Investment and Portfolio Management : Assignment
Added on 2020-07-23
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INVESTMENT AND PORTFOLIOMANAGEMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1PART 1............................................................................................................................................1(A)Selection of companies..........................................................................................................1(b)Asset allocation by using judgement and theories..................................................................3© Selection of benchmark index in order to evaluate firm performance....................................3Part 2................................................................................................................................................4Performance of portfolio and reason for change in return...........................................................4Part 3................................................................................................................................................4Critical evaluation of performance of portfolio by using Trenyor ratio......................................4Part 4................................................................................................................................................5Passive and active management strategy in business..................................................................5CONCLUSION................................................................................................................................6REFERENCES................................................................................................................................7APPENDIX......................................................................................................................................8YTable 1Selection of companies on basis of parameters...................................................................3Table 2Trenyor ratio performnance.................................................................................................6Table 3Classification of corpus.....................................................................................................10Table 4Allocation details...............................................................................................................10Table 5First week investment........................................................................................................10Table 6Second week investment...................................................................................................11Table 7Third portfolio...................................................................................................................11Table 8Fourth portfolio..................................................................................................................12Table 9Net return gained on portfolio...........................................................................................13Table 10Benchmark return and portfolio return............................................................................13Table 11Portfolio comparison.......................................................................................................13 | P a g e
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INTRODUCTION Portfolio construction is the art that portfolio managers have where they determine suchcombination of securities which lead to less risk and maximum return in business. In the currentreport portfolio is constructed and under this three sectors are taken in to account namelyhealthcare, aviation and media sector. Under these three sectors individually two firms are takenin account. In healthcare sector two majors namely Astrazeneca and GSK are taken into account.In case of aviation sector Easyjet and Ryanair are selected and along with this in media sectorWPP plc and Sky plc is taken into account. For construction of portfolio fundamentals of stocksand news that were prevalied in the market are taken in to account. At end of the report in orderto measure performance of the portfolio Trenyor ratio is taken in to account and in this way firmsare selected and portfolio is constructed in the report.PART 1(A)Selection of companiesTable Selection of companies on basis of parametersHealthcarePEIndustry PE ratioEPSEarnings growth rateAstraZeneca23.39332.8Growth rate is low but firm is working on multiple projectsGlaxoSmithKline28.17330.48Growth rate is highAviationEasy jet9.2933108Growth rate is moderateRyanair14.49331.17Growth rate is highMedia sectorSky plc16.193340.61Robust growth rateWPP plc9.39331.38Robust growth ratePortfolio construction is the art and one need to consider multiple factors while constructingportoflio. It can be seen from above table that six firms are taken in to account from threedifferent sectors namely healthcare, aviation and media sector. It can be observed that in | P a g e
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