1. Interim Report Student Managed Fund MBA class of 2004 March 11, 2004

2. 2 MBA Fund Managers  Anjana Radhakrishnan  Christopher Bodnar  Ganesh Padmanabhan  Geoffrey Munger  Heather Utter  Jessie LeBlanc  Michael Appell  Saipriya Menon  Tanzhuo Liu  Wiebke Wanner- Borchardt

3. 3 Agenda  Investment Philosophy & Approach  Investment Criteria  Portfolio Performance  Attribution Analysis  Retrospection and Self-Analysis  Economic Outlook

4. 4 Investment Philosophy  Outperform the S&P500  Strategic sector allocation  Selection of stocks with strong growth potential  Close monitoring of the portfolio  Fundamental analysis  Historical performance  Business models  Economic outlook for the industry  Valuation  Undervalued stocks  Long-term (3-5 year) investment horizon

5. 5 Investment Approach Sector Allocation Constant Portfolio Performance Monitoring Valuation PEG and P/E Models Discounted Cash Flow Economic Profit Fundamental Analysis Historical Growth Free Cash Flow Profit Margin Investment Criteria

6. 6 QuantitativeQualitative ROA Industry Growth ROECompany Market Share ROICCorporate Governance Growth in EPSInstitutional Ownership Free Cash Flow/Net IncomeInsider Trading Gross MarginMarket Power Product Differentiation Low-cost Producer Customer Relationship Retention Ratio Economic Profit Debt/Equity Beta Quantitative & qualitative factors checked across industries

7. Qualitative Investment Criteria - Portfolio OCREBAYJECINTU Industry Growth19.42%27.20%12.7%18.5% Company Market Share 2.29%17.62%12.00%3.38% Market Power  Product Differentiation  Low-cost Producer  Customer Relationship Medium High Low High Medium High Low Medium Corporate Governance 6/126/136/95/8 Institutional Ownership 95%67.44%65.50%83.38% Insider Trading7.70%-0.5%0.01%-0.30%

8. 8 OCREBAYJECINTU ROA6.18%9.10%7.86%10.27% ROE13.12%10.50%16.35%14.70% ROIC7.37%10.18%13.10%14.55% Cost of Capital6.80%8.74%8.12%7.81% Economic Profit15M62M49M159M EPS Growth28.30%84.6%34.53%96.86% FCF/NI1.301.030.731.56 Debt/Equity0.680.0200.01 Beta0.851.550.951.20 Quantitative Investment Criteria - Portfolio

9. 9 Portfolio Monitoring - Sell Criteria  Stock reaches its price objective  Industry-sector weighting exceeds predetermined limits  Risk/reward profile deteriorates  Earnings figures lower than estimates  Stop loss on all positions

10. 10 SMF Holdings – 12/26/03 Our sector allocation closely tracks the S&P500 with exceptions based on economic outlook TickerEquity Weight CONSUMER DISCRETIONARY 31.46% ALV4.21% EBAY6.12% HOTT5.85% MAT5.86% WSM4.42% YCC5.00% HEALTHCARE 29.28% GILD6.56% HSIC5.78% OCR5.27% UNH5.77% ZMH5.89%

11. 11 SMF Holdings – 12/26/03 TickerEquity Weight INFORMATION TECHNOLOGY 18.77% COGN3.36% FDC4.17% INTU5.68% MSFT5.56% INDUSTRIALS 9.15% CD5.62% JEC3.53% FINANCIALS 5.38% WFC5.38% CONSUMER STAPLES 5.97% MO5.97% Our sector allocation closely tracks the S&P500 with exceptions based on economic outlook

12. 12 SMF Holdings - Adjustments  Sold COGN and ALV  Initiated positions in: Materials: Newmont Mining (NEM) IT: Intel (INTC)  Reviewing positions in: JEC, INTU, WSM, EBAY, and OCR  Seeking positions in Energy and Telecom Sectors

13. 13 SMF Holdings – 02/17/04 TickerQuantityPurchase Price Market Value (02/17/04) HPR ALV*300$32.43$11,33716.53% CD700$21.05$16,0518.92% COGN*300$34.80$9,042-13.39% EBAY260$56.49$17,99722.55% FDC280$35.96$11,31212.35% GILD300$53.32$17,4128.85% HOTT550$27.43$16,1596.82% HSIC230$66.06$16,5058.63% INTC420$30.75$12,9490.26% INTU290$51.87$14,370-4.48% JEC200$47.86$8,712-9.27% * SOLD

14. 14 SMF Holdings – 02/17/04 TickerQuantityPurchase Price Market Value (02/17/04) HPR MAT830$19.19$15,770-0.97% MO300$51.87$16,5186.15% MSFT550$26.56$14,9001.98% NEM215$42.41$9,7296.7% OCR350$36.93$16,32826.03% UNH275$54.63$16,65710.88% WFC250$55.23$14,4804.64% WSM350$33.84$14,403-3.9% YCC500$27.71$14,1802.35% ZMH230$69.74$17,84811.27%

15. 15 SMF Holdings – Performance SMFS&P 500 Return 11.28%11.96% Annualized Return 23.47%24.97% Beta 1.0141.00 Annualized Standard Deviation 7.67%7.46% Sharpe Ratio 2.672.93 Treynor Index 20.19%21.87% Period: Sep 4, 2003 – Feb 17, 2004

16. 16 Attribution Analysis  Analyze determinants of portfolio performance  Sector allocation decisions  Equity selection decisions  Sector Allocation and Equity Selection Effect Determinants  Sector-wise weights and returns of the Portfolio  Sector-wise weights and returns of the S&P 500 index  Overall holding period returns of the S&P500  Analysis Period: Dec 26, 2003 – Feb 17, 2004  S&P 500 holding period return: 5.58%  Portfolio holding period return: 3.27%  Total value added: -2.31%

17. 17 Sector Allocation Effect SectorsWai - WpiRpi - Rp {(Wai - Wpi)* (Rpi - Rp)} Consumer Disc.20.17%-2.1386%-0.4314% Consumer Staples-5.03%-0.4047%0.0203% Energy-5.79%0.8799%-0.0510% Financials-15.25%2.2509%-0.3433% Health Care15.97%1.1151%0.1780% Industrials-1.82%-2.4278%0.0441% IT1.04%-0.8548%-0.0089% Materials-3.05%-5.1317%0.1565% Telecomm Services-3.38%7.6488%-0.2587% Utilities-2.85%-2.1540%0.0615% Sector Allocation Effect-0.6328% LEGEND Wa i -- MBA Wts As of Dec 26 2003 Wp i -- S&P Wts as of Dec 26 2003 Rp i -- S&P Sector returns {12/26 to 2/17} Rp -- S&P Overall Return {12/26 to 2/17} {(Wa i - Wp i )* (Rp i - Rp)} -- Sector Allocation Effect

18. 18 Equity Selection Effect SectorsWaiR ai - R pi Wai * Rai - Rpi Consumer Disc.31.46%0.873%0.27% Consumer Staples5.97%-2.375%-0.14% Energy0.00%-6.455%0.00% Financials5.38%-8.724%-0.47% Health Care29.28%0.757%0.22% Industrials9.15%-2.932%-0.27% IT18.77%-7.833%-1.47% Materials0.00%6.726%0.00% Telecomm Services0.00%-13.224%0.00% Utilities0.00%-3.421%0.00% Selection Effect-1.85% LEGEND Wa i -- MBA Wts As of Dec 26 2003 Ra i -- MBA SMF Sector Returns {12/26 to 2/17} Rp i -- S&P Sector returns {12/26 to 2/17} Rp -- S&P Overall Return {12/26 to 2/17} {(Wa i - Wp i )* (Rp i - Rp)} -- Sector Allocation Effect Total Value Added = Sector Allocation Effect + Equity Selection Effect = - 2.48%

19. 19 Attribution Analysis Observations from Analysis  Impact of allocation effect more favorable than that of the selection effect  Review both allocation & selection strategies  Benefit from future investments in un-invested sectors Over-weighted Sectors  Consumer Discretionary, Health Care, IT Under-weighted Sectors  Consumer Staples, Financials, Industrials, Materials Un-invested Sectors  Utilities, Energy, Telecom

20. 20 Retrospection and Self-Analysis Sector Allocation  Use S&P 500 Sector Allocation as a guide  Make adjustments based on Industry Research Stock Selection  Growth vs. Value Stocks  Cyclical vs. Non-Cyclical Stocks  Benchmark Risk Underperforming Stocks  Sound Fundamentals vs. Poor Price Momentum  Hold, Add, or Sell

21. 21 Outlook  Continued economic strength  Growth at a more moderate pace  Continued stock market strength  Modest interest rate increase

22. 22 Impact  Overweight IT and Healthcare  Be aware of interest rate sensitivity of holdings  Select stocks leveraged to the current economic environment

23. 23 Activity Update As of Mar 05, 2004  Received additional $150,000 from the Foundation  Initiated positions in: WAG, NXTL, CTSH  Stock selection process underway

24. 24 Thank you University of Connecticut Foundation Inc. Investment Advisory Board Dr. Chinmoy Ghosh

25. 25 Questions?