Investment Objectives

1. Returns: The Fund’s investment objectives are to achieve a total return that is a) greater than the Fund’s relative benchmark which is the total return of the S&P MidCap 400 Index, and b) greater than the Fund’s absolute benchmark, the United States Treasury zero-coupon security 08/15/16 as quoted using the Bloomberg Generic price.

2. Diversification: The Fund attempts to mitigate risk in its investment returns by maintaining a diversified portfolio.

3. Investment Considerations: The Fund has the following investment considerations:

3.1. Liquidity: The Fund has little need for liquidity since there are no anticipated future cash outflows. The Fund remains fully invested in securities that meet its investment criteria and may hold investments in equity securities and exchange-traded funds (ETFs) that exhibit sufficient liquidity and are traded on major U.S. or foreign exchanges. To facilitate security transactions, a percentage of the Fund will be invested in S&P MidCap 400 Index SPDRs.

3.2. Time Horizon: The Fund’s time horizon is in perpetuity.

3.3. Tax Concerns: The Fund operates under the tax and regulatory umbrella of UST as a non-profit.

3.4. Socially Responsible Investing: As part of a Catholic institution, the Fund will refrain from investing in firms whose operations involve the manufacturing and/or marketing of contraceptives or tobacco products. UST’s Social Responsible Investment (SRI) screen lists these firms. A current copy of the SRI screens should be obtained from the UST Treasury Office by the Communications Group (CG) and distributed to the Student Mangers at the beginning of their term. The Class Log Group (CLG) monitors Fund investments to ensure the holdings confirm with UST socially responsible investment restrictions.

4. Portfolio Composition: The Fund is not required to match the S&P MidCap 400 Index weightings for every sector. The weight of each sector in the Fund must satisfy the diversification policy set by the Student Managers should be within an absolute range of 15% of the weight of that sector in the S&P MidCap 400 Index. For example, if a sector weighting is 20%, the weight of that sector in the Fund should between 5% and 35%. A sector variance analysis is reviewed by the Student Managers each week as a part of the Weekly Performance Sheet (WPS) to ensure the portfolio composition is synchronized with the Fund’s goals and objectives. The Performance Evaluation Group (PEG) constructs an S&P MidCap 400 Index sector variance analysis using the Global Industry Classification Standards (GICS) available on Bloomberg API. If the Fund contains an ETF, the weighting of that ETF is also included in the overall portfolio composition weight for each sector.

5. Other Considerations:

5.1. The value of any initial purchase, excluding ETFs, should be equal to a 4%, 6%, or 8% holding of the total Fund. The initial purchase weight will be determined by the Student Managers after the decision has been made to purchase the equity security. Student Managers will vote for a 4%, 6%, or 8% position and a simple majority will determine the initial purchase weight. In the case of a tie for the most votes, the Student Manager who presented the equity security will determine the initial purchase weight from the two options. Decisions will be based on both individual equity security considerations and portfolio considerations. See Section 4.5 Voting for additional information.

5.2. The Fund does not invest on margin.

5.3. The Fund does not sell short investment instruments.

3.6. Risks: The Fund is subject to the risk of loss based on the nature of investments and market conditions. The risk of market disruption, counter party and custodian risk, lack of liquidity, changes in regulatory environment, volatility, inaccuracy in valuation models and portfolio accounting are all assumed risks inherent to the Fund.