The Charger Fund
The Charger Fund is a CMG-managed investment portfolio started with a $20,000 prize the CMG received from TVA in 2006. The prize money was awarded to the CMG for having the second best investment performance for 2005, and third best over the 3-year period, 2003-05.
The primary fund managed by the CMG, the TVA portfolio, is a domestic, large-cap equity portfolio. In order to broaden the scope of the CMG experience, it was decided to give the Charger Fund a different focus, specifically an international focus. Hence, the objective of the Charger Fund is to achieve long-term capital growth by investing exclusively in marketable securities representing equity investments in international companies. Adding an international component to the CMG compliments the current operation of the TVA portfolio nicely. And while the TVA fund does not require any global investment, the additional student analyst assigned to the Charger Fund can provide such expertise if the group decides to include international stocks in the TVA holdings.
In addition to adding an important and interesting dimension to the class, the Charger Fund is also expected to grow into a viable investment portfolio for future UAHuntsville students to manage. Unlike the TVA portfolio, the current size of the Charger Fund is not large enough to occupy an entire class. However, we will begin looking for opportunities to increase the size of the fund. As we do so, the scope and scale of the student participation will change.
The Charger Fund is administered through a UAHuntsville Foundation account at the local office of Smith Barney. A special note of thanks to Mr. Jim Parker, Vice-President at Smith Barney, for his help in getting the Fund set up and the continued administration of the portfolio. Our association with Smith Barney goes back to the start of the TVA Investment Challenge Program. It was Mr. W.F. Sanders, Vice-President at Smith Barney, who represented UAH when Mr. Johnny Hayes, Director of TVA, came to Huntsville to kick off the program. Mr. Sanders has been a supporter of the program ever since and is a member of the CMG Oversight Board.
Goals and Objective
The Charger Fund was established with the following goals in mind:
- To provide UAHuntsville students with the real world learning experience associated with directing the investment of an actual investment portfolio.
- To expand the educational scope provided by the TVA Investment Challenge Program by allocating the investment funds of the Charger Fund to securities representing investments in international companies.
- To establish, build, and sustain an investment fund that will coexist with the investment fund established by the TVA Investment Challenge Program.
The investment objective of the Charger Fund is to achieve long-term capital growth by investing exclusively in marketable securities representing equity investments in international companies.
The CMG must adhere to an established set of guidelines when implementing and executing the portfolio strategy. Since the portfolio is to consist of international equity investments, the portfolio will consist mainly of American Depository Receipts (ADRs) and/or Exchange Traded funds (ETFs). ETFs allow convenient allocation to specific geographic countries and/or regions. ADRs allow for investments in specific international companies.
The relative benchmark is defined as the Global ex US Index managed by Dow Jones Wilshire (DJW). The DJW Global ex US Index measures international equity performance of ten industries and fifty-eight developed and emerging countries excluding the United States. The index weightings vary by float adjusted market capitalization.
The portfolio should meet the following performance objectives:
- The portfolio is expected to outperform the DJW Global ex US Index in each calendar year.
- Over a rolling three-year horizon, the portfolio is expected to generate a total return of at least 100 basis points over the DJW Global ex US Index.
Charger Fund Data
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