Portfolio Evaluation Report for J F Investment

Running head: FINANCE PORTFOLIO MANAGEMENT
Portfolio Evaluation Report
For
J F Investment.
Prepared by
Mr. Tom Karman, Investment Manger
Chartered Financial Analyst (CFA)
29th September, 2019.
Private & Confidential

PORTFOLIO MANAGEMENT1
Table of Contents
An Important Message.....................................................................................................................2
Investment Profile............................................................................................................................3
Portfolio Overview..........................................................................................................................4
Stocks Selection...............................................................................................................................5
Risk Free Rate..............................................................................................................................6
Stocks Screening Process............................................................................................................6
Stocks Selected............................................................................................................................7
Analysis of Stocks Selected.........................................................................................................8
Portfolio Construction...............................................................................................................15
Weightage of Stocks..................................................................................................................16
Asset Allocation.............................................................................................................................18
Target Asset Allocation.............................................................................................................19
Recommendations..........................................................................................................................20
Bibliography..................................................................................................................................21

PORTFOLIO MANAGEMENT2
An Important Message
To,
J F Investments
Sydney, Australia
Sir,
We are pleased to present you with the Investment Portfolio Report that has been
analysed and constructed for you based on the investment profile (risk and return characteristics)
and selected the investment style that will be aligned with your long-term goals. Based on the
information report a comprehensive portfolio report has been prepared that would allow you to
better assess the investment strategy and style that will be followed for managing your funds.
Please note that the following parameters have been considered for portfolio construction:
1. Risk Profile and Asset Allocation
2. Portfolio Risk-Return against benchmark
3. Historical return of Portfolio
4. Stock Portfolio Diversification Risks
5. Mutual Fund Portfolio -Risk Returns
Also please note that the investment period taken into consideration is for a five-year
period commencing from 1st November 2019. On the other hand, analysis of the stocks has been
considered from September 2014-September 2019 for stock selection and screening process.
Sincerely
Tom Karman,
Investment Manager.

PORTFOLIO MANAGEMENT3

PORTFOLIO MANAGEMENT4
Investment Profile
The investment profile of JF Investment would be allowing us better assess the
investment objectives and goals that matches with the client’s risk appetite. The risk profile has
been determined as a moderate profile, whereby stocks that have provided decent returns with
moderate risks would be taken into consideration.
It is important to note that based on the investment profile created for the stock we have
listed down some of the key investment characteristics that would be followed:
 Your Primary Goal will be capital growth along with moderate risk.
 Asset Allocation would not be done in any asset exceeding 25%.
 Growth Stocks and Value stocks both would be preferred for investment.

PORTFOLIO MANAGEMENT5
Portfolio Overview
There is a wide class of asset classes that are available to investor nowadays, but
selecting a right and an optimal one that matches with the investor’s risk and return is an
important concept and the same has been visualized in the portfolio construction process. The
portfolio construction process that has been applied for the purpose of selecting the asset class
would be based on the historical returns generated by the stocks and the associated risks with the
stocks. The process of identification of stocks would be dependent on fundamental analysis of
the stocks (alpha, beta, risk, standard deviation and variance of each of the stock). In total of 20
stocks would be taken into for the purpose of analysis and based on fundamental approach in
total of 10 stocks would be selected for portfolio constructed. The stocks selected and various
other asset class analysed would be part of the US$100 Million. It is important to note that the
time period taken for fundamental analysis of the stocks is for a five-year time period whereby
relevant stock data has been considered from September 2014-September 2019. On the other
hand, the investment horizon period taken for the stock is for a five-year period commencing
from 1st November 2019. The total amount of investment that would be considered from JF
Investment our potential client would be around US$100 Million and the same would be
allocated in the construction of portfolio. The back-testing process of the selected 10 stocks for
the portfolio construction will be well done with the help of key performance statistics like beta
of each of stocks with market index, cumulative return generated, scenario analysis (including
alpha of the stock). The capital asset pricing model will be well applied for comparing the
difference between the expected rate of return (CAPM) and the actual cumulative return
generated (Portfolio Strategy, 2019).