Executive Summary - 10k 2015
As 2015 came to an end, the Bellarmine University Investment Group (BUIG)
recorded its first full calendar year of performance. I am pleased to announce that
the Sustainable Equity Balanced Fund (SEBF) had an absolute return of 1.45%
over the period. Compared to our benchmark, a 70/30 weighted blend of the S&P
500 and Barclay’s Aggregate Bond Index, we contributed 1.81% of
outperformance. In addition, we compare our absolute return to 958
professionally managed mutual funds in the balanced asset allocation category.
According to Morningstar Direct, The SEBF’s performance placed in the top 5th
percentile in this balanced fund category for 2015.
By staying true to our disciplined investment philosophy, we were able to
successfully manage the SEBF in light of volatile market conditions stemming
from a strong U.S. dollar, low commodity prices, global growth worries, and
uncertainty surrounding Fed policy. We believe the top-down approach
incorporated into our investment process, coupled with consistent fundamental
analysis and portfolio due diligence, has strategically positioned our holdings to
outperform our benchmark and the broader market on a regular basis. Prudent
sector bets and making tactical alterations to our asset allocation added further
value. Although our market sentiment shifts towards a more pessimistic outlook
for 2016, we are confident that our investment approach will position us for
continued outperformance. The SEBF looks to incorporate exposure to the
alternative asset class in hopes of unlocking further value as we anticipate flat to
slightly negative returns across broader indices.
With strong performance headed into the new year, the future of the SEBF looks
promising. I would like to extend a special thank you to everyone dedicated to
this invaluable experience. Our success could not have been possible without the
untethered support from our advisor Carl Hafele, the Executive Officers, general
members, and all colleagues.
Rich Dvorak - President
New Year – New BUIG
The BUIG Executive have been in the process of restructuring our organization in
order to provide members with additional opportunities to be involved with the
SEBF. Looking to be implemented at the beginning of 2016, we hope to reduce
the barriers between Executive Officers and general members so that our group
can better capitalize on our collective efforts when managing the portfolio. We
are optimistic that this will only further contribute to the outstanding hands-on
experience that members gain from the fundamental research, technical analysis,
and portfolio management our organization offers.
Changes that will be made include consolidating the previous seven member
investment panel into three remaining positions: President, Vice President of
Investment Relations, and Vice President of Investment Strategy. Concentrating
these roles will lead to a more efficient and effective investment decision making
as these three Executive Officers will have final voting rights on any proposed
transaction, which requires a unanimous decision. We are also introducing new
positions of Senior and Junior Analysts into our structural hierarchy. There will
be six Senior Analysts who will specifically cover one or two sectors of the market.
Senior Analyst will maintain a watch list for his or her sector(s) and remain up to
date on any changes within the companies that we currently hold. Also, Senior
Analysts will prepare and present any transaction proposals to the Executive
Officers. As for the Junior Analysts, they will be assigned specific stocks to cover
that we currently hold in our portfolio. They will prepare a weekly report on their
stocks to present to the Senior Analyst who head the respective sector in addition
to reporting any new investment ideas or proposals to the Senior Analysts.
We are also excited to announce our plan to now meet weekly instead of biweekly.
During our meetings we will conduct collaborative research among all
members for a more hands-on experience. We believe that collaborative research
will bring our members closer together, encourage the sharing of investment
ideas, and facilitate more elaborate security analysis. This also provides everyone
the chance to stay up to date on and involved with the entire portfolio. We will
continue to invite guest speakers to visit campus and speak to our organization.
We are confident in the changes that we have made and believe everyone
involved will have a more valuable experience under this new structure.