Portfolio Management - Analysis of Stocks

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

PORTFOLIO MANAGEMENT
Executive Summary:
Portfolio management is a skill which is demonstrated by managing the portfolio in different
style, employing different strategies and achieving different results. The styles can be active –
passive, value vs. growth, large cap vs. small cap and many more styles. The strategies which
can be employed can be both buy and hold, or short and recover and many other strategies
which are employed by the portfolio manager depending on his economic belief. Thus in this
report three portfolio are created and managed using different styles of portfolio
management. The portfolio are created using equal weights provided to each holding,
however the initial value of the portfolio differing for each of the portfolio. The portfolio are
held for a period of 8 weeks, with weekly review of the portfolio. Thus the portfolio creation,
specification and performance are compared after the end of 8 weeks, which is provided
below in the following report.

PORTFOLIO MANAGEMENT
Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Investment Policy Statement:.................................................................................................3
Investment Policy Statement for Portfolio P1:...................................................................4
Investment Policy Statement for Portfolio P2:...................................................................5
Investment Policy Statement for Portfolio P3:...................................................................5
Portfolio Management Style:.................................................................................................6
Portfolio Stock Selection and Industry Analysis:..................................................................7
Stock and Industry of the Portfolio P1:..............................................................................7
Stock and Industry of the Portfolio P2:..............................................................................8
Stock and Industry of the Portfolio P:................................................................................8
Initial and End Value of the Portfolio:...................................................................................9
Portfolio Strategy and Performance:....................................................................................10
Performance of Portfolio P1:...........................................................................................10
Performance of Portfolio P2:...........................................................................................11
Performance of Portfolio P3:...........................................................................................12
Conclusion:..............................................................................................................................12

PORTFOLIO MANAGEMENT
Introduction:
The following report is the analysis of three portfolio’s consisting of 4 stocks each in
each portfolio. The portfolio management process is a skill which requires the manager to
generate returns which beat the benchmark. However, sometimes in order to generate higher
returns the portfolio is rebalanced frequently, thus leads to an increase in the transaction cost
and taxes. Thus, reducing the returns on the portfolio on an overall basis. Thus the portfolio
which is managed actively by the portfolio manager in order to generate higher returns is
called actively managed portfolio. However, sometimes investors tend to generate returns
which is equal to the index or benchmark return. Thus the portfolio manager need not beat
the benchmark, but generate returns which is equal to the benchmark index or slightly
greater. Thus the manager need not rebalance the portfolio so frequently and hence can be
expected to mimic the benchmark (Buston, 2016).
Thus the aim of this report is to highlight the actions which is taken by an active fund
manager to a passive fund manager. The portfolio will be held for a period of 8 weeks and the
prices of the holding will be recorded on a weekly basis. Thus the returns which is generated
by the three portfolio along with their investment style will be covered in the report.
Discussion:
Investment Policy Statement:
The investment policy statement is a document which is prepared by the portfolio
manager before the starting of the investment. It clarifies all the risk and return objective of
the clients and highlights the special consideration which is pertaining to the client. It defines
the method of execution which can be taken by the portfolio manager when undertaking
investments. It specifies the risk which can be taken by the client with respect to the portfolio,