Portfolio Home Page
Purpose and Background
Statement of Objectives
Investment Policy
Portfolio Review and Control
The MBA Investment Club portfolio was originally funded by Herman Crown and William Coleman for the primary purpose of serving as an educational tool for MBA students. MBA students have managed the portfolio since 1988 (check).
The portfolio is part of the Notre Dame endowment.
Administratively, the MBA Investment Club portfolio is segregated into
two funds:
· Fund III Herman Crown
· Fund IV William Coleman
Future Contributions: None scheduled
Future Withdrawals: No
Tax Status: Tax-Free (university endowment)
The Primary Objective of the MBA Investment Club Portfolio is to enhance the education of MBA students. Club members will argue for the purchase or sale of common stocks, supported by compelling reasons for such action. The Club will then vote for or against members’ recommendations.
A secondary goal of the MBA Investment Club is to provide 7% long-term real growth of the principal.
A. Return Objectives
· 7% Real Growth of Principal
· Total Return = 7% + Inflation
· Performance will also be periodically compared
against:
· S&P 500
· Russell 2000
B. Risk Tolerance
· The Investment Club will accept the systematic
risk inherent in the equity market
· Portfolio diversification will be employed to
avoid overexposure to firm or industry-specific risks
C. Investment Constraints
1) Time Horizon- The portfolio is effectively an endowment
fund, thus the horizon is long-term
2) Liquidity- No cash is needed for disbursements.
Cash will only be required for purchases. The portfolio will be very
liquid as it invests in common stocks traded on the major exchanges
3) Taxes- This is a tax-free portfolio (university endowment).
Tax-exempt securities will be avoided
D. Investment Guidelines
1) Universe of Securities The fund may invest in:
· US Common Stocks
· ADRs of foreign stocks
· SPDRs - S&P 500 Depository Receipts- used
to maintain exposure to stock market when extra cash is on hand
2) Prohibited Securities
· Any derivative instrument
· Stocks of companies producing:
· Abortifacients
· Birth control products
· Tobacco products
· The stock of any company whose values are inimical
with those of the University
3) Limits/Caps on Holdings
· When the weighting of any single security exceeds
12% of the portfolio, it will immediately be sold down until it accounts
for less than 10%
· Technology companies shall not constitute more
than 50% of the portfolio
· Small Cap (market cap < $500 MIL) stocks
shall not represent more than 25% of the portfolio
IV. Portfolio Review and Control
The Notre Dame Endowment Fund office has ultimate authority over any proposed transaction. Order confirmations must be submitted for review immediately after the order is placed with the broker.
The Investment Club will conduct the following monitoring
activities:
1) Weekly - General market conditions and portfolio composition
will be reviewed at meetings. Also, members will present new investment
ideas
2) Quarterly – Portfolio performance will be presented
against that of the S&P 500