Investment Management: Trends and Disruptions

This assignment delves into the current landscape of investment management, examining key trends and disruptions impacting the industry. It analyzes topics such as ESG integration, the rise of strategic beta investing, the influence of technology, and the evolving roles of asset managers. The provided literature review highlights diverse perspectives on these issues, emphasizing the dynamic nature of the investment management sector.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Introduction:...............................................................................................................................2
Research:....................................................................................................................................2
Analysis:.....................................................................................................................................7
Recommendation and conclusion:...........................................................................................10
Reference and Bibliography:....................................................................................................12

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Introduction:
The overall assessment mainly aims in evaluating the investment process of both
young families and retirees. Moreover, adequate research is conducted in the assessment for
identifying the investment opportunities, which could be needed by 35-year-old investor and
65-year-old investor. The investment scope of $1.5 million needs to be evaluated for both the
investors, which could help in generating higher revenue from investment. Furthermore, the
assessment also evaluates different investment portfolios having conservative growth, equity
income, capital appreciation, and income growth. These relevant measurers will be used to
identify the best possible investment option for the organisation, which might generate higher
revenue from investment. Furthermore, two portfolios are mainly prepared in the assessment,
which could help 35-year-old investor and 65-year-old investor to generate higher income
from investment. Lastly, adequate recommendation for the portfolio of both investors is
conducted, which could help them to support their financial obligations and create wealth.
Research:
The research is mainly conducted on investment process and types of funds, which
could be used in forming an adequate portfolio of the organisation. Furthermore, the
evaluation of investment process could help in forming the portfolio for both the client,
which might help in supporting their future expenses. There are different levels of investment
process, which needs to be conducted before the investment to identify relevant process for
generating higher return. Moreover, adequate evaluation of the different funds is also
conducted to understand requirements of the investors.
Relevant identification and investment process are mainly stated as follows.
Idea generation for investment:

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The idea generation is the starting process of investment, where investment
requirement of the investor is evaluated to draft the accurate portfolio. In addition, adequate
quantitative and qualitative screening needs to be conducted by the company, which might
help in identifying the adequate investment opportunity. In addition, the screening process is
also helpful in detecting return and risk that could be provided from an investment. Relevant
findings regarding different level of risk and return provided from stock could be conducted
by companies, which might help in generating higher revenue from investment. Abbasi,
Bahramian and Salami (2016) stated that evaluation of risk and return allows the investor to
detect investment opportunity and generate higher revenue.
Researching different investment option:
After identifying different level of investment opportunity, selected stocks could be
taken into consideration for generating raising the return level. Furthermore, identification of
management strength, balance sheet, earnings, industry structure and ESG revenue is mainly
conducted by the company. In addition, relevant identification of strength and weakness in
investment scope could help in drafting adequate portfolio for supporting investment needs to
be investor. The adequate valuation of fundamental and technical analysis could be
conducted to detect the return and risk involved in operations of investment stock. In this
context, Allen (2015) mentioned that investors by research options could identify stocks,
which has least risk and improve their return generating capacity.
Evaluating the portfolio needed for investment:
The third investment process is mainly the creation of portfolio according to
requirements of the investors. Furthermore, the creation of portfolio directly helps in
detecting risk and return, which could be provided from an investment. Hence, investors in
this process could evaluate the portfolio’s ability to match their risk and return level. The

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analysis conducted on portfolio could help in detecting its investment style such as
conservative growth, equity income, capital appreciation, and income growth. This
identification of the investment style could help in selecting the appropriate portfolio for both
the investor and support their investment requirement.
Conducting portfolio management:
The last stage of the investment process is portfolio management, which helps in
evaluating the performance of portfolio as per the requirement of investors. In addition, the
portfolio management could eventually help in detecting nature of the portfolio to support
investment requirements of investor. The target and return detection could be identified in the
process, where portfolio managers are able to understand financial requirements needed by
investors to manage their portfolio. The last stage is mainly the monitoring process that needs
to be conducted by investors to maintain level of anticipated return from an investment
(Bodie, Kane and Marcus 2014).
Types of funds available for investment, while evaluating returns and risk from
investment are depicted as follows.
Aggressive growth equities:
The aggressive growth equities are stocks, which have high return and risk from
investment. These type of stocks are influenced by volatility of the capital market, which in
turn help in improving returns of investors. Furthermore, the aggressive growth equities
mainly comprise of stocks, which are focused on providing higher returns to their investors.
The use of technical and fundamental indicator allows investor to detect stocks having higher
growth rate on yearly basis. The aggressive growth equity is mainly used by investors to raise
the level of returns in their portfolio. Carlsson et al. (2017) stated that aggressive stock is

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used by investors to raise the level of returns, which could be provided from portfolio
investment.
Long term growth equities:
The second type of investment fund is long term growth equities, which are used by
investors to grow their return and investment capital. This could eventually allow the investor
to generate long term returns from their investment. This type of investment mainly has lower
risk and stable return, as the aim of investor is to create wealth from their investment. This
type of equity fund is mainly utilised by fundamental investors and financial institutions, as
their main focus is to grow wealth and improve profitability. The conservative investor could
use the fund for generating growth in its investment and raise their profitability (Clark 2016).
Growth and income equities:
The growth and income equity funds provide high returns from investment, which
could help in generating adequate level of profitability from investment. The fund mainly
aims in growing portfolio value and generate dividend from investment. This type of stock
provides high reward from investment, as it is influenced directly from capital market.
Moreover, the fund is utilised by investment banker, as they needed to increase their capital
investment and acquire adequate dividends to pay its investors. The stocks having growth
prospect and continued dividend payment is mainly selected in this type of investment, where
risk is relatively high. In this context, Cowell (2016) mentioned that investors having income
and growth prospective mainly need to accommodate risky stocks to support their investment
requirements.
International equities:

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Investments in international equity directly allow investors to increase the returns due
to high growth rate in emerging markets. Investments in India, Malaysia, Indonesia and other
emerging markets could eventually allow foreign investors to generate higher revenue from
the investment. The investments in international equities are mainly conducted by investors
having high capacity to engulf the risk involved in the emerging markets. Therefore,
conservative investor would not opt for the international equity, as they have high risk.
However, investments in international equities are conducted on companies that have high
potential to provide returns, which is estimated by evaluating its performance. On the
contrary, Cunha et al. (2014) argued that investment rules in the national market is relatively
different, which restricts investors to take advantage from the volatile capital market of
emerging countries.
International bond:
International bonds could be utilized by investors for increasing relevant returns, as it
provides a constant coupon payment and fixed principal payment for particular period.
Moreover, the usage of international bond is extremely high, as conservative investors mainly
use investment option in their portfolio. Furthermore, developing countries mainly have
higher interest rate payment on their bonds, as they need foreign direct investment. This
could eventually allow investors to generate higher income in bonds in comparison to bond
payments provided in developed countries. Conservative investors eying for greater returns
with the minimum risk are mainly able to Raise the returns from the portfolio without
increasing their riskv (Dimmock et al. 2015).
Income securities:
Income securities are mainly identified, as mutual funds and other investment
criteria’s, which is conducted by investors for increasing their returns. Selection of relevant

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securities and mutual funds is mainly essential for investors, as they provide both
conservative and high risk investment opportunity. Both conservative and aggressive
investors are keen on investing in income securities, as they provide adequate investment
opportunity for investments. The risk and return profile of income securities are mainly
situated with the investment scope used by investors. Fabozzi, Focardi and Jonas (2016)
depicted that investors select mutual funds after evaluating the overall returns provided from
a particular security over the period of existence.
Analysis:
Analysis for 35-year-old professional:
For 35 year old professional
Particulars Amoun
t
Amount Securities 1 Year previous
returns
Yield
Investment fund 100% $
1,500,00
0
Long-term growth
equities
15% $
225,000
BHP Billiton 14.34% 0.57%
Growth & Income
Equities
35% $
525,000
ANZ Bank
Limited
7.41% 1.76%
International Equities 10% $
150,000
AMMB Holdings
Berhad
17.65% 3.81%
International income 10% $
150,000
MJ11/21 3.62% 3.43%
Income Securities 5% $ GSBE19 5.25% 1.67%

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75,000
Aggressive growth
equities
25% $
375,000
Fortescue Metals
Group
23.84% 8.76%
The above table mainly helps in depicting the overall returns that could be provided
from the portfolio created for 35-year-old professional. The overall portfolio consists of
stocks having higher growth and income capacity, which could help in generating relevant
come. In addition, the portfolio directly provides higher returns from investment, as high
yield stocks are used in drafting the overall portfolio. Companies such as BHP Billiton and
ANZ Bank are used in the portfolio for creating revenue from investments, which could be
generate from dividend yield and stock return. There is more progress identified from the
evaluation of these stocks, which could allow investors to create wealth.
Moreover, international equities and securities are used, as an adequate investment
stream in the portfolio for improving the returns that could be generated from an investor.
Furthermore, the international equities provide high market return and dividend yield in
comparison to the securities listed in the portfolio. Furthermore, aggressive growth equity is
also used in the portfolio to generate higher returns both from stocks and dividend yield. This
is one of the major investment criteria for a 35-year-old professional, who is in raising the
level of returns from its portfolio. This could eventually help in improving the returns that
could be provided by companies in the long run. Growth perspective in international equities
and aggressive growth equity are relatively high, which could allow investors to create
adequate wealth to support their financial obligations.
Analysis for 65-year-old retiree:
For 65 year old retiree

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Particulars Percentag
e
Amount Securities 1 Year previous
returns
Yield
Investment fund 100% $
1,500,00
0
Long-term growth
equities
20% $
300,000
BHP Billiton 14.34% 0.57%
Growth & Income
Equities
5% $
75,000
ANZ Bank
Limited
7.41% 1.76%
International
Equities
10% $
150,000
AMMB Holdings
Berhad
17.65% 3.81%
International
income
35% $
525,000
MJ11/21 3.62% 3.43%
Income Securities 30% $
450,000
GSBE19 5.25% 1.67%
The portfolio created for 65-year-old retiree mainly consists of stocks and bonds
having high growth rate. Being a conservative investor the 65-year-old retiree could
eventually allow international income and income securities to be the highest weighted
investments in the portfolio. The portfolio mainly focuses in creating wealth and reduces any
kind of risk from investment, which in turn could help in generating constant income by the
portfolio. The Focus of the portfolio is mainly on low risk Investments, where growth and
income equities only holds 5% of the portfolio value. This is mainly conducted to ensure
constant returns that will be provided to the 65-year-old retiree after his/her retirement.

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The focus of the portfolio is mainly on bonds and other high growth equities, which
could help in reducing the actual risk from investment and provide a constant return. use of
international income and income securities could eventually allow the old retiree to get
annual coupon payments, which can support his/her financial obligations. however, the
portfolio also focuses on long term growth equities, which could increase portfolio value and
provide higher returns from investment. The above portfolio is mainly designed for a
conservative investor, who is not willing to accumulate high risk in its portfolio.
Recommendation and conclusion:
The overall assessment is mainly focused on providing an adequate investment
opportunity for 35-year-old professional and 65-year-old retiree. The portfolio drafted in the
above cables mainly support all their investment requirements and expenses which the need
to conduct on a daily basis. Investment process and the types of funds required for the
formulation of portfolios are adequately depicted in the assessment, which has helped in
drafting the appropriate portfolio for the investors. The focus of portfolios is mainly on
investment criteria of each investor where adequate adjustment to the portfolio weights are
conducted to support their return requirements. The portfolio created in the assessment
addresses all the requirements of both the investors, which is mainly required to support their
financial obligations. The 35-year-old professional would be focused on acquiring higher
returns by accumulating risk is in his/her portfolio. However, contrary to the actions of 35-
year-old professional, the 65-year-old retiree will mainly focus his/her portfolio on constant
returns, where increment in portfolio risk is not desirable.
Both the portfolios could support investment requirements of the investors from
different age group, which could help in acquiring adequate returns from its investment. The
one year returns of the shares and yield is also provided in the evaluation, which is relatively

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high and allows investor to receive increased returns. The portfolio weights are considered to
be the most appropriate measure for drafting the portfolio, as it helps in supporting the risk
requirements of investors. Therefore, the portfolios could support both 35-year-old
professional and 65-year-old retiree investment requirements.

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Reference and Bibliography:
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investment firms' performance Hierarchical method (AHP)(Case Study: Shasta companies,
Ghadir, Omid, Social Security and National Development). Management, 3(8), pp.1-14.
Allen, D.G., 2015. Investment Management in Boston: A History. University of
Massachusetts Press.
Bodie, Z., Kane, A. and Marcus, A.J., 2014. Investments, 10e. McGraw-Hill Education.
Carlsson Hauff, J., Carlsson Hauff, J., Nilsson, J. and Nilsson, J., 2017. The impact of
country-of-origin cues on consumer investment behavior: The moderating influence of
financial brand strength and investment management style. European Journal of
Marketing, 51(2), pp.349-366.
Clark, G.L., 2016. The components of talent: Company size and financial centres in the
European investment management industry. Regional Studies, 50(1), pp.168-181.
Cowell, F., 2016. Practical Quantitative Investment Management with Derivatives. Springer.
Cunha Dolci, P., Carlos Gastaud Maçada, A. and G. Grant, G., 2014. IT investment
management and information technology portfolio management (ITPM) Brazilian case
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Dimmock, S.G., Gerken, W.C. and Marietta-Westberg, J., 2015. What determines the
allocation of managerial ownership within firms? Evidence from investment management
firms. Journal of Corporate Finance, 30, pp.44-64.

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Fabozzi, F.J., Focardi, S.M. and Jonas, C., 2016. Investment Management: A Science to
Teach or an Art to Learn?(audiobook summary). Research Foundation Publications, 2016(1),
pp.50-62.
Fender, R., Adams, R., Barber, B. and Odean, T., 2016. Gender Diversity in Investment
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