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Investment Process Presentation. December 8, 2009. Overview. Economic Analysis Compliance, The Delphi Process Social Responsibility Security Analysis Portfolio Optimization Portfolio Management Marketing, Exit Strategy EAFE Inverse Fund Performance. Our Funds. Haley Large Cap

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Presentation Transcript
  • Economic Analysis
  • Compliance, The Delphi Process
  • Social Responsibility
  • Security Analysis
  • Portfolio Optimization
  • Portfolio Management
  • Marketing, Exit Strategy
  • EAFE Inverse
  • Fund Performance
our funds
Our Funds
  • Haley Large Cap
    • Domestic
  • Coleman ETF
    • Domestic and International
top down investment process
Top Down Investment Process
  • Economic Analysis
  • Compliance Screen
  • Social Responsibility Screen
  • Security Analysis
  • Portfolio Optimization

Top Down Approach

      • Business Cycle Analysis
      • Industry picked off of current analysis
      • Sectors based off of selected industries
      • Best of breed individual securities selected
      • Continual monitoring to economic indicators in order to track ongoing economic cycle

Early Revival

    • The revitalization of business and consumer activity that follows a recessionary phase
      • GNP turns positive after falling sharply in the preceding recession
      • Businesses continue to clear unwanted inventory
  • Late Revival
    • GNP increases significantly
    • Growth puts upward pressure on credit demands and prices
    • Interest rates and inflation begin to rise (irregularly)
    • Housing activity picks up speed
    • Businesses build inventories and spend more on plant and equipment

Acceleration Stage

    • Consumers put off purchases, spend less
    • Interest rates and inflation begin to rise
    • Housing and auto sales decline
    • Businesses continue to build inventories and spend
  • Ease-off Stage
    • Business continue to remain optimistic
    • Economic indicators turn pessimistic
    • GNP turns negative
    • Inflation and interest rates may continue to rise
    • Housing and big-ticket item sales decline severely


    • Businesses liquidate inventories
    • Employment drops sharply
    • Corporate profits plummet
    • Interest rates peak
  • Final Analysis: Early Revival
    • GNP – Turning positive
    • Improving employment picture
selected indicators
Selected Indicators
  • ISM Data
  • Fed Funds
  • Monetary Base
  • Manufacturing Work Week
  • GNP
  • Case Schiller
  • Money Supply
    • M1
    • M2
    • M3 (Shadow Statistics)
  • Employment Data
    • Initial Unemployment
    • Continuing Claims
  • Productivity Figures
    • Hours Worked
  • Bill Carter (Qinsight) Conference Call
  • Lacy Hunt
  • Jeremy Siegel weekly newsletter
  • St. Louis Fed
  • Bloomberg
  • Wall Street Journal
  • The Economist
  • Morningstar
  • Industry Specific News
  • Maintains objectivity
  • Increases accuracy of industry forecasts
  • Process
    • 2 rounds
    • Analysts conduct industry research and rank top 10 choices
    • Re-evaluation after 1st round results
  • Round 1
    • Started with 40 industries
    • Eliminated 8
  • Round 2
    • Analysts re-evaluated industries
    • Top 20 industries selected
george coleman etf
George Coleman ETF
  • 50% International
  • 50% Domestic
haley group large cap
Haley Group Large Cap
  • Market Cap: $5 billion and greater
  • Minimum average daily volume of 250,000 shares
  • Minimum share price of $10.00
socially responsible investing
Socially Responsible Investing
  • As an Augustinian University, continue the rich tradition of Catholic Social Teaching and the guidance it provides
  • Avoid companies that ignore social responsibility
  • Recognize and incorporate companies that reflect Catholic stewardship
  • Lecture on social responsibility by Dr. Doh

1.) Evaluate the Catholic Bishop’s Statement

2.) Choose and rank our criteria based on past

evaluations and our own additions

3.) Run IWFinancial for Social Responsibility


iw financial
IW Financial
  • Proprietary research and leading independent third party services
  • Specific data sources vary by product and data element
  • A company’s rating based on “Comparative Universe”
  • Ratings based on hard data
sri profile
SRI Profile
  • High sensitivity on issues such as:
    • Bioethics
    • Environment
    • Life/Choice
    • Tobacco
    • Human Rights
    • Military
    • Adult Entertainment
  • Passing score: 66
haley large cap
Haley Large-Cap
  • Financial Health
  • DCF Valuation
  • Analyst Input and Recommendation
financial health
Financial Health
  • Altman Z-Score
    • Bankruptcy Risk
  • DuPont Ratios
    • ROE, ROA, Profit Margin, Asset Turnover, Equity Multiplier
    • Profitability
  • Balance Sheet Analysis
    • Current Ratio, Long Term Debt/Equity
    • Credit Rating
dcf valuation
DCF Valuation
  • 10 Year Growth Projections
    • Future growth rates based on analyst research
  • Invested Capital-ROIC Calculations
  • WACC
    • Cost of Debt
    • Operating Lease Commitments
analyst input and recommendation
Analyst Input and Recommendation
  • Results of Financial Health Analysis
    • Altman Z Score & Credit Rating
  • Enterprise Value
    • Upside Return Potential
  • S&P Market Insight Reports
  • Other Independent Research
coleman etf analysis
Coleman ETF Analysis
  • Domestic
    • Industries similar to Haley
    • S&P Market Insight
  • International
    • Economist Intelligence Unit (EIU)
  • Powershares, iShares, Vanguard and Morningstar
portfolio optimization1
Portfolio Optimization
  • PMSP Software
  • Stein Estimators
  • Allocation constraints
    • Iterative scaling and re-optimizing process
  • Haley Fund – 48 35 stocks
  • Coleman Fund – 26 25 ETFs
process of selecting a security
Process of Selecting a Security
  • Analyst does research
  • Analyst presents research to Investment Committee with a recommendation
  • Investment Committee votes on each security
  • A majority vote is required to invest
  • After optimization, the weights of each security are voted on
  • Example: Investment Committee votes a 5% allocation of IBM
  • Calculate number of shares
    • Current Price of $125
    • Weight of 5%
    • Portfolio Value of $100,000
    • 5% * $100,000 = $5,000
    • $5,000 / $125 = 40 Shares
orders sheet example
Orders Sheet Example

Thursday, November 12, 2009

To: Dr. Nawrocki

From: Paul Iezzi and Bob Goslin

Re: Coleman ETF Orders

the haley group large cap fund

The Haley Group Large Cap Fund

Invested on November 6, 2009


the george coleman fund

The George Coleman Fund

Invested on November 13, 2009


45.88% Domestic / 48.29% International

smf website
SMF Website

Example student Bio:

Bob GoslinBob graduated from Rowan University with a Bachelors of Science in Finance. Within the SMF he is a portfolio manager and a sector captain. In the infancy of his career in finance, he would like to be in a position that would enable him to travel and experience various cultures and industries to expand his horizons. Bob would also like to obtain his M.B.A. at Villanova within 5 years of graduation from the MSF program. Ultimately, his objective is to become a valuable and indispensable asset to a firm that he can grow with, while building professional and familiar relationships with those that surround him in his life.

information provided by website
Information Provided by Website:
  • Fund Performance Results
  • Student Bios for Undergraduate and MSF
  • Equity Society Overview
  • Link to Catholic Bishops Statement
r i s e x global investment forum
R.I.S.E. X Global Investment Forum

Marketing team is responsible for organizing this 3 day trip to Dayton, Ohio

r i s e highlights redefining investment strategy education
R.I.S.E. Highlights:Redefining Investment Strategy Education
  • Keynote Presentations by a Group of Internationally Renowned Industry Leaders
  • Specialized Breakout Sessions
  • Workshops
  • Career Strategies Forum
  • Portfolio Competition
exit strategy1
Exit Strategy
  • Stop losses set for each security in range of 5%-10% based on implied volatility
  • Target prices set for each security based on analysis and projections
  • Technical Analysis may be used for strategic buying and selling price points
the eafe inverse
The EAFE Inverse
  • Designed as a short of the MSCI EAFE Index
  • Implemented to minimize downside risk in case of market downturn
  • Key Statistic from Holding Period:
    • Actual Correlation with the MSCI EAFE: -.1533
  • Key Questions: Did the inclusion of the EAFE Inverse accomplish our goals? Can we statistically prove this?
coleman fund since investment date
Coleman Fund – Since Investment Date



villanova equity society

Villanova Equity Society

Whipkey Large Cap Fund Patrick O’Connell- CIO

Haley Mid Cap Fund Brad Thoresen- CIO


Organizational overview

Growth and development

Current initiatives

Investment process



growth and development
Growth and development

Began in the fall of 2005 with simulated funds

Ascertained funding in late 2006 and early 2007 for a large cap and mid cap fund

In late 2007 another donation was made and MSF class began management of the Haley Large Cap fund

Participation and awareness has been growing by leaps and bounds

current initiatives
Current initiatives

Training the Street, valuation seminar

Interviewing on Wall Street panel

Following up with spring competitions

Sponsor recruiting events

Evaluate prospective new members

Mentorship program

Summer connection event


Similar criteria to the Haley Large Cap Fund

Minimum average daily volume of 250,000 shares

Minimum price of $10.00

Initial weightings below 5% for a single position and 25% for a sector

social responsibility screen
Social Responsibility Screen

Haley Mid Cap

841 stocks met the initial compliance requirement

636 were eligible after running the SRI test

Whipkey Large Cap

395 stocks met the initial compliance requirement

268 were eligible after running the SRI test

economic analysis1
Economic analysis

Similar conclusions, Early Revival

Primarily a top-down strategy

Manpower is divided equally into all sectors

Looked at each sector to find the most important economic data and used that as a basis for sector concentration and security analysis

security analysis1
Security Analysis

Two part process, qualitative and quantitative


Base on the firm’s core competitive advantage and attractiveness of the sub-industry


Financial statement analysis and comparative ratios

investment committee review
Investment committee review

Analysts submit their conclusions and supporting evidence to their sector captains

Once initially screened, the better picks are sent to the other members of the sector and CIOs

Discussion within an industry between the large and mid cap analysts


Haley Mid Cap

35 stocks passed all human tests

30 stocks were entered into the optimal portfolio

Whipkey Large Cap

41 stocks passed all human tests

33 stocks were entered into the optimal portfolio


The optimized portfolios were put to an up or down vote before the entire MSF class, including Dr. Nawrocki

Once approved we entered market buy orders

Analysts are charged with following their stock, and stop losses will be put in place before the Christmas holiday