Reference no: EM132333548

Purpose: To allow students to demonstrate an understanding of the various investment solutions available to suit real world situations, identifying the most appropriate investment options for given sets of circumstances. This assessment will reflect the advice that would be expected from students when working in a modem accountancy practice.

Topic: You are responsible for managing a $250,000 portfolio for a local sporting organisation. The managing committee has heard that by investing in shares and other financial instruments, the sporting organisation could achieve a higher return than what is currently earned through an internet cash maximiser account. The committee has heard that you are currently studying a unit on security analysis and portfolio management. You are required to build a portfolio as at 30 September, 2018, track the performance of your individual investments on a monthly basis through to the end of March, 2019, and submit a report on the rationale of the original portfolio construction (in September, 2018) and its half-yearly performance from 1 October, 2018 to 31 March, 2019.

Task Details:

Part 1
Prepare an investment policy statement for the local sporting organisation based on what you learn in Topic 1. You may specifically consider the (i) liquidity requirements; (ii) return requirements; (iii) risk tolerance; (iv) time horizon; (v) tax considerations -taxes and fees relating to the investments should be ignored (vi) regulatory and legal considerations; and (vii) unique needs and circumstances. Further given the sensitivities of the members of the organisation, you are asked to avoid investments that are seen to be socially and ethically NOT responsible.

Part 2
The sporting organisation is considering a mix of equity, debt and cash (or money market securities). You are asked to determine an asset allocation strategy by considering the current and future economic situations, government policy and monetary conditions. You are required to suggest a asset allocation strategy. For example a mix of 40% equity, 40% debt and 20% cash (and marketable securities) may be suitable for an organisation or an individual pursuing a balanced portfolio. Prepare an account of why the chosen asset allocation is appropriate for the local sporting organisation.

Part 3
Having decided on a mix of asset allocation, you are now required to choose specific investments for equity and debt. You may give due consideration to possible diversification benefits when considering investments from different sectors or industries. You are required to prepare an explanatory statement as to why the specific investments (shares, bonds, etc.) are chosen, along with their nature and risks.

Part 4
Prepare a report showing details of the above steps with timelines and tracking performance of your portfolio on a monthly basis, through the 6 months from 1 October, 2018 to 31 March, 2019.. You may compare the performance of your selected portfolio with the cash maximiser return, and any other relevant benchmarks. Offer relevant comments (e.g., if the portfolio underperforms, to highlight that performance normally needs to be compared over a longer time-frame than 6 months).

Research Requirements: Students need to support their analysis with reference from the text and minimum of six (6) suitable, reliable, current and academically acceptable sources - check with your tutor if unsure of the validity of sources. Students seeking Credit or above grades should support their analysis with increased number of reference sources comparable to the grade they are seeking.

Presentation: 2,500 ± 10% words in short Report format. The word count excludes the cover sheet, contents page, references, appendices, and illustrations (e.g. diagrams, graphs and tables).

Students need to stay within the assigned word limits, and indicate the word count on the cover page of the assignment. Marks will be reduced for assignments shorter than or greater than the minimum word count.