Financial Analysis and Investment Management of Broadridge

This report provides a financial analysis of Broadridge Company, an investment advisory firm specializing in portfolio management and financial services. It examines the application of technical analysis in Broadridge's investment strategies, emphasizing the significance of portfolio management theory within its investment management solutions. The analysis evaluates the risk and return profiles of the company's portfolio, highlighting the effectiveness of its financial investment management solutions. The report covers key concepts like technical analysis, including indicators such as Relative Strength Index, Moving Averages, Stochastic Oscillator, and Bollinger Bands. It also explores the modern portfolio theory and its application in asset allocation and risk management. The report highlights how Broadridge integrates these elements to provide effective investment management services, including financial software and data management, to meet client objectives. The conclusion summarizes the key findings and the effectiveness of Broadridge's approach to investment management.

Running head: FINANCE AND INVESTMENT
Finance and Investment
Name of the Student:
Name of the University:
Author’s Note:
Word Count: 2599

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Executive Summary
The aim of the project is to conduct a financial analysis on the Broadridge Company an
investment advisory company that specializes in portfolio management and providing financial
services for the company. The assignment highlight about the various usage of the technical
analysis and the application of the same in the prospect of Investment Strategies applied by the
Investment Management Solution of Broadridge. The importance of the portfolio management
theory and the importance of the same in the investment management solution were some of the
factors evaluated. Evaluation of the risk and return of the portfolio and the improvement of the
same were some of the effectiveness of the financial investment management solutions provided.

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Table of Contents
Introduction......................................................................................................................................5
Discussion........................................................................................................................................6
Concept of Technical Analysis....................................................................................................6
Portfolio Management Theory...................................................................................................10
Effective Investment Management............................................................................................11
Risk and Return.........................................................................................................................13
Conclusion.....................................................................................................................................14
Reference.......................................................................................................................................14

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Introduction
Investment Management refers to the management of the assets and investment portfolio
of an institution or a client and deciding upon the activities of the portfolio such as buying and
selling of assets depending upon the market scenario and macro-economic conditions of the
firms. The operations of the portfolio is done in order to meet the specified goals of the
institution or the client for whom the portfolio management services are conducted. Investment
management is performed with the help of several kind of financial strategies that are deployed
in order to ensure that the portfolio earns better in terms of return and outperform the benchmark
return (Dimmock, Gerken and Marietta-Westberg 2015).
The Broadbridge Company operating in the portfolio management services and financial
services sector manages and guides the clients about the various kinds of operating financial
software’s and products. The Company incorporates the usage of the technical software’s and
other hi-tech software is for managing and incorporating the various kinds of financial services,
which can guide the clients on the investing and the financing decisions (Abdullateef et al.
2018). There are several factors and other investment characteristics that should be incorporated
for making better financial decisions. Providing Investment Management solutions, which
incorporate the various components of the financial services from portfolio management, data
management, investors risk and return preferences are some of the characteristics, which is
incorporated in the model for providing better financial decisions. The Company modular suite
of investment model combines the reporting and the analytics as a separate solution for the
integrated problems provided. Effective and timely solutions for the factors incorporated are
some of the key benefits of the modular suite (Mattar 2015).

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Discussion
Concept of Technical Analysis
Technical Analysis is one of the form of Investment Strategy where the investment and
the financial evaluation for stocks and financial assets are evaluated for forecasting the price
movement of the asset. It is used as one of the methods for the analysis and screening of stocks
for the possible future movement of the share price in relation to the chart and pattern formed by
each of the stocks. Identifying market opportunity for buying and selling of investment by
evaluating the historical data of the stock in respect to the volume and the price of the stock are
some of the common factor, which are evaluated while assessing the stock. The use of the
behavioral economics along with the market conditions the stock price for the company is
forecasted for the stock in order to exploit mispricing and to trade on stocks, which can provide
better risk and return tradeoff for the investor for investing in stocks.
The application of technical analysis in the investment management services help the
portfolio manager use the same as one of the basic form for implementing the trading strategy for
the portfolio. Technical analysis can be useful for investors and fund manager for identifying
suitable investment asset class for the purpose of investment. There are several charts and
models for conducting technical analysis on a stock. Several Strategies and ideas are implement
using the volume, price and movement of the shares in order to forecast the share price of the
company.
Relative Strength Index: The Relative Strength Index is one of the technical indictor for the
identification of the asset change and movement in the price and the rate of change of the
movement in the share price of the company. It also shows whether the stock is overbought or
oversold depending on the defined parameters of index. The momentum oscillator help us

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identify the volatility and the rate of change in the stock price of the company. The Relative
Strength Index movement is generally across the level of 0-100 where if the index level is below
30 it is defined as oversold and if the index is above 70 then the stock is considered to be
overbought and the relevant trading strategies are then implemented according to the level and
indication of the index.
Figure 1: Relative Strength Index
(Source: Fidelity.com 2018).
Moving Averages: Moving Average is the other form of technical indicator, which is used for
identification of the price trend for the company’s stock price by smoothening the current data of
the share price of the company. Removing the excess volatility from the data of the company
share price i.e. the noise component from the data so that the past trend can be evaluated and
applied for the forecasting of the future price of the share price of the company. The application
of the same for an estimate of the volatility of the share price of the company. The volatility is

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estimated using the past price data of the company share price which is the biggest drawback for
the technical indicator as the past price movement is not supportive for the future movement of
the share price of the company. The applicability of the current macro-economic conditions,
business environments and relevant data are missing in the indicator such that the applicability of
the same in the current economic scenario is not given much importance. There are common
forms of moving day average used such as 200-day moving average 50 days moving average and
other and the same depends on the application and the usage of the data by the portfolio investor
depending on the investing type and the type of investment asset class.
Figure 2: Moving Day Average
(Source: Stockcharts.com 2018).
Stochastic Oscillator:
The technical indicator is a common and widely used technical tool used for identifying the
momentum indicator of a stock. The indicator uses the support level and the resistance level for

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the data of the share price of the company for the identification of the share price of the company
by incorporating the closing price of the company. The only factor, which is common and is
important in the application of the same, is the momentum and the change of the direction of the
stock price for the company. The technical indicator is an important tool which can be used for
the getting an idea of about the reversal trends i.e.., the bullish or the bearish trend reversal in the
stock price of the company so that the relevant investment decision can be made based on the
following evaluation.
Reversal of the Trend and the identification of the overall position and level of the stocks are
some of the common factors that are analyzed and evaluated. The technical indicator also
evaluates the level of the closing price of the high-low range of a stock for a given set of time.
Figure 3: Stochastic Oscillator
(Source: Stockcharts.com 2018).

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Bollinger Bands: The technical indicator identifies and characterizes the price of the stock and
the respective volatility of the stock price of the company. It uses the common formula, which
was founded by the John Bollinger and he developed different band and level for the
implementation and determining the level of the volatility. The stock volatility and the
movement of the prices are the best determinant with the usage of the technical indicator. The
technical indicator can be best applied by the Broadridge financial solutions in there software
and analytical tools so that the investors are well aware about the risk and return characteristic of
the stock.
Figure 4: Bollinger Bands
(Source: Stockcharts.com 2018).

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Portfolio Management Theory
The modern portfolio theory of the investment refers to the investment approach with the
maximization of return and along with the specified level of risk according to the preference of
the investors. The allocation of the investible amount into proper asset class which suits best with
the characteristic of the investors are some of the key feature of the portfolio management
services. The concept of the diversification of the investible amount into different asset classes
are some of the key focus of investment. Allocation of asset to get a diversification benefit and
along with the reduction of risk among the invested asset class thereby maximizing the return of
the portfolio are some of the key focus (Kaiser, El Arbi and Ahlemann 2015).
The application of the portfolio management theory can be applied with determining the
investible amount in the portfolio and the relevant preference of the investor. Identification of the
risk and return preference of the investors and determining the suitable asset class are some of
the key steps followed during the portfolio management services (Szegö 2014). The importance
of portfolio management is applicable, as it will define setting up the goals and objectives of the
investment. The different kind of asset class included in the portfolio are determined according
to the evaluated risk and return characteristic of the asset and the outlook the asset keeping in
view with the general macro-economic conditions and the business conditions under which the
company operates. The return and the risk of the portfolio is calculated as per the risk and return
of the asset class and the weight of each asset class in the portfolio (Bredillet, Tywoniak and
Tootoonchy 2018). The evaluation of the asset class in the portfolio is done after the careful
analysis and evaluation of the same according to the macro economic conditions and the business
environment under which the key fakirs of the asset class may get affected. The concept of the
portfolio management is creating a large pool of investible asset class so that the modified risk

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and return generated form the portfolio is far better and efficient rather than standalone investible
asset class. Portfolio which are diversified and which provides a better risk return tradeoff for the
investor are generally considered to be efficient and generate better return as in the form of
wealth creation for the individual investors (Smith 2015).
Effective Investment Management
Investment Management process refers to the professional and active management of the
various kinds of asset class and securities so that the volatility of the portfolio is reduced or the
asset class and the returns are smoothened for the time (Yao, Chen and Li 2016). Mitigation of
risk and establishment of better risk to return tradeoff is the determination of the effective
management. Creation of an investment portfolio schedule for the investor with the desired goals
and return of the investor according to the suitable investor’s asset class are some of the key
focus (Lan, Moneta and Wermers 2016).
The improvement of the effective investment management in this case by clearly defining
the investor’s preference towards investments and the desired goals and objective of the same.
The company Broadridge provides various kinds of services in the field of investment
management from financial services to data management and risk management are some of the
services of the company (Kahn and Lemmon 2014). The global portfolio management solution
aims at portfolio accounting, risk management and the order of risk for the company to sustain
the risk return tradeoff for the company. The integrated solution provided with the software helps
the investor get the financial services, manage data follow investment accounting are some of the
factors, which will improve the efficiency of the portfolio management and provide efficiency in
the investment management services (HA Davis and Lleo 2015). The improvement of the
effective management in the financial services will improve the operational efficiency of the

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business operations as the integrated solution provided by the software will look after the various
objectives and the goals of the investment criteria. The preference of the effective investment
management should be such so that the different preference of the investors need and preference
towards the risk and return. The efficient frontier of each of the investor and the preference of the
investors towards developing a low volatile portfolio so that return per unit of risk taken by
investor is maximized (Mao and Zhu 2015).
Risk and Return
The risk and return characteristic is some of the important characteristic which every
prospective investor should analyze before assessing the feasibility of the investment (Arjaliès et
al. 2017). The risk and return characteristic of an asset class shows the reward an investor can get
for the amount of risks undertaken by him. The risk and return is said to be correlated i.e., higher
the risk taking ability of the investor the better is the chances for the investor to earn better
returns in the invested asset class. The risk and return involved in managing the asset class varies
from type and nature of investing and the type of funds. Hedge Funds are primarily the best case
where the Sharp Ratio is a crucial factor checked and assessed by the hedge fund managers. The
risk and return evaluation was evaluated for the Broadridge Financial Solution and the NYSE
Composite Index were risk, return, beta and sharp ratio were calculated in order to determine the
feasibility of the investment and the risk return characteristic of the asset class (Mishra 2015).
The historical data for the Broadridge and the benchmark index was taken for the five
year trend period and the relevant risk and return was calculated. The data taken for the analysis
was the five year data of the Broadridge financial solution and the Benchmark Index for
analyzing the risk and return evaluation. The return provided by the Broadridge Company was
superior to the NYSE Composite Benchmark Index (Kuhle and Lin 2018). However, it is crucial