Stanford Blyth Fund FICC Group Current Holdings Review -------------------------------- ---------- DBC -------------------------------- ----------- Harrison

Stanford Blyth Fund FICC Group

Current Holdings Review------------------------------------------

DBC-------------------------------------------

Harrison Caruthers Jaewoo Jang John Solitario Kuno Choi Sen Lin

PowerShares DB Commodities (DBC)

02/18/2015FICC Group Current Holdings Review

Symbol Price QuantityPrice Paid

Total Gain Market Value

DBC $18.30 688 $25.61 - $5029.28 | - 28.54% $12590.4

Relative Performance to Benchmarks


DBC has generally underperformed the market over the past 3 years, though it has done better than other commodities tracking indices, such as the Bloomberg Commodity Index.source: http://etfdb.com/etf/DBC/#fundamentals

ETF Component Weightings


Sector Weight

Oil & Gas 45.31%

Agricultural Softs 27.14%

Gold & Silver 13.65%

Base Metals 9.04%

Miscellaneous 4.86%

Total 100%

Listed February 3, 2006, DBC follows movements in the commodities market with a heavy emphasis on crude oil and

other energy-related commodities.It tracks the DB Commodities Index.

DBC Current Portfolio Summary DBC by Weighting

Correlation Analysis 1

DBC highly correlated with Brent Crude at 0.90 over 5 years Further holding onto DBC akin to a long directional bet on oilsource: https://www.invesco.com/portal/site/us/financial-professional/etfs/tools/correlation-analyzer


Correlation Analysis 2

Moderate to high degree of inter-correlation between ETF components.All are inversely correlated to value of USD against basket of foreign currencies.Not significantly hedged. Heavy weighted correlation with oil & gas instruments.source: http://www.mrci.com/special/correl.htm


Thesis : Sell at Target Price $20

• FICC recommends unwinding DBC position at target price $20.

• Following the recession, DBC peaked at $30 with oil prices above $100 in 2011. Previous highs not expected.

• Short-Medium outlook for oil markets bearish due to due to changing fundamentals.

• No strong directional opinion agricultural commodities or precious metals among members, hence no edge.


Exogenous Shocks

• Crude Oil : US-led advances in shale oil make scaling production cheap and fast. Upside potential limited.

• US dollar strength. General downward pressure on commodity prices.

• Chinese factory output stagnant. Copper and Aluminum demand hinges on industrial production.

• Soft (agricultural) commodities : no trending, no edge. Downturn persistent since end of commodities super-cycle.


Arguments Against

• OPEC raises prices / cuts output• US shale producers closing • Value-Approach investment strategy

(oversold)• Portfolio Diversification.


Thoughts?


Documents

Stanford Blyth Fund FICC Group Current Holdings Review -------------------------------- ---------- DBC -------------------------------- ----------- Harrison