History
Named for the 1939 UO men’s National Championship basketball team, the Tall Firs Portfolio was originally seeded with $450,000 and is currently the largest of the group’s three portfolios. This capital came from two sources: the UO Foundation and four, generous, private donors. The portfolio has been actively managed since May 2002, and has posted strong relative performance since its inception. Within the Tall Firs Portfolio, capital gains and dividends within the Tall Firs Portfolio are not taxable, which draws parallels to managing a retirement account such as an IRA. Additionally, beginning back in the 2007-08 school year, the group was cleared to take two cash distributions per year from the portfolio in order to help fund operations and educational trips. The size of these distributions are tied to the portfolio’s performance.
Strategy
The Tall Firs Portfolio only invests in equity securities, and follows a value investing style. It has a benchmark consisting of the Russell 3000 Index. The market breakdown consists of five sectors: Consumer Goods, Financials, Healthcare, Industrials/Materials/Energy (IME), and Technology. Sector holdings are closely managed to ensure no significant deviations occur from the benchmark. Using the CAPM model as a means for performance measurement, this portfolio’s objective is positive alpha generation. Sector bets are not typical, and the group strives to add fundamentally undervalued companies to the portfolio. As the benchmark does not have a cash allocation, the group attempts to keep a large portion of its funds invested in selected securities. However, when the portfolio does have a significant cash position and no buying opportunities are present, the cash is typically invested in a market ETF, such as the iShares S&P 500 Index (IVV) or iShares Russell 2000 Index (IWM). In that manner, the group is able to stay invested in the market, while continuing to maintain its market cap and sector allocations. Shares in these ETFs are then sold when the group identifies specific companies for investment.