Photo below was taken on Mar. 27 at Bill Greiner’s annual economic forecast breakfast. From left to right (with year of Washburn degree): Bill Greiner (1980), Professor Weigand, Scott Wells (2006, 2014), Lu Zhiqiang (2014), Dr. William Powell (1950), Jo Halley, Max Halley (1966), Xiaoyun Yu (2014), Bobby Florence (2014), Michael Stephens (2014), and Samir Hakal (2014).
The Student Investment Fund matched the returns of the S&P 500 over the 2014 calendar year.
The SIF has sector overweights vs. the S&P 500 in Information Technology, Healthcare, Telecom, Energy and Industrial stocks, and maintains sector underweights in Materials, Consumer Discretionary and Financial stocks.
The following table shows the SIF portfolio’s returns by sector, compared with the returns of the corresponding sector ETFs. The SIF active stock selections earned higher returns in the information technology, industrials, energy, financials and utilities sectors. The SIF lagged in consumer staples, materials, telecom, consumer discretionary and healthcare stocks. The SIF’s 1-year return of +17.2% was 1.5% lower than it would have been if it had invested with similar sector weightings in all SPDR ETFs, which shows that overall, our active management strategy was not as successful during the past 12 months as it has been in past years.
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 industrial, utilities and materials stocks. The SIF’s weighted dividend yield of 2.89% was 1.14% 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, except in the consumer discretionary, utilities, healthcare and financials sectors. Overall the SIF had a beta of 0.904, higher than last year’s average of 0.835. Had the portfolio instead held all ETFs with similar sector weightings, the SIF’s beta would have been 0.965.
The following table shows the Treynor ratios of the SIF by stock sector (Treynor ratios measure excess returns per unit of beta risk). The SIF’s Treynor ratio of 1.17 was much lower than last year’s 1.99, and lower than the Treynor ratio of a similarly-weighted portfolio of sector ETFs would have delivered (1.74).
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 $137,791 as of January 16, 2014.
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 17.5 is much lower than last year’s average of 20.5. The average free cash flow yield, return on assets and return on invested capital also fell in 2014, while the average operating margin rose slightly.
-- Datasource: Standard & Poor’s Capital IQ