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

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. Agenda

• Investment Philosophy & Approach

• Investment Criteria

• Portfolio Performance

• Attribution Analysis

• Retrospection and Self-Analysis

• Economic Outlook

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. Investment Approach Sector Allocation Constant Portfolio Performance Monitoring

Valuation

PEG and P/E Models

Discounted Cash Flow

Economic Profit

FundamentalAnalysis

Historical Growth

Free Cash Flow

Profit Margin

Investment Criteria 6. Investment Criteria Quantitative & qualitative factors checked across industries Economic Profit Debt/Equity Beta

Market Power

• Product Differentiation

• Low-cost Producer

• Customer Relationship

Retention Ratio Gross MarginInsider Trading Free Cash Flow/Net Income Institutional Ownership Growth in EPS Corporate Governance ROIC Company Market Share ROE Industry Growth ROA Qualitative Quantitative 7. Qualitative Investment Criteria - Portfolio 5/8 6/9 6/13 6/12 Corporate Governance -0.30% 0.01% -0.5% 7.70% Insider Trading 83.38% 65.50% 67.44% 95% Institutional Ownership High Low Medium Medium Medium High Low High High Medium High High

Market Power

ProductDifferentiation

Low-cost Producer

CustomerRelationship

3.38% 12.00% 17.62% 2.29% Company Market Share 18.5% 12.7% 27.20% 19.42% Industry Growth INTU JEC EBAY OCR 8. Quantitative Investment Criteria - Portfolio 1.20 0.95 1.55 0.85 Beta 0.01 0 0.02 0.68 Debt/Equity 1.56 0.73 1.03 1.30 FCF/NI 96.86% 34.53% 84.6% 28.30% EPS Growth 159M 49M 62M 15M Economic Profit 7.81% 8.12% 8.74% 6.80% Cost of Capital 14.55% 13.10% 10.18% 7.37% ROIC 14.70% 16.35% 10.50% 13.12% ROE 10.27% 7.86% 9.10% 6.18% ROA INTU JEC EBAY OCR 9. Portfolio Monitoring - Sell Criteria

• Stock reaches its price objective

• Industry-sector weighting exceedspredetermined limits

• Risk/reward profile deteriorates

• Earnings figures lower than estimates

• Stop loss on all positions

10. SMF Holdings 12/26/03 Our sector allocation closely tracks the S&P500 with exceptions based on economic outlook HEALTHCARE29.28% CONSUMER DISCRETIONARY31.46% 5.89% ZMH 5.77% UNH 5.27% OCR 6.56% GILD 5.78% HSIC 5.00% YCC 4.42% WSM 5.85% HOTT 5.86% MAT 6.12% EBAY 4.21% ALV Equity Weight Ticker 11. SMF Holdings 12/26/03 Our sector allocation closely tracks the S&P500 with exceptions based on economic outlook CONSUMER STAPLES5.97% FINANCIALS5.38% INDUSTRIALS9.15% INFORMATION TECHNOLOGY18.77% 5.38% WFC 5.97% MO 4.17% FDC 3.36% COGN 5.56% MSFT 5.62% CD 3.53% JEC 5.68% INTU Equity Weight Ticker 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. SMF Holdings 02/17/04 * SOLD -9.27% $8,712 $47.86 200 JEC 0.26% $12,949 $30.75 420 INTC 8.63% $16,505 $66.06 230 HSIC 6.82% $16,159 $27.43 550 HOTT 8.85% $17,412 $53.32 300 GILD 22.55% $17,997 $56.49 260 EBAY 8.92% $16,051 $21.05 700 CD 16.53% $11,337 $32.43 300 ALV* 12.35% $11,312 $35.96 280 FDC -13.39% $9,042 $34.80 300 COGN* -4.48% $14,370 $51.87 290 INTU HPR Market Value (02/17/04) Purchase Price Quantity Ticker 14. SMF Holdings 02/17/04 4.64% $14,480 $55.23 250 WFC -3.9% $14,403 $33.84 350 WSM 2.35% $14,180 $27.71 500 YCC 11.27% $17,848 $69.74 230 ZMH 6.15% $16,518 $51.87 300 MO -0.97% $15,770 $19.19 830 MAT 10.88% $16,657 $54.63 275 UNH 1.98% $14,900 $26.56 550 MSFT 6.7% $9,729 $42.41 215 NEM 26.03% $16,328 $36.93 350 OCR HPR Market Value (02/17/04) Purchase Price Quantity Ticker 15. SMF Holdings Performance Period: Sep 4, 2003 Feb 17, 200421.87% 20.19% Treynor Index 2.93 2.67 Sharpe Ratio 7.46% 7.67% Annualized Standard Deviation 1.00 1.014 Beta 24.97% 23.47% Annualized Return 11.96% 11.28% Return S&P 500 SMF 16. Attribution Analysis

Analyze determinants of portfolio performance

• Sector allocation decisions

• Equity selection decisions

Sector Allocation and Equity Selection EffectDeterminants

• 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. Sector Allocation Effect LEGEND Wa i-- MBA Wts As ofDec 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 -0.6328% Sector Allocation Effect 0.0615% -2.1540% -2.85% Utilities -0.2587% 7.6488% -3.38% Telecomm Services 0.1565% -5.1317% -3.05% Materials -0.0089% -0.8548% 1.04% IT 0.0441% -2.4278% -1.82% Industrials 0.1780% 1.1151% 15.97% Health Care -0.3433% 2.2509% -15.25% Financials -0.0510% 0.8799% -5.79% Energy 0.0203% -0.4047% -5.03% Consumer Staples -0.4314% -2.1386% 20.17% Consumer Disc. {(Wai - Wpi)* (Rpi - Rp)} Rpi - Rp Wai - Wpi Sectors 18. Equity Selection Effect LEGEND Wa i-- MBA Wts As ofDec 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% -1.85% Selection Effect 0.00% -3.421% 0.00% Utilities 0.00% -13.224% 0.00% Telecomm Services 0.00% 6.726% 0.00% Materials -1.47% -7.833% 18.77% IT -0.27% -2.932% 9.15% Industrials 0.22% 0.757% 29.28% Health Care -0.47% -8.724% 5.38% Financials 0.00% -6.455% 0.00% Energy -0.14% -2.375% 5.97% Consumer Staples 0.27% 0.873% 31.46% Consumer Disc. Wai * Rai - Rpi R ai- R pi Wai Sectors 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. 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. Outlook

Continued economic strength

Growth at a more moderate pace

Continued stock market strength

Modest interest rate increase

22. Impact

Overweight IT and Healthcare

Be aware of interest rate sensitivity ofholdings

Select stocks leveraged to the currenteconomic environment

23. Activity Update As of Mar 05, 2004

Received additional $150,000 from theFoundation

Initiated positions in: WAG, NXTL,CTSH

Stock selection process underway

24. Thank you

University of Connecticut Foundation Inc.

Investment Advisory Board

Dr. Chinmoy Ghosh

25.

Questions?