox

Joseph Grieco

Duston Hodgkins

Matthew Mastrogiorgio

Student Managed Fund

Fund Managers

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Agenda

  • Investment Objective and Philosophy

  • Investment Process

  • Economic Outlook

  • Portfolio Overview

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Agenda

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Investment Objective & Philosophy

  • Objective

  • Outperform the S&P 500

  • Learn to analyze as value investors

  • Philosophy

  • Search for undervalued securities based on estimation of intrinsic value compared to current market price

  • Style

  • Bottom-up approach

Student Managed Fund

Investment Objective & Philosophy

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Industry Managers

  • Basic Materials: Matthew Mastrogiorgio

  • Consumer Discretionary: Robert Bailey, David Boudreau

  • Consumer Staples: Thomas Blankemeier, Duston Hodgkins

  • Energy: Alexander Anisimov, Michael Cox

  • Financials: Thomas Blankemeier, David Boudreau, Joseph Grieco

  • Healthcare: Eric Bourassa, Robert Bailey, Alexander Anisimov

  • Industrials: Matthew Mastrogiorgio, Lina Posada

  • Real Estate: Eric Bourassa, Michael Cox

  • Transportation: Michael Cox

  • Technology: Joseph Grieco, Duston Hodgkins

Student Managed Fund

Industry Managers

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Investment Strategy

  • Search for companies with:

  • High ROE & ROIC

    • i.e. BBBY

  • Sustainable Barriers to Competition

    • i.e. AXP

  • Consistent Return to Shareholders

    • i.e. XOM

  • Strong Business Models

    • i.e. DIS

Student Managed Fund

Investment Strategy

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Investment Tools

Student Managed Fund

Investment Tools

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Investment Process

Student Managed Fund

Investment Process

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Sector Allocation

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Investment Tools

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Strength of the US Economy

  • With the Dow Jones and S&P at record highs, and interest rates low – Are we really as strong as we appear?

  • Participation Rate seems to be dropping in lockstep with Unemployment Rate – Economic recovery may not be as strong as we think

The Unemployment rate 2007 – 2013 YTD

Source: Bloomberg LP

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Economic Outlook

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Federal Reserve’s Balance Sheet

The growth of the Fed’s Balance Sheet

The economy is slowly recovering, but is not at a self-sustaining level where the Fed can taper or halt Quantitative Easing

  • Fed has grown its balance sheet from $1 trillion to $3.5 trillion

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Economic Outlook

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Macroeconomic Outlook

2013 YTD GDP Growth rates

0.5%

0.6%

1.6%

1.6%

2.1%

3.3%

4.3%

7.8%

4.1%

Student Managed Fund

Economic Outlook

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Interesting Holding- American Express

  • Purchased 1,350 shares on November 11, 2013 for $80.84 per share

  • As of November 29, we have realized a 6.13% gain on AXP

  • Closed-loop model

  • Spend-centric model

  • Attractive buyback & dividend programs

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Interesting Holding

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Undergraduate student managed fund fall 2013 report december 5 2013

Interesting Holding - NVR

  • Purchased 80 shares on November 6, 2013 for $945.00 per share

  • As of November 29, we have realized a 2.63% gain on NVR

  • Single-family homebuilder

  • Profitable for the past sixteen years

  • Unique lot acquisition strategy

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Interesting Holding

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Portfolio Approach

  • Seek to take positions at various percentage increments depending on a variety of factors

5% or under position

  • Strong fundamentals

  • Fairly valued

  • Carry more risk

5% or larger position

  • Safe/predictable

  • Strong upside potential

  • Strong downside protection

  • Very undervalued

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Portfolio Approach

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Equity Breakdown

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Portfolio Breakdown

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Portfolio Breakdown

Student Managed Fund

Portfolio Breakdown

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Portfolio Performance

  • Undergraduate SMF portfolio has underperformed the S&P 500 by 1.08% (108 BPS)

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Portfolio Performance

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Portfolio Performance

Student Managed Fund

Portfolio Performance

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Individual Stock Performance

Student Managed Fund

Portfolio Performance

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Risk Management

  • Rigorous screening and analysis process

    • Purchased half of stocks analyzed or pitched

  • Diversification across sectors to avoid aggregation risk

  • Stop-loss

  • Focus on long-term performance, not concerned with short-term volatility

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Risk Management

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Lessons Learned

  • Lessons

  • Record high market conditions

  • Corporate social responsibility

  • Moving Forward

  • Maintaining strict valuation standards

  • Corporate social responsibility initiative

  • Company price tracking

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Lessons Learned

Fall 2013 Presentation


Undergraduate student managed fund fall 2013 report december 5 2013

Acknowledgements

  • Pat Terrion

  • Jeff Annello

  • Dr. Chinmoy Ghosh

  • Dr. Michel Rakotomavo

  • Laurel Grisamer

  • Paul DeSalvo

  • Investment Advisory Board

  • IAB Advisors

  • UConn Foundation Board

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Acknowledgements

Fall 2013 Presentation


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