Global Equity Fund 2018 Annual Report
- 1. THE GLOBAL EQUITY FUND END OF YEAR PRESENTATION MAY 3, 2018
- 3. LETTERTOTHESHAREHOLDERS Letter to the Global Equity Fund Partners The purpose of the annual report is to provide a recap of the activity for the trailing-twelve months (May 2017 to April 2018) and the current health of our fund. The Global Equity Fund had a strong 2017, but 2018 has been rough with the return of volatility to the markets. We have had a return of 4.23% YoY. This year we pitched 40 companies and ETFs, of which we added 18 into our portfolio. After the summer, we had almost $200,000 in cash. We decided to invest in the ETF that tracks our benchmark, ACWX, so that we could more closely track our benchmark and not have too much idle cash. We would sell a portion of ACWX as we found companies to invest in. The entire GEF team learned a lot from this experience, and we are very grateful for this opportunity. We are confident that the fund will be in good hands next year with the incoming class -Global Equity Fund 3
- 5. Overview 4
- 7. OVERVIEW Investment Strategy 7 • Economic, Industry, Company (EIC) Analysis • Select undervalued stocks using equity analysis • Long term approach (we are not day traders) • This year established 10% cap on any holding • Manage concentration of sectors/regions to diversify holdings
- 8. OVERVIEW Investment Tools Models: Valuation models from Professor Ryan Guttridge and Aswath Damodaran • DCF • Dividend/Earnings Growth Models • Comparable Analysis Software: Bloomberg; Capital IQ; IBIS World; ThomsonOne; Morningstar, Crystal Ball, etc. Strategies Discussed in Class: • Introduced by Dr. Gurdip Bakshi: • Carry Trade, Hedge Fund Performance, Tax Reform Implications, Dollar Safety Premium, Algorithmic Trading, Central Banks Influence on Capital Markets, Cryptocurrency, and Technical Analysis Terminology 8
- 10. PERFORMANCESUMMARY Annual Performance 10 GEF starting value $560,039.71 ACWX start $44.78 GEF ending value $582,637.37 ACWX end $49.80 GEF return 4.04% ACWX return 11.21%
- 11. PERFORMANCESUMMARY Fund Performance, Since Inception & Current Fiscal Year • GEF trailed ACWX by 7.18% this fiscal year. Our performance is now outpacing the benchmark by 8.39% since inception. 11 Performance Highlights Fiscal Year, 05/01/2017 – 05/01/2018Since Inception, 12/31/2009 – 05/01/2018
- 12. PERFORMANCESUMMARY Fund Performance, Since Inception & Current Fiscal Year 12 • Fund Beginning Value $ 560,039.71 • Dividend Paid Out $ 22,762.37 • Fund Ending Value $ 559,875.00 Since inception: Outpacing EEM by 24%
- 13. Profile 8
- 20. PROFILE Trading Activity • Number of total pitches: 40 • Purchase Rate: 45% 20 Equities Purchased
- 23. PROFILE Top 10 Winners 23 Name % Gain/Loss Lululemon Athletica Inc. 45.36% Alibaba Group Holding Ltd 38.06% Zto Express (Cayman) Inc (Adr) 32.60% Arista Networks Inc 25.51% Vanguard Ftse All Wd Ex Us Small Cap Etf 30.45% MTUM Ishares Trust 26.19% Aercap Holdings N.V. 24.53% Wns (Holdings) Limited (Adr) 23.87% Brookfield Asset Management Inc 20.99% Micron Technology, Inc. 19.00% Name Gain/Loss Alibaba Group Holding Ltd 16,084.25 Arista Networks Inc 14,353.12 Ishares Msci Acwi Ex Us Index Fund 12,588.49 Lululemon Athletica Inc. 9,063.14 Zto Express (Cayman) Inc (Adr) 6,518.14 Micron Technology, Inc. 5,306.58 Aercap Holdings N.V. 4,896.27 Wns (Holdings) Limited (Adr) 4,785.38 Vanguard Ftse All Wd Ex Us Small Cap Etf 4,573.45 Brookfield Asset Management Inc 4,183.61
- 24. PROFILE Worst Performers 24 Name Gain/Loss % Gain/Loss Teva Pharmaceutical Industries Ltd (Adr) (10,901.04) -54.42% Universal Display Corporation (19,290.95) -51.78% American Outdoor Brands Corp (10,570.93) -50.52% Yy Inc (Adr) (8,350.93) -30.16% China Distance Education Hldgs Ltd (Adr) (5,908.22) -29.53% Controladora Vuela Co Avcn Sa Cv (Adr) (7,097.65) -28.37% Acadia Healthcare Company Inc (2,573.86) -25.67% Mazda Motor Corp (3,781.87) -18.86% Federal National Mortgage Association (1,124.95) -18.35% Tencent Holdings Ltd (4,589.95) -15.71%
- 26. CLASSHIGHLIGHTS Arista Networks (ANET) 26 Best performing stock which generated 26% return in 81 days for an annualized ROI of 116% • Pitched by Mehdi Zare on September 2017 • Bought 300 for $187.50 | • Sold 200 at $242.26 | Sold 100 at $221.68 • Re-bought at $250.22 | Current price $265.27 (5/2/18) • Investment Thesis: • Founded by Two of the Silicon Valley veterans, who invested in Cisco, Sun, Google, … • Direct Competitor of Cisco, on a Niche Market, with a better product, and strong foothold in the market. • Sold because of High expectation of the market, unsustainable growth at this level
- 27. CLASSHIGHLIGHTS Universal Display Corporation (OLED) 27 Worst performing stock which generated -51% return in 161 days for an annualized ROI of -114% • Pitched by Zhuoxi (Austin) Wu on Nov 18th 2018 • Bought 200 for $186.29 | Current Price $89.75 • Investment Thesis: • Monopoly on almost all OLED Patents in the world • Supplier to Samsung, LG, Sharp, … • Tanked by over 60% from its all time high, due to speculation that Apple with use other technologies such as MicroLED • There’s no other viable alternative at the moment
- 28. CLASSHIGHLIGHTS LinkedIn/Seeking Alpha Official LinkedIn Page for GEF • GEF can now be referenced as a job for students • Professional way to publish their work • Average 30 visits per month mostly by seniors from financial services
- 29. CLASSHIGHLIGHTS Lessons Learned • Don’t buy after a big run up in price (OLED) • Sell sooner when its not going our way (AOBC) • Buying the benchmark worked out, but it might not always be that way (ACWX) • We can’t predict when the bottom will fall out of the market (Feb 2018), but holding was better than selling (focus on fundamentals) • Sometimes the majority is wrong (XPO) • You never know someone’s perspective until you ask them 29
- 30. CLASSHIGHLIGHTS Recommendations • GEF might do better as a night class in DC • More participation from PT MBA students AND MFIN students • Make the path to GEF attainable for students on compressed graduation timeline • Tough for 2nd year students to apply and participate 30
- 32. INCOMINGCLASS Part Time MBA • Lina Pena (Portfolio Manager) • Alexander Blass • Darren Pagan • Emilee van Norden • Eric Granados • James Ford • Jeremy Rechtien • Louis Khouri • Zhuohong Xie Full Time MFin/MQF • Marwin Glenn (Portfolio Manager) • Anna Liu • Anupa Shah • Benqing (Neal) Yuan • Daien Wang • Jingyi (Emma) Li • Lingge Xu • Mengyi (Sophia) Wang • Noor Akhtar • Xin (Kathy) Zhang • Xu Jiaqi • Zhelin Guo • Ziqiao Wang 32 Incoming Class of 2018-2019
- 33. Conclusion 33
- 35. CONCLUSION Special Thanks • Dean Triantis • Department of Finance • Office of Career Services • Dr. Gurdip Bakshi • Dr. Sarah Kroncke • Dr. Joe Perfetti • Dr. Bharat Jain • Nicola Daniel • Kenneth Fuller 35 • Ryan Guttridge • Pete Kyle • Whitney Whitfield • Foundation Board • GEF Alumni • Jose Vides • Nero Nguyen • Endri Mustafa • Andrew Foote • GEF Class of 2017-2018