logo

Developing an Investment Portfolio : Assignment

   

Added on  2020-12-09

13 Pages3348 Words487 Views
FinancePolitical Science
 | 
 | 
 | 
DEVELOPING ANINVESTMENT PORTFOLIO
Developing an Investment Portfolio : Assignment_1

Table of ContentsINTRODUCTION...........................................................................................................................1PART 1............................................................................................................................................1Preparation of investment policy statement for the local tennis club based on liquidity, returns,risks, time, tax and regulations ...................................................................................................1PART 2............................................................................................................................................3Preparation of prominent capital allocation strategy .................................................................3PART 3............................................................................................................................................4Preparation of portfolio that depicts the mix of capital allocation..............................................4PART 4............................................................................................................................................6Preparation of report that depicts the timelines and shows analysis of performances based onthe market index..........................................................................................................................6CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
Developing an Investment Portfolio : Assignment_2

INTRODUCTIONPortfolio Management relates to striking a balance between the investment mix andpolicies with investment objectives in order to earn higher returns at minimum risk. A Portfolioconsists of a basket of different financial instruments such as stocks, bonds and marketablesecurities with an objective to hedge the investor's risk and increase his returns at the same time(Bonizzi, 2013). This project report aims at developing an investment portfolio by the end ofDecember, 2018 for a local tennis club called Keysborough Tennis Club and track the portfolio'sperformance on a weekly basis.PART 1Preparation of investment policy statement for the local tennis club based on liquidity, returns,risks, time, tax and regulations Keysborough Tennis Club is an elite tennis club situated in Victoria, Australia. It has helda number of important state and national championships over the years. The club has been usingan internet maximiser account for its saving to earn interest income. However, the club'smanaging committee has decided to invest in various financial instruments to increase itsrevenue. The budget decided by the committee for the given portfolio is $500,000. Aninvestment policy statement has been formulated for the same and has been presented below:Keysborough tennis clubStatement of investment policyPurpose:This Investment Policy Statement aims to furnish the framework in relation toobjectives, policies and guidelines for the investment in securities of Keysborough Tennis Club,Victoria, Australia. The purpose of investing in such instruments is to utilize the Club's funds ina prudent and conservative manner by provisioning for them through diversification of assetclass held by the club. A copy of this statement will be furnished to all Investment managers. Investment Constraints: The investment constraints included in this policy statement relate to the following keyareas:Liquidity Requirements: Keysborough is a leasehold tennis facility with limited1
Developing an Investment Portfolio : Assignment_3

financial pockets to expend on the facility such as renovations, constructions of courtsand other areas. The club has decided to increase their liquidity by keeping aside$500,000 as investment budget for the portfolio. The Club may withdraw 5% of itsinvestment income annually for operational purposes.Return Requirements: The assets will be invested, with prudence, to generate adividend and interest income of at least 5% to achieve the set goals and objectives ofthe club.Risk Tolerance: A well-diversified investment portfolio shall be maintained with a verylow risk tolerance. Along with this a cash account with a risk tolerance of zero to verylow shall be opened and maintained to provide for any tax obligations and otherexpected expenditure likely to be incurred in future. Time Horizon: The Club is expected to operate on perpetual basis. For this plan, a 10year time horizon for the investments made in stocks, bond or cash equivalents such asMarketable Securities will be employed. An appropriation will be made for thefluctuations experienced in the market with due care and diligence. Tax Considerations: The Club is tax-exempt as a community service organisation underAustralian Taxation Office Guidelines prescribed by the government. This tax-exemptstatus of the club must be taken into account while investing for organisation.Regulatory and Legal considerations: The Club follows a strict policy of prudence inorder to protect its assets and members. Proper care must be taken when makinginvestments on Club's behalf by avoiding options that may prove to be sociallyunacceptable and unethical for its image. Any form of investment disallowed by thegoverning laws shall be overlooked while considering diversification. Unique Needs and circumstances: The Club may withdraw more than 5% of itsinvestment income in case of occurrence of any unforeseen contingency or toaccommodate any changes in organisation's policy and guidelines.Diversification: The club shall keep a well-diversified portfolio as deemed reasonable. The equitycomponent of the portfolio shall not exceed more than 4.7% nor will the total holdings in anycompany exceed 8.5% at any given point of time. Securities restricted to one sector shall not go2
Developing an Investment Portfolio : Assignment_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Portfolio Management of Dendy Park Tennis Club
|16
|3603
|220

Developing an Investment Portfolio
|12
|3535
|289

Investment Management: Portfolio Management of Dendy Park Tennis Club
|11
|3079
|407

Developing an Investment Portfolio: Strategies, Performance Evaluation, and Recommendations
|13
|3644
|170

Investment Policy Decision
|13
|3006
|86

Investment Anlysis Management Report
|14
|3083
|12