Official Rules - Collins College of Business

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Investment Portfolio Challenge

Official Rules

Contents

1.0 INTRODUCTION AND GENERAL PROVISIONS
1.1  Conflicts of Interest and Insider Information
1.2  Plagiarism
1.3  Participant Information
2.0 TEAMS
2.1  Team Composition and Member Requirements
2.2  Research
2.3  Presentations
3.0 COMPETITION PARTICIPANTS AND ROLES
3.1  Faculty Advisor
3.2  Business Contacts
3.3  Industry Representatives
4.0 COMPETITION LOGISTICS AND AWARDS
4.1 Schedule
4.2 Awards
Appendix A – Investment Portfolio Challenge Guidelines
Appendix B – Presentation Scoring Sheet

1.0   Introduction And General Provisions

The University of Tulsa Investment Portfolio Challenge charges university-sponsored teams with recommending an optimal weighting of Global Industry Classification Standard (“GICS” ®) sectors for a hypothetical $6 million investment portfolio with selected individual equity selections under a variety of economic scenarios.  The University of Tulsa’s Collins College of Business hosts and administers The University of Tulsa Investment Portfolio Challenge at the local level. Any questions or uncertainties pertaining to the Official Rules of The University of Tulsa Investment Portfolio Challenge should be directed to tally-ferguson@utulsa.edu.

1.1  Conflicts of Interest and Insider Information

Students, Administrators, Faculty Advisors, Business Contacts and Industry Representatives involved with The University of Tulsa Investment Portfolio Challenge, have an obligation to avoid actual or potential conflicts of interest. A conflict of interest is any matter that could reasonably be expected to impair an individual’s independence and objectivity or interfere with an individual’s duties.  Conflicts may be actual or perceived.

As students research their project they may come in contact with material[1], non public[2] information.  Acting on such information could lead to insider trading violations which violates SEC Rules 10b-5. Students, Faculty Advisors, and Business Contacts are advised to use and disseminate such information judiciously.

1.2  Plagiarism

Plagiarism is defined as copying or using in substantially the same form materials prepared by others without acknowledging the source of the material or identifying the author and publisher of such material. Teams can read existing research on the GICs sectors and individual companies, but all analysis should be their own; they may not copy analysis (i.e., plagiarize) from another source.

Teams also must not:

  1. use excerpts from articles or reports prepared by others either verbatim or with only slight changes in wording without acknowledgment,
  2. cite specific quotations as attributable to “leading analysts” and “investment experts” without naming the specific references,
  3. present statistical estimates of forecasts prepared by others and identifying the sources but without including the qualifying statements or caveats that may have been used,
  4. use charts and graphs without stating their sources, or
  5. copy proprietary computerized spreadsheets or algorithms without seeking the cooperation or authorization of their creators.

1.3  Participant Information

By participating in The University of Tulsa Investment Portfolio Challenge, each participant acknowledges that The University of Tulsa has access to and shares personal information of participants in The University of Tulsa Investment Portfolio Challenge.  Each participant agrees that The University of Tulsa shall have the right to use such individual’s name, voice, photograph, likeness, their appearance in any medium or forum anywhere in the world (including online) without further compensation, unless prohibited by law.

2.0   TEAMS

2.1 Team Composition and Member Requirements

Teams must be sponsored by a university invited by The University of Tulsa Collins College of Business. Up to two teams may represent an institution and if you would like additional consideration for more teams please contact Charity Barton.

Each team:

  1. Must consist of undergraduate, graduate, or a combination of undergraduate and graduate.
  2. Must consist of no fewer than three and no more than six.

Each team member must:

  1. Complete the official registration form;
  2. Be a currently enrolled college or university student in an undergraduate or graduate program at the sponsoring university at the time of the local level kickoff meeting, and
  3. Be registered for at least a part-time course load, as defined by his or her university, at the time of the local level kickoff.

2.2    Research

Only team members may conduct research on the subject company for the purposes of The University of Tulsa Investment Portfolio Challenge. Teams may use only publicly available information in conducting their research[3].

  1. Teams may use a Business Contact, and/or Faculty Advisor as resources but may not enlist the help of any Industry Representatives involved with this competition. They may consult industry experts and representatives at publicly held companies to gain insight into publicly available information to inform the teams’ recommendations.
  2. The presentations should be prepared from the perspective of an independent research
  3. Teams can read existing research on industries and their recommended companies, but all analysis should be their own. Specifically, do not copy analysis (i.e., plagiarize) from another source.  Teams need to properly cite sourced information into their presentations.

2.3    Presentations

Presentations will be judged according to Appendix B, “Presentation Scoring Sheet.”  Each team will present their recommendations to a panel of Industry Representatives in two ways:

Report (Digital Material); 

  1. Six calendar days prior to the event, each team must submit a pre-recorded digital copy of their analysis. This may be done in the form a paper, PowerPoint deck, or other clear digital form.
  2. While there is no prescribed length for the report it must support the teams’ conclusions. Teams have only 30 minutes to present their material.  This is not sufficient time to detail the work invested by teams to determine an optimal allocation of sectors.  However, the 30-minute cap will be strictly adhered to by judges.
  3. There is also no prescribed organization for the written material. However, judges will likely prefer written material that follows the Appendix B judging criteria order.

Presentation

  1. Teams may utilize their Business Contact, and/or Faculty Advisor as a resource for guidance, direction, suggestions, and feedback. Teams may not enlist the help of any Industry Representatives.
  2. The teams must provide their pre-recorded digital presentations, along with any supporting materials to Charity Barton by 5:00 p.m. November 10, 2022. Examples of supporting materials  include financial summaries, equations, model results or other detail supporting recommendations.
  3. Presentations must reference source information.
  4. Only student team members may participate in the digital presentation.
  5. The digital presentation is limited to 30 minutes; however, on November 16, 2022, teams must participate in an on-site Q&A session during which Industry Representatives and the general audience including Faculty Advisors will ask questions concerning the presentation. Competing teams will not be permitted to pose questions to a team during the Q&A portion of a presentation.  Each team gets a 15-minute Q&A session.  The Q&A sessions will all occur on competition day, November 16, 2022 at The University of Tulsa.  Teams unable to attend the Q&A session in person may arrange to attend virtually by contacting Charity Barton at cab234@utulsa.edu or Tally Ferguson at tally-ferguson@utulsa.edu.
  6. Each Q&A session will be timed and last no more than 15 minutes. The timekeeper will provide a five-minute warning and an announcement when time has expired during the presentation. The timekeeper will announce when time has expired during the question and answer period. When the timekeeper announces that time has expired, teams must immediately

3.0   COMPETITION PARTICIPANTS AND ROLES

3.1    Faculty Advisor

  1. Each team may avail themselves of one faculty advisor. The faculty advisor must be currently employed as staff or a faculty member by the team’s sponsoring
  2. The faculty advisor’s primary responsibility is to provide guidance and direction to the team during the
  3. Faculty Advisors are not permitted to conduct any analysis for the team’s presentation or supporting handouts. Nor may they contribute research or content to either the handouts or the presentation material beyond providing guidance, direction, suggestions, and
  4. Faculty Advisors may not participate in the Faculty Advisors may ask questions during the competition presentations, but they may not ask questions of their own teams.

3.2    Business Contacts

Each team may avail themselves of any number of Business Contacts at their own discretion.  These contacts can share expert knowledge about industries or companies to supplement the teams’ research.

  1. The Business Contacts may not conduct any analysis for the team’s written report or presentation
  2. The Business Contacts may not contribute any research or content to either handouts or the presentation beyond providing guidance, direction, suggestions, and
  3. Teams must cite any intelligence drawn from Business Contacts used in presentations or handouts

3.3    Industry Representatives

Industry Representatives independently judge each presentation using the presentation scoring sheet (see Appendix B).

  1. Industry Representatives represent industries with significant presence located within a 6 hour drive radius of Tulsa.
  2. There will be a minimum of three judges per team presentation.
  3. The judges will be invited by Collins College of Business staff.

4.0   COMPETITION LOGISTICS AND AWARDS

4.1    Schedule

Depending upon the number of teams, presentations will take place in simultaneous 20-minute sessions (15 for team presentations and 5 minutes for the judges to score each presentation).  Sessions will be spread across cohorts according to the following schedule.  Competition sessions will be sandwiched by an introduction/orientation and virtual awards ceremony.  The number of competing teams in each cohort will be determined based upon the number of teams that register.

9:00 - 9:10 a.m.Introduction and Orientation
9:10 - 9:25 a.m.First Presentation
9:25 -9:30 a.m.Judges compile notes for scoring sheets
9:30 -9:45 a.m.Second Presentation
9:44 -9:50 a.m.Judges compile notes for scoring sheets
9:50 - 10:05 a.m.Third Presentation
10:05 - 10:10 a.m.Judges compile notes for scoring sheets
10:10 - 10:25 a.m.Fourth Presentation
10:25 - 10:30 a.m.Judges compile notes for scoring sheets
10:30 - 10:45 a.m.Fifth Presentation
10:45 - 10:50 a.m.Judges compile notes for scoring sheets
10:50 - 11:00 a.m.Judges submit all scoring sheets
11:30 a.m. - 1:00 p.m. Awards and Recognition Lunch
(Judges are invited to the Friends of Finance lunch at this time)

4.2    Awards

Cash prizes will be awarded to the first and second place teams. The winning team award is $3,000, and the second place team award is $1,500.

Appendix A – Investment Portfolio Challenge Guidelines

Situation: You have been hired as financial advisors by Financial Opportunities Governance Group, (“FOGG”).  The endowment was established by a consortium of economists, psychics, and hedge funds.  FOGG seeks to: (i) provide scholarships for students interested in studying forecasting methods and at local universities; and (ii) grow an investment fund as rapidly as possible to fund annual research and development expenses.   As such it has a long-term investment horizon and seeks an aggressive growth investment style.  FOGG has over $1 billion in funds to invest, but they have targeted $6mm to be managed by you.  All of FOGG’s endowment proceeds are governed by their investment policy, summary points of which follow:

  1. At least 50% of the portfolio must be invested in iShares S&P sector index funds (see table 2 below)
  2. No more than 10% of the portfolio may be in “speculative” asset classes such as commodities, or crypto currencies.
  3. Up to 50% of the portfolio may be invested in individual “blue chip” stocks with at least $2 billion in market capitalization, traded on a U.S. stock exchange.
  4. No redemptions are required at present, but in five years, five percent of the portfolio must be redeemed annually for cash to support scholarships and R&D expenses.

FOGG’s stated return objective is to grow rapidly but responsibly so that, in five years, they have a considerably larger base from which to distribute scholarships and R&D expense funds.  Their stated risk tolerance is high.  That is, they are comfortable suffering losses in a down market provide they outperform a bull market.

Challenge: FOGG hired you to advise them on the following five issues:

    1. Economic Outlook: FOGG emphasizes economic analysis and projections in its planning and wants your projections for the following macro data. Analysts are permitted to use different macroeconomic variables if they choose and defend their deviation.  Defend your prediction and cite your sources:
Table 1: Economic Statics
Most RecentYear End '22Year End '23
Personal Income
10 Year Treasury Yield
Crude Oil price
Unemployment rate US (U-6)
US GDP
International GDP, minimally including
the EU, China, Japan and the UK
    1. Sector portion of funds: how should FOGG allocate the sector portion of their funds?  State what percent of the sector portion should be in each sector ETF and justify why.  For reference, historical prices and returns for each of the eleven sector funds are provided.  Following are the funds with their Ticker symbols.  You are advised to incorporate macro economic variables in your projections.  Quantitative methods for optimizing portfolios are encouraged if well understood by analysts.
Table 2: Sector Funds and weightings
TickerSector NameS&P 500 composition as of 6/30/22
XLKInformation Technology26.80%
XLVHealth Care15.10%
XLFFinancials10.80%
XLYConsumer Discretionary10.50%
XLCCommunication Services8.90%
XLIIndustrials7.80%
XLPConsumer Staples7.00%
XLEEnergy4.40%
XLUUtilities3.10%
XLREReal Estate2.90%
XLBMaterials2.60%
    1. Speculative Asset portion: Should FOGG invest any of its funds into “speculative” assets?  For reference, historical prices and returns for bitcoin, gold and crude oil are provided.
    2. Individual stock selection: Is investing in individual stocks consistent with FOGG’s return objectives and risk tolerance? If so, what 3-5 stocks should the fund invest in?
    3. Economic Scenario Adjustment; FOGG’s economists and psychics laid out the following projections for selected economic variables.  How does your response to questions 2 and 4 change under these scenarios?
Table 3: Psychics and Economists
PsychicsEconomists
12/31/202212/31/202312/31/202212/31/2023
Personal Income (US$ Billions)23,38325,50819,13117,006
10 Year Treasury Yield3.003.004.006.00
Crude Oil price6060110150
Unemployment rate US (U-6)3.63.04.08.0
US GDP (US$ Billions)26,82629,26421,94819,510
EU GDP (US$ Billions)18,80420,51315,38513,675
China GDP (US$ Billions)15,62017,04012,78011,360
Japan GDP (US$ Billions)5,5666,0724,5544,048
UK GDP (US$ Billions)2,9373,2042,4032,136

Prepare a digital presentation of no more than 30 minutes responding to these five issues.  Supporting material that cannot be covered in the 30 minute presentation may be included with your submission.

 

Appendix B – Presentation Scoring Sheet

University of Tulsa Investment Portfolio Challenge Presentation Scoring Sheet
Team: __________________________ Industry Representative: _____________________________

CriteriaMaximum PointsPointsNotes
Economic Outlook:
a. Prediction made
b. Defense of prediction		10
Sector Portion:
a. Allocation of sector portion
b. Quantitative support of allocation
c. Qualitative support of allocation		20
Speculative Asset Portion:
a. Recommendation (whether to “invest” at all and if so in what)
b. Quantitative support of recommendation
c. Qualitative support of recommendation		10
Individual Stock Portion:
a. Defend whether or not appropriate
b. Identify individual stocks
c. Quantitative and qualitative support of recommended stocks		15
Optimal Portfolio:
a.Present allocation across sector, individual stocks and speculative
b. Quantitative support for allocation
c. Qualitative support for allocation		15
Presentation
Materials:
Quality of digital presentation		15
Question & Answer :
Did team answer the questions effectively and with confidence?		10
Team Involvement:
Team involvement in both the presentation/questions and answers		5
Total100

 

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