Construct equity portfolio for investors

Description Assume you have recently been recruited to manage an equity fund. Your line manager has allocated you a fund that has a nominal sum of £100,000,000 and your task is to construct an equity portfolio consisting of no more than 10 stocks using a fundamental approach to stock selection. You are required to prepare a report to your manager for approval which provides the philosophy behind your selection process and explains why customers should invest in your fund. The report is aimed at household investors. General tips: •Although you are free to choose your fundamental-based approach to stock selection, given we have spent a long time discussing value strategy it might be wise to choose a value approach. •Remember the Buffett quote: “No matter how great the talent or efforts, some things take time. You can’t produce a baby in one month by getting nine women pregnant.” Don’t worry that you will not know how they perform over the holding period. Remember, the holding period for value strategies tend to be quite long – longer than the time you have to hand in this assignment. •Another useful Buffett quote: “It is not necessary to do extraordinary things to get extraordinary results.” In other words, don’t allow yourself to feel swamped by this assignment. The basics of value investing are straightforward. The structure of your report should be as follows: 1) The pitch to the customer (20 marks) This should be a fairly brief and concise account of the philosophy behind the selection process. It should be non-technical (no graphs or tables) and written in such a way that non-specialists can understand Tips for pitch to the customer: • Remember who your audience is. You should assume they have not received an education in finance. • You should communicate the philosophy underpinning the management of the fund in a way that is accessible to an intelligent non-specialist. For example, is it an active or passive fund? Have the stocks been chosen because of a risk-return profile or because you have a system for identifying mispriced stocks? • Your clients are going to want to know whether this is a high or low risk fund. 2)Annex 1: The intellectual foundations of the selection process (40 marks) In this section, you should provide a more robust justification for your approach. In doing so, you are expected to refer to the theoretical and empirical literature which underpins your approach taking care to reference relevant research in the area. Tips for Annex 1: • It is crucial that you are clear whether your approach is premised on a belief in the EMH or in exploiting deviations from the EMH. • Explain why you adopt your chosen approach citing literature as appropriate. 3) Annex 2: A description of the stock selection process (40 marks) In this section you should provide a clear written description with appropriate equations (use equation editor in Word) to describe your method. In addition, you should provide appropriate tables with descriptive statistics, including the risk of the portfolio. Tips for Annex 2: • Provide summary stats for any metrics that you use to guide your stock selection • Be careful to present information in a clear manner which is easy on the eye. This especially applies to tables and any equations you use. • In preparing tables, think about what information is useful to justify your stock selection. • Try to avoid providing pages and pages of tables and graphs. If you’re wise about how you construct tables, you can present a lot of information in each table. Word Limit: 2,000 Report and appendix will be submitted to Turnitin assignment dropbox for checking Report should: • Be written in a plain style, using subheadings and lists where appropriate. • Be properly referenced acknowledging all the sources you have used, and only the sources you have used, in the body of the text and at the end in a section headed ‘References’. • Include evidence of locating and reading sources beyond the suggested initial reading. Sources of Data The main sources of data are Bloomberg and Capital IQ. References The main references used are listed below, but others sources can easily find in the library. Ackert and Deaves (2010), Behavioural Finance: psychology, decision making and markets, especially pp. 63-65, 219-221 and chapter 19 Bird and Casavecchia (2007) ‘Sentiment and financial health indicators for value and growth stocks: The European experience’, European Journal of Finance, 769-793 Fama & French (1998) ‘Value versus growth: the international evidence’, Journal of Finance, 1975-1999. La Porta, Lakonishok, Shleifer, Vishny (1997) ‘Good news for value stocks: further evidence on market efficiency’, Journal of Finance, 859-874. Lakonishok, Shleifer, Vishny (1994) ‘Contrarian investment, extrapolation and risk’, Journal of Finance, 1541-1578. Piotroski and So (2012) Identifying Expectation Errors in Value/Glamour strategies: A fundamental analysis, Review of Financial Studies Piotroski, J.D. (2000) Value investing: The use of historical financial statement information to separate winners from losers, Journal of Accounting Research, 38, 1-41 Siegel, J.J (2014) Stocks for the long run, McGrawHill, chapter 12

#Construct #equity #portfolio #investors

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

patient file

Your final project for this course will be a patient record analysis. You will apply the knowledge of anatomy, physiology, and pharmacology that you have developed during this course in a thorough review of existing patient information in the Final Project Patient File. Specifically, you will review a patient’s history

610 6-1 Discussion: Improve, Part Two—Mitigating Unwanted Consequences

 The Essential Workplace Conflict Handbook. Including the IMPROVE Supplementary Document. Next, in your initial post, address the following: • In what ways do you perceive the Improve phase as being informed by the other phases of DMAIC that you have worked with in the course thus far? • How can

Code of conduct

 For this assignment, Write a paper about employee codes of conduct using information from your textbook and at least two other scholarly sources. First, research employee codes of ethics, especially for the medical field. Next, find some examples of employee codes of ethics from medical facilities and choose the one

Human Growth and Development

Scenario: Simon Whitaker is 42 years old and has suffered from mental illness since his late teens. He lives in a flat in a large housing estate. He lost his job as a warehouse cleaner after he was admitted to hospital the last time he became ill, two years ago.

Exporting Security

Write a 2 page argumentative essay on the links provided below. Link 1: https://www.airuniversity.af.edu/SSQ/Book-Reviews/Article/1292320/exporting-security-international-engagement-security-cooperation-and-the-changi/ Link 2:https://digital-commons.usnwc.edu/cgi/viewcontent.cgi?article=1049&context=nwc-review Link 3: https://digital-commons.usnwc.edu/cgi/viewcontent.cgi?article=1049&context=nwc-review #Exporting #Security

Organizational culture and values

 Details: Prepare a 10-minute presentation (10-15 slides, not including title or reference slide) on organizational culture and values. Describe how alignment between the values of an organization and the values of the nurse impact nurse engagement and patient outcomes. Discuss how an individual can use effective communication techniques to overcome

Document Analysis

Document Analysis (5% – c. 500 words) Primary sources are writings that were produced by individuals or groups at the time of the historical events or issues that they deal with. A number of such documents have been placed on Blackboard, organized by course unit. This assignment requires you to

M3D1: Big Data

The discussion will examine the social interaction of participants regarding an issue or situation and its impact on research data. This discussion addresses the following module outcomes: •MO1: Become familiar with the process of conducting marketing research methods and research tools •MO2: Review the process marketers use for identifying and

Case Study 1 and 2 Pneumonia and Addison diseases

Review the case study and answer all questions with a scholarly response using APA and include 2 scholarly references. Answer both case studies on the same document and upload 1 document to Moodle. Case Studies will be uploaded to Moodle and put through TURN-It-In (anti-Plagiarism program) Turn it in Score

Should schools ban unhealthy snack machines?

 Your outline should include: An explanation of the controversial issue, why is it controversial? Identify which position or side you will take in your paper, and explain why. If you don’t agree with the position you are taking discuss how this could affect your argument on the topic. If you

The Outcome of Inequality of Wealth and Income

Research Topic: Submit an idea for a research study based on a business/economic problem. • Write the title of the study. • Explain your overarching aim for the study. • What is the problem? • What is the significance of it? • Draft at least two research questions. Due 1/27

“practice of professional engineering”

1. “practice of professional engineering” means any act of planning, designing, composing, evaluating, advising, reporting, directing or supervising that requires the application of engineering principles and concerns the safeguarding of life, health, property, economic interests, the public welfare or the environment, or the managing of any such act; (“exercice de

Curriculum Development and Evaluation

 Learning Materials: Keating, S. B. (2011). Curriculum development and evaluation in nursing (2nd ed.). New York: Springer. (Chapter 13) Books are on website Vital Source user name is sred9196@yahoo.com, the password is Bungalow9@ • Exercise #1: Address an educational need among nursing staff at a health care agency. In the

Epidemiology and Surveillance

Research the public health agency in Chicago, IL and develop a presentation on its structure, response capabilities, surveillance tools, and role in emergency management. In your response, include a description of the community served by the department (Chicago), its emergency response structure, surveillance systems that are used at hospitals, biohazard

General Psychology Application

 General Psychology Application Essay Over the course of the class, we have discussed a number of different psychological concepts and theories. For your paper you will be asked to connect a real life experience or observation with a concept or theory from lecture and/or your textbook. Your assignment should include

Issues and Trends in Curriculum Development

 Learning Materials: • Iwasiw, C., Goldenberg, D., & Andrusyszyn, M. (2009). Curriculum development in nursing education (2nd ed.). Boston: Jones & Bartlett. (Chapters 13 and 14) • Keating, S. B. (2011). Curriculum development and evaluation in nursing (2nd ed.). New York: Springer. (Chapters 16 and 17) PowerPoint • Chapter 13

Foundation of Nursing Module 2.1 ( Discussion)

Module 2.1 – Discussion Nursing Theories and Theorists Instructions: After reading the assigned chapters, please post two discussion questions based on the readings along with your answers to the following questions: Did any of the theories or theorist influence your own personal theory of nursing; and consequently, your own view