Interim Report

Student Managed Fund MBA class of 2004

November 14, 2003

2

Agenda

Investment Philosophy & Approach

Investment Process

Sector Allocation

MBA Fund Holdings & Investment Criteria

Future Outlook

3

Investment Philosophy

Strive to outperform the S&P500 Selecting stocks with strong growth potential Closely monitoring the portfolio

Rely on fundamental analysis Historical performance Business models Economic outlook for the industry

Equal sector allocation Subject to re-evaluation due to economic

changes and the increased experience of the group

Long-term (5 year) investment horizon

4

Stock Market Universe

Sector Allocation and Industry

Selection

Traded Stocks

Business Model Analysis

Competitors and Market Share

Products and Customers

Industry Outlook

Economic Situations

Risk vs. Return

Investment Approach

5

Stock Selection Criteria

We look for:

Solid financials

Strong management

Earnings growth

Attractive valuation relative to the index

Higher return/risk relative to industry

6

Stock Selection Criteria (continued)

Buy Criteria:

Steady growth rates

Intrinsic value > market value

Above average yields

Upside-downside ratio of at least 2

Sell Criteria:

Stock reaches its price objective

Industry-sector weighting exceeds

predetermined limits

Risk/reward profile deteriorates

Earnings figures lower than estimates

7

Investment Process

Sector Allocation/Equity Identification Sector Assignments Filtering Equal Allocation

Fundamental Analysis Financial Statements Analysis Trend Analysis

8

Investment Process (continued)

Valuation Business Model Analysis Intrinsic Value PEG Ratio NAICS CAPM Risk Factors (Internal & External)

Performance Monitoring Stop Loss Measures (20%) Appreciation Reevaluation (30%) Continuous Monitoring & Dynamic Response

9

S&P 500 Sector Allocation

Big Four:

• Financials

• Information Technology

• Consumer Discretionary

• Health Care

10

SMF Sector Allocation

As of 11/12/03

Budget not yet

fully allocated

Materials, 15%

Financials, 23%

Consumer Discretionary

, 20%

Information Technology,

17%

Healthcare, 24%

11

SMF Holdings

Equal

weightings

of sectors

and initial

investments

($10,000 to

$15,000)

TickerDate of

PurchaseQuant

ityPurchase

PricePrice

(11/13/03)

Market Value

(11/12/03)

% Basic Gain

ALV 10/29/03 300 $32.43 $33.68 $10,104 3.54%

CD 11/12/03 700 $21.03 $21.40 $14,980 1.65%

COGN 10/31/03 300 $34.80 $35.58 $10,674 1.95%

GILD 11/12/03 300 $53.30 $55.04 $16,512 3.23%

FDC 11/04/03 280 $35.90 $37.08 $10,382.40 2.81%

HOTT 11/12/03 550 $27.43 $27.53 $15,141.50 0.09%

JEC 10/24/03 200 $47.86 $43.57 $8,714 -9.25%

OCR 11/05/03 350 $36.93 $38.36 $13,426 3.63%

TOL10/14/0311/04/03

100150

$34.96$38.01

$38.79 $9,697.50 4.75%

WFC 11/05/03 250 $55.23 $57.16 $14,290 3.27%

12

SMF Holdings

Amount Invested in Individual Equities = $121,537.8

Market Value = $123,921.40

% Basic Gain/Loss = 1.96%

Initial Holdings on 9/4/03 = $251,741.00

Market Value on 11/12/03 = $ 261,250.76*

Total % Basic Gain/Loss = 3.78%*

S&P 500 Return (9/4/03-11/13/03) = 2.96%

(*Market value of SMF holdings at close on 11/13/03)

13

Investment Criteria

Quantitative Qualitative

ROA Industry Growth

ROE Company Market Share

ROIC Corporate Governance

Growth in EPS Institutional Ownership

Free Cash Flow/Net Income Insider Trading

Gross Margin (%) Market PowerProduct Differentiation Low-cost ProducerCustomer Relationship

Retention Ratio

Economic Profit

Debt/Equity

Beta

Quantitative

& qualitative

factors

checked

across

industries

14

Qualitative Investment Criteria - PortfolioALV COGN FDC JEC OCR TOL WFC

Industry Growth

23.23% 6.80% 10.81% -5.0% 6.12% 20.34% 6.90%

Company Market Share

31% airbags33% sidebags15% steering wheel14% safety electronics

0.40%

75% money transfer40% merchant processing25% card-issuing services

12.58% 1.4% 4.78% 17.71%

Market Power

Product Differentiation

Low-cost Producer

Customer Relationship

High

High

High

High

High

High

High

High

High

Medium

Medium

High

Medium

High

High

High

High

High

Medium

Medium

High

Corporate Governance

8/11 7/8 5/9 6/9 6/12 7/11Data not available

Institutional Ownership

99.05% 66.60% 95% 77.80% 95.6% 60.30% 67%

Insider Trading

0.07% 0% 1.13% 2.70% 25% 5.5% 0.11%

15

  ALV COGN FDC JEC OCR TOL WFC

ROA 3.72% 9.13% 5.00% 5.30% 3.50% 7.67% 1.41%

ROE 7.30% 15.80% 26.93% 13.67% 7.00% 20.83% 15.53%

ROIC 10.12% 16.93% 18.17% 23.93%19.93

%13.04% 10.54%

Cost of Capital 7.29% 8.94% 8.00% 7.87% 6.80% 7.02% 6.68%

Economic Profit 3.89M 40.4M 718M 73.05M 19.08M 90.29M 2.091B

EPS Growth 63.70% 6.96% 23.51% 34.53%44.77

%29.43% 16.29%

FCF/NI 68.30% 152% 129.46% 71.20% 46.3% -109% n/a

Gross Margin 17.91% n/a 42.17% 13.73%29.64

%8.95% n/a

Ret. Ratio 51% 100% 96% 100%90.67

%100% 61%

Debt/Equity 0.54 0 0.71 0 0.65 0.69 1.45

Beta 1 1.2 1.13 0.95 0.78 1.1 1.05

Quantitative Investment Criteria - Portfolio

16

Qualitative Investment Criteria - PortfolioALV COGN FDC JEC OCR TOL WFC

Industry Growth

23.23% 6.80% 10.81% -5.0% 6.12% 20.34% 6.90%

Company Market Share

31% airbags33% sidebags15% steering wheel14% safety electronics

0.40%

75% money transfer40% merchant processing25% card-issuing services

12.58% 1.4% 4.78% 17.71%

Market Power

Product Differentiation

Low-cost Producer

Customer Relationship

High

High

High

High

High

High

High

High

High

Medium

Medium

High

Medium

High

High

High

High

High

Medium

Medium

High

Corporate Governance

8/11 7/8 5/9 6/9 6/12 7/11Data not available

Institutional Ownership

99.05% 66.60% 95% 77.80% 95.6% 60.30% 67%

Insider Trading

0.07% 0% 1.13% 2.70% 25% 5.5% 0.11%

17

  ALV COGN FDC JEC OCR TOL WFC

ROA 3.72% 9.13% 5.00% 5.30% 3.50% 7.67% 1.41%

ROE 7.30% 15.80% 26.93% 13.67% 7.00% 20.83% 15.53%

ROIC 10.12% 16.93% 18.17% 23.93%19.93

%13.04% 10.54%

Cost of Capital 7.29% 8.94% 8.00% 7.87% 6.80% 7.02% 6.68%

Economic Profit 3.89M 40.4M 718M 73.05M 19.08M 90.29M 2.091B

EPS Growth 63.70% 6.96% 23.51% 34.53%44.77

%29.43% 16.29%

FCF/NI 68.30% 152% 129.46% 71.20% 46.3% -109% n/a

Gross Margin 17.91% n/a 42.17% 13.73%29.64

%8.95% n/a

Ret. Ratio 51% 100% 96% 100%90.67

%100% 61%

Debt/Equity 0.54 0 0.71 0 0.65 0.69 1.45

Beta 1 1.2 1.13 0.95 0.78 1.1 1.05

Quantitative Investment Criteria - Portfolio

18

Outlook

Strong economic growth likely

Adjust sector allocation to economic outlook

Monitor portfolio to maximize value

Invest funds quickly, but wisely

Beat benchmark

Positive market returns expected

19

MBA Fund Managers

Michael Appell

Jessie LeBlanc

Tanzhuo Liu

Saipriya Menon

Geoffrey Munger

Ganesh Padmanabhan

Anjana Radhakrishnan

Heather Utter

Wiebke Wanner-Borchardt

20

Thank you

University of Connecticut Foundation Inc.

Investment Advisory Board

Steering Committee

Dr. Chinmoy Ghosh

21

Questions