Reference no: EM132731527

Context: Portfolio Construction & Reporting

You have been allocated €200 million to invest on behalf of a large Irish institutional client. The mandate is quite open-ended, but you can assume that the client has a long-term investment horizon and has a reasonably high risk tolerance.

However, the client does not wish to pay the costs associated with a fully active portfolio.
a) Formulate an Investment Policy Statement (some sample statements are on Blackboard, but there are many IPSs available online to use as a template)
b) Decide on your asset allocation policy. You can decompose your portfolio by a combination of asset classes, geography, themes, and/or sectors
c) Decide on an appropriate benchmark portfolio. This will obviously depend on your asset allocation strategy. NB: Develop a reasonably simple composite benchmark.
d) Based on the above steps, split the portfolio into active and passive components. Explain your reasoning for the active / passive mix.
e) Note: You may wish to set up your own equity fund using a range of stock-picking tools. However, this should not exceed 10% of your overall portfolio.
f) Formulate an investment process. This can be a combination of quantitative and qualitative approaches. For example, you may wish to use stock / ETF screeners or themes.
g) Use an appropriate financial database or website to find the NAV (net asset value) or asset prices. Convert into the appropriate currency, if necessary (you can use https://www.xe.com/ for rates).
NB: The objective here is to allow you time to research your ideas before making the investments.
h) Construct an Excel spreadsheet that shows the allocation and initial investment in each asset, ETF, or index fund.
i) You can rebalance the portfolio on a weekly basis. If you decide to reallocate money from one fund or asset to another, you will have to calculate the effect on the portfolio each week up to Friday 18th December. You can ignore any commissions or fees.

Required:
1) Write up an Investment Process document to detail the steps involved in a) to e) above.

2) Construct an overall Excel spreadsheet to show the portfolio's performance for the period from your initial investment (recall deadline is 20/11/19) to the final date for calculation 18/12/20 (you can use a few days either side of this window)

3) Write a ‘Monthly Fund Report' to detail the investment approach, fund performance (versus benchmark), market summary (see examples on Blackboard), best- and worst-performing assets, and asset allocation. Your report should explain the key factors behind the fund's monthly performance.

4) Develop a short PowerPoint presentation slideshow to summarise all of the above. Please also make a short video to accompany this slide-deck. (You can think of this as the presentation that you would give to the institutional client - you will NOT have to make a presentation in class).

Attachment:- Portfolio Management.rar