The 2016 Washburn University Applied Portfolio Management Class: From left to right: Zak Haller, Andrew Brown, Adam Smith, Professor Weigand, Dario Munoz Poletti, Sara Specht, Kennedy White, Spencer Elkinton, Aleck Boyd, Bernadette Smith, Jake Gregg, Alexa Bowen, Blake Porter and Sean Miller.
The Student Investment Fund has slightly outpaced the S&P 500 over the past 5 years:
The Spring 2015 and 2016 classes correctly anticipated the economic slowdown (negative GDP growth in Q1 2015 and a paltry 0.5% GDP growth in Q1 2016) and repositioned the portfolio more defensively, with active sector overweights in Healthcare, Consumer Staples and Telecom. The market weight in Energy stocks is also defensive in this case, as the SIF Energy holdings are concentrated in low-beta, high dividend yield master limited partnership stocks such as Kinder Morgan and ONEOK. The underweights in Industrials, Materials, Consumer Discretionary and Financials further reflect the defensive posture of the portfolio.
The following table shows the returns of the SIF by stock sector. The SIF active stock selections had higher returns in all sectors except for Telecom and Healthcare stocks. The SIF’s weighted return of 27.3% is 7.9% higher than it would have been if the portfolio was invested in all SPDR ETFs.
The following table shows the dividend yield of the SIF by stock sector. The SIF active stock selections had higher yields in all sectors except for materials stocks. The SIF’s weighted dividend yield of 3.49% is 1.58% higher than it would have been if the portfolio was invested in all SPDR ETFs.
The following table shows the SIF beta by stock sector. The SIF active stock selections had lower betas than the corresponding ETFs in all sectors except Information Technology and Financials. Overall the SIF has a beta of 0.77. Had the portfolio instead held all ETFs with similar sector weightings, the SIF’s beta would have been 0.932.
The table below shows the SIF’s current positions and the weight of each position in the SIF portfolio. The fund’s market value was $138,266 as of April 28, 2016.
The table below shows the SIF’s weighted average P/E ratio, dividend yield, free cash flow yield, return on assets, return on invested capital and operating margin. Most fundamental portfolio characteristics are within acceptable limits. The average portfolio P/E ratio of 27.6 is high, and thus a concern, but indicative of a late-stage bull market where valuations are high across the board. The S&P 500 P/E based on twelve trailing months of GAAP earnings is 24.5 as of April, 2016.
-- Datasource: Standard & Poor’s Capital IQ