Student Managed Fund Undergraduates “Allocation, Selection, Performance”

2005 – 2006 Managers Rasha Ayoub Diksha Gagrani Suzanne Galasso Frederick Karrat Anna Kawa Ryan Krueger –Lead Manager Yegor Makhiboroda –Lead Manager Sarin Mathur Steven McCarthy Ryan Pape Gregory Rozolsky Michael Russell Nathan Speicher

To use techniques learned in the classroom and apply them to real world investments in order to achieve superior returns Mission Statement

Outperform the S&P 500 Index Develop a well-diversified portfolio Select companies with proven track records Invest in companies with greater than 10% annual required rate of return over a 5-10 year period Invest assets quickly, prudently, and efficiently Portfolio Objectives

Investment Process: “Focused” Approach 70% Majority Vote Quantitative & Qualitative Analysis Company Analysis Industry Overview 1.Select Industries that meet our investment criteria – ROIC, consistency and growth 2.Follow Industry trends 3.Identify “best of breed” companies that we believe will outperform peers 4.Perform analysis of “best of breed” to determine which securities are financially sound investments 5.Identify companies that will provide growth that can be purchased at a reasonable price

Equity Selection Criteria Review financial statements Annual Reports, 10k, Press Releases Financial Strength Cash flow Strong credit rating Safe leverage ratios Probability of companies success Proven track record Consistent cash flow and ROE Strong management Accounting Practices Consistent auditors Earnings released on time

Company’s Past Future - Trends, Earnings Risks - Industry, Macro, Company Fundamental Analysis Ratio Analysis - D/E, Profit Value - Yield, P/E Efficiency - ROE, Margins Equity Analysis

Financial Models Capital Growth Model Calculates FV of capital in 10 years; discounts using required rate of return to obtain buy price with a greater than 10% return Discounted Cash Flow Analyzes growth using projected future cash flows to obtain a current purchase price FCF Yield per Share Calculates free cash flow yield per share with a target of return greater than the Risk Free Rate

Portfolio Return September 30, 2005February 17, 2006 Total Portfolio$929,882.74$966, Equity$928,336.80$862, Money Market$1,545.00$104, PeriodReturn on SMFReturn on S&P (09/30/05-02/17/06)3.98%4.83%

Industry Allocation *Portfolio allocation includes SPY

*returns adjusted to include dividends **includes closed positions Individual Stock Performance

Current Holdings Portfolio Value (2/17/06): $966,920.49

Company Name (Ticker)Shrs. Purchase Price Current PriceDiv. Total ReturnGain/Loss Current Value BARRICK GOLD CORP. (ABX) $ %$2,293.20$42, AMGEN INC. (AMGN) $ %$197.95$40, BERKSHIRE HATH HLD B (BRK-B) $ %$255.00$49, ANHEUSER-BUSCH COMPANIES INC. (BUD) $ %$988.00$51, CBS CORP CL B (CBS) $ %$112.50$11, CDW CORP. (CDWC) $ %$1,145.88$41, COMCAST CORP. (CMCSA) $ %$68.10$29, CHEVRON CORP. (CVX) $ %($455.00)$40, EL DUPONT DE NEMOURS & CO. (DD) $ %($2,470.68)$48, HOME DEPOT INC. (HD) $ %($676.80)$39, INTEL CORP. (INTC) $ %$0.00$39, COCA-COLA CO. (KO) $ %$156.00$40, MICROSOFT CORP. (MSFT) $ %$2,514.23$27, MYLAN LABORATORIES INC. (MYL) $ %$4,095.00$33, NEWS CORP. (NWS-A) $ %$3,244.80$33, CONSTELLATION BRANDS INC. (STZ) $ %$2,392.00$32, STRYKER CORP (SYK) $ %$535.50$30, TYCO INTERNATIONAL LTD (TYC) $ %$129.93$51, VIACOM INC. (VIA-B) $ %$1,881.00$19, ZIMMER HOLDINGS INC. (ZMH) %$1,170.00$31, $733, Current Holdings

ValueGrowth Performance: Value vs. Growth *Does not include SPY

Current Allocation: Value vs. Growth *Does not include SPY

Value PositionsTicker % of Equity PositionsGrowth PositionsTicker % of Equity Positions BARRICK GOLD CORP.ABX5.55%AMGEN INC.AMGN5.28% BERKSHIRE HATH HLD BBRK-B6.49%CDW CORP.CDWC5.42% ANHEUSER-BUSCHBUD6.75%HOME DEPOT INC.HD5.18% CBS CORP CL BCBS1.53%STRYKER CORPSYK4.02% COMCAST CORP.CMCSA3.93%VIACOM INC.VIA-B2.54% CHEVRON CORP.CVX5.27%ZIMMER HOLDINGS INC.ZMH4.14% EL DUPONT DE NEMOURS & CO.DD6.34% INTEL CORP.INTC5.27% COCA-COLA CO.KO5.37% MICROSOFT CORP.MSFT3.62% MYLAN LABORATORIES INC.MYL4.46% NEWS CORP.NWS-A4.39% CONSTELLATION BRANDS INC.STZ4.34% TYCO INTERNATIONALTYC6.76% Current Allocation: Value vs. Growth

Risk Adjusted Performance Return on Portfolio (Rp)Return on S&P (Rsp) Risk Free Rate (Rfr) Annualized Return 10.61%12.87%4.34% 10-yr T-Bond (09/30/05) Excess Return (Rp- Rfr) 6.27%8.53% Risk (Weighted Average Beta) Treynor Index T=[(Rp-Rfr)/B] Sharpe S=[(Rp-Rfr)/Std Dev Portfolio Attribution Portfolio Excess Return Allocation EffectSelection Effect %-0.128%-0.589%

Performers Whole Foods Market Inc. (-6.11%) El DuPont de Nemours & Co. (-4.88%) Mylan Laboratories Inc. (13.71%) News Corp. Inc. (10.80%)

Recent News Sale of WFMI Trailing Stop Loss order triggered on February 9 th at $66.00 Stop Loss prevented further losses, WFMI closed at $63.60 on February 17, 2006 Currently Researching: –United Health Group –Deutsche Bank –Cameco Corporation –Lawson Products

Economic Outlook Cautious outlook due to the current economic environment High energy prices, slowing housing market and rising interest rates Moderate growth in the economy Continue disciplined investment approach Companies with a margin of safety

Conclusions Continue disciplined approach Track emerging commodity and interest rate trends Continue to invest in blend of value and growth Monitor portfolio Confident that portfolio will perform over 5-10 years investment horizon

Thank You The Foundation The Advisory Board Steering Committee Professor Ghosh Patrick Terrion

Questions?