Investment Management Solution

INVESTMENT
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
QUESTION 1..................................................................................................................................3
Designing a Passive Strategy to ascertain the risk-free rate of ASX 200....................................3
QUESTION 2................................................................................................................................18
Critically reflecting ways of strategy of active portfolio...........................................................18
Critically differentiating the outcome of Active and Passive portfolio returns.........................20
Discussing the analysis and results............................................................................................20
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................22

INTRODUCTION
To analyze the market which will be adequate and helpful to businesses in relation with
making the appropriate operational practices as well as determination of the market strength of
entities. To determine the capital stability and the return payable by the companies there Have
been selection of 20 industries which are listed in ASX 200 index. However, the analysis will be
based on passive and active index analysis which will be measured and compared as per making
clear observation on the operations of business efficiency.
QUESTION 1
Designing a Passive Strategy to ascertain the risk-free rate of ASX 200
Abacus Property Group Stapled Securities
Analysis of Sharpe ratio
Less than 1 Not good
Between 1 to 1.99 Ok
Between 2 to 2.99 Good
More than 3 Exceptional

Date Sharpe Ratio
31-12-06 0
31-01-07 -0.903140492
28-02-07 5.633890809
31-03-07 -0.72819023
30-04-07 1.293390719
31-05-07 -1.808774512
30-06-07 0.334904266
31-07-07 -0.648377083
31-08-07 -0.799281104
30-09-07 -0.477565883
31-10-07 -30.91733162
30-11-07 -0.384476658
31-12-07 -3.060199349
31-01-08 -1.572520676
29-02-08 -0.362646654
31-03-08 0.091129522
30-04-08 -1.182471338
31-05-08 -2.713458963
30-06-08 0.925247084
31-07-08 81.46695599
31-08-08 -3.252687635
30-09-08 -1.888609948
31-10-08 -4.697634618
30-11-08 -1.451019497
31-12-08 1.091594268
31-01-09 0.997111094
28-02-09 0.947629992
31-03-09 2.99648698
30-04-09 1.649856352
31-05-09 4.484199612
30-06-09 -0.860621375
31-07-09 -0.566752075
31-08-09 2.216332801
30-09-09 -0.112481413
31-10-09 3.220272802
30-11-09 -0.707106781
31-12-09 -289984.9442
31-01-10 1.804039678
28-02-10 -0.931328335
31-03-10 1.041067656
30-04-10 0.388720371
31-05-10 1.039302262
30-06-10 -0.595243128
31-07-10 0.630188142
31-08-10 1.429880816
30-09-10 -0.88440549
31-10-10 0.961415811
30-11-10 0.6113135
31-12-10 -1.327395928

Interpretation: The above graph is reflecting Sharpe ratio of Abacus Property with huge
fluctuation in one year but in remaining it is depicted as stable which can be interpreted that it is
giving average return (Park, Chae and Cho, 2017).
Adelaide Brighton:
Date Sharpe Ratio
31-12-06 0
31-01-07 1.487610634
28-02-07 0.998851873
31-03-07 2.561909086
30-04-07 2.837574896
31-05-07 0.925918018
30-06-07 -1.912130482
31-07-07 1.850402482
31-08-07 29.34707508
30-09-07 -1.049184845
31-10-07 0.355352083
30-11-07 -0.204938283
31-12-07 0.742597729
31-01-08 0.873565025
29-02-08 -0.022193353
31-03-08 0.038733786
30-04-08 1.902777049
31-05-08 0.813080216
30-06-08 -1.211933293

31-07-08 0.120844035
31-08-08 -0.963229899
30-09-08 -165.9149462
31-10-08 -12.0964096
30-11-08 1.311182621
31-12-08 -2.156881804
31-01-09 0.789944457
28-02-09 10.06693783
31-03-09 4.551713587
30-04-09 1.628480678
31-05-09 -0.845601478
30-06-09 1.200805407
31-07-09 6.126101949
31-08-09 -0.352836908
30-09-09 0.917428472
31-10-09 -1.294689988
30-11-09 2.983234435
31-12-09 -2.598449218
31-01-10 -1.114378695
28-02-10 4.884986333
31-03-10 1.293467063
30-04-10 0.164007824
31-05-10 0.379799126
30-06-10 2.088872834
31-07-10 1.036697936
31-08-10 5.066418877
30-09-10 5.237344597
31-10-10 -1.595924557
30-11-10 3.076059114
31-12-10 1.63996991
31-01-11 -0.928563688
28-02-11 -1.321231265
31-03-11 -1.756418335
30-04-11 0.656805069
31-05-11 0.135368163
30-06-11 -2.190544613
31-07-11 1.090815411
31-08-11 0.493455195
30-09-11 0.367660658
31-10-11 0.786225703
30-11-11 0.61756767

31-12-11 -0.442340231
31-01-12 0.359581734
29-02-12 -0.834195312
31-03-12 2.270255818
30-04-12 0.474501634
31-05-12 1.50159983
30-06-12 0.688494152
31-07-12 -1.312619985
31-08-12 2.391042033
30-09-12 5.44446981
31-10-12 0.985065417
30-11-12 -0.869141471
31-12-12 4.259274568
31-01-13 3.722964343
28-02-13 -0.390092725
31-03-13 -0.809575462
30-04-13 0.528158937
31-05-13 0.552973716
30-06-13 -0.746093761
31-07-13 0.60320371
31-08-13 1.66227561
30-09-13 0.14900488
31-10-13 0.233532361
30-11-13 -1.219083243
31-12-13 0.94107747
31-01-14 3.953993863
28-02-14 -1.569994758
31-03-14 -1.001502817
30-04-14 -1.407927411
31-05-14 0.991677513
30-06-14 0.883941544
31-07-14 -1.477959722
31-08-14 -2.283926338
30-09-14 1.976216536
31-10-14 0.85722464
30-11-14 8.059011104
31-12-14 -0.675533957
31-01-15 2.583897322
28-02-15 1.288890048
31-03-15 0.959431839
30-04-15 1.319996364

31-05-15 -0.688783515
30-06-15 8.001721257
31-07-15 0.446529586
31-08-15 0.00510699
30-09-15 -0.834077191
31-10-15 1.104958144
30-11-15 2.212361719
31-12-15 0.678873793
31-01-16 1.048640876
29-02-16 -0.41401906
31-03-16 0.499247202
30-04-16 2.087980027
31-05-16 0.311620065
30-06-16 -0.039485949
31-07-16 -1.918549257
31-08-16 1.428148169
30-09-16 0.176383486
31-10-16 -1.047994232
30-11-16 1.214783041
Interpretation: The above graph is depicting Sharpe ratio of Adelaide Brighton which
has various fluctuations as it is indicating that it is giving extraordinary returns in between but
due to many new entrants in its industry it started giving average return but in stable position
(Clark, 2016).