Sun Charities has an enrichment of $100 million. Parker, the boss speculation officer of Sun Charities, has a chance to put resources into Extraordinary Value Partners (EVP), a support investments. He is considering putting $10 million in EVP. In what manner would it be a good idea for him to assess the speculation opportunity?
· EVP Returns
· Standard Deviatons
· SR (Monthly)
· Correlation with the Microcap Index
· Correlation with S&P 500 Index
· Correlation with MSCI EAFE Index
· Long-Short Fund
· Long Only Fund
· Portfolio 1
· Portfolio 2
· Long-Short Fund return in excess of the Index
· Long Only Fund return in excess of the Index
1. What were the properties of EVP’s Historical Returns, and how did the Russell microcap index compare?
2. Consider the returns of the EVP funds in excess of the microcap benchmark. What were the properties of that excess return?
3. Was EVP truly a microcap stock picking fund? Use Return Based style analysis to answer this question.
4. Within the microcap universe, did EVP focus on value or growth stocks?
5. Was EVP just a leveraged version of the microcap benchmark, or some other indexes available to you?
6. What was the style of the EVP fund returns? Did this analysis give any insight into as to how EVP added value relative to microcap benchmark?
7. Suppose the historical returns represented what one could expect going forward. How would a 90% in M plus 10 percent in EVP long only fund compare with 90% in M plus 10% in a Russell Microcap Index Fund?