Portfolio Management

Running head: PORTFOLIO MANAGEMENT
Portfolio Management
Name of the Student:
Name of the University:
Author’s Note:

1PORTFOLIO MANAGEMENT
Table of Contents
Investment Policy Statement...........................................................................................................2
Return Objectives........................................................................................................................2
Risk Objectives............................................................................................................................2
Standards for Evaluating Portfolio Measures..............................................................................5
Reference.........................................................................................................................................6

2PORTFOLIO MANAGEMENT
Investment Policy Statement
Return Objectives
The return objective of the portfolio will be calculated on the basis of the Internal Rate of
Return Approach. The required return evaluated from the project is around 7.34%. The return on
portfolio was calculated on the basis of the fact that the portfolio return will be generated from
the invested 0.35million. The present value of all future expenses from the year 21 to the year 45
was done which accounted for expenses to be incurred for the rest of 25 years and the monthly
expenses was taken as 40,000 which has an escalation of 4% per year to adjust and reflect
economic reality. The future value of the cash flows was calculated then using the return that
will be generated from the 0.35mn portfolio (Petri, 2018). The amount required for the
evaluation of the future cash expenditure at the present value terms was around 7, 84,545.50. The
same was taken as the required amount at the end of the year 20. The cash flows from the
portfolio was then generated using the 7.34% and the relevant cash flow from the portfolio was
calculated. The relevant per year cash flow generated from the portfolio was then carried forward
using the relevant compounding factor. The amount required per year was around 25691 from
the year1 to year 20. Thus the return objectivity of the client could be meet by investing into
balanced fund approach of investing where the portfolio would have to yield at least 7.34%.
Risk Objectives
The risk objective for the Taylor’s Investment Policy Statement would be moving
towards a more conservative approach of valuation and evaluation of the portfolio. The portfolio
will be delivered according to the constraint risk strategy and the portfolio will be developed on
the basis of conservative fund like the approach and use of the balanced fund in the portfolio