Contents

• Investment policy – Introduction, Investment objectives, Target return, Level of risk, Investment constraints
• Developing the portfolio – Basis of selection of shares, Selecting shares, efficient frontier, choosing optimal portfolio
• Portfolio’s performance evaluation – Fund manager’s objectives, Valuation methods, holding period return, Portfolio measurement
• References
• Assignment on Portfolio management for investors

Description

The purpose of this report is to show how the 100 million dollars invested as trainees at Brown Investment have performed over 8 weeks period from 17th March 2006 till 12 May 2006. This report consists of three segments. The first part of report refers to the investment policy of the current portfolio. Under the investment policy, the strategy of the current portfolio is to maximize shareholder return through the strategy of total return with main emphasis on capital appreciation. The second part of the report refers to various methods used to select the shares in which the given $100 million dollars is to be invested. Various methods were used to select the shares, such as expected return, standard deviation, coefficient of correlation, beta, and variance. The securities chosen are Alinta, BHP Billiton, Caltex, James Hardie, David Jones, Agro Investment, and Macquire Bank. The third part of the report refers to the evaluation of the performance of the current portfolio. To measure the performance of the current portfolio, treynor’s and sharpe method were used to calculate the ratio. Also the yield rate for the portfolio and market(S&P/ASX200) were calculated to compare whether the current portfolio has outperformed the current portfolio is not.