MBA Student Managed Fund Presentation to the University of Connecticut Foundation April 24, 2003

Today’s Agenda SMF Performance vs. S&P 500 Investment Philosophy Portfolio Strategy Lessons Learned Market Outlook Questions

April 24, 2003 MBA Portfolio Managers Ventzislav Adamov Amitabh Basak Eliza Biedziak Lily Ding Radu Popescu Xin Shi Monica Simsek Vasim Vasgare Wiebke Wanner-Borchardt

April 24, 2003 SMF vs. S&P 500 S&P 500SMF Sep. 30, 2002 $815.28$199, Apr. 11, 2003 $868.30$214, Return 6.50%7.27% SMF has outperformed S&P 500 SMF Fund’s overall return is 7.27%

April 24, 2003 Investment Philosophy Initially  Uncertain outlook led to conservative approach  Strong confidence in Health Care and Consumer Staples  Low confidence with IT and Financials Now  Remain confident in Consumer Staples  Guarded optimism for economic turnaround

April 24, 2003 Stock Selection Criteria We look for: – Solid financials – Strong management – Consistent earnings growth – Attractive valuation relative to the index – Higher Return/Risk relative to market Buy Criteria Steady growth rates Intrinsic value >market value Above average yield 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 In total, we have analyzed 53 stocks.

April 24, 2003 Stocks Presented Armor Holdings  International Flavors & Fragrances Pfizer First Data Corporation Cognizant  Exxon New York TimesJohnson Outdoors Wrigley Washington Mutual General Dynamics  Group 1 Automotive  WellPoint Health Diebold, Inc. American ExpressBally Total Fitness Petro-CanadaSpartan Motors Inc. Abbott Laboratories Sysco Corporation Metlife British Petroleum Alliant TechsystemsTJX Companies PepsiCo MacDermid purchased  sold  not purchased

April 24, 2003 Stock Selection Process Search for stocks in respective sectors that match our investment philosophy and selection criteria Do you think this will outperform the market in the long run ? Prepare Stock Valuation Report and submit it to the group for VOTING Does the group think that this stock will outperform the market ? Recommend this stock for a BUY Yes No Yes No

April 24, 2003 Methodology Financial Analysis: News and recommendations: Yahoo! Finance, MSN Money Central, Quicken, Value Line, Reuters, Multex Investor, Wall Street Journal Value Line: Safety Rank and Beta Models: DDM,FCFE, Zero Growth, SSG Relative Valuations: P/E Benchmarking Stop-loss:15% depreciation from buy price Upside review price between: 15% and 30% appreciation

April 24, 2003 SMF Holdings ( as of 04/11/03 )

April 24, 2003 SMF Holdings Why ~65% invested in S&P 500 Index Fund?  Inability to find individual stocks satisfying our strict buying criteria due to high volatility and continuously changing market, economic, and political situation  Adopted a conservative approach at the beginning  Could not utilize the funds in the short term after converting them to S&P Fund from Bonds

April 24, 2003 Best Performers

April 24, 2003 Worst Performers

April 24, 2003 Analyst Report: Abbott Labs Business Model Analysis Financial Data Benchmark Valuation Models: Is this a good company? Is the stock a good value? Is the stock a buy? Risk Factors Recent News SWOT Analysis (Strengths – Weaknesses – Opportunities – Threats)

April 24, 2003 Analyst Report: Abbott Labs Report Value Line Investment Survey SSG

April 24, 2003 Analyst Report: Abbott Labs

April 24, 2003 Managerial Performance - % of Pretax Profit Sales - % Earned on Invested Capital Risk vs. Reward Analysis: Is the stock in a buy zone? Total Return: 5-year potential

April 24, 2003 Lessons Learned Stock selection process  Holistic approach with emphasis on company’s business risks Identify right stock that matches our value growth investing strategy  Focus on fundamental analysis and on stocks with growth potential and low volatility Upside review and Sell discipline  Act in timely manner

April 24, 2003 Lessons Learned Analyze impact of geopolitical issues on market behavior Look at macroeconomic trends Understand investor’s reactions to economic indicators Look for management shenanigans Analyze 10k reports and pay particular attention to footnotes

April 24, 2003 Going Forward Opportunities: Military victory in Iraq raises prospects for economic turnaround  Administration’s fiscal stimulus program promoting growth – Possible elimination of double taxation on dividends  Improved GDP growth

April 24, 2003 Going Forward (cont.) Risks and Threats: Geopolitical concerns still prey on the minds of business executives Issues concerning Post-war Iraq and negative economic data making businesses cautious on spending Ballooning Federal budget deficit raises concerns

April 24, 2003 Suggestions: Maintain Risk Control as volatility is high because investors are looking at weekly economic indicators Invest in Consumer Staples Going Forward (cont.)

April 24, 2003 Thank you to: University of Connecticut Alumni Foundation Investment Advisory Board Dr. Chinmoy Ghosh Mr. Pat Terrion Karthik Krishnan

Questions?