City University EF3320 Finance: Portfolio Management Group Project

This finance portfolio management project focuses on constructing an effective investment portfolio using various stocks and ETFs listed on the Hong Kong exchange. The project analyzes the IShares MSCI Hong Kong ETF (EWH), First Trust Hong Kong AlphaDEX Fund (FHK), and Schwab International Equity ETF (SCHF), along with other companies like Beijing Enterprises Water Group Limited and Kunlun Energy Company Limited. The portfolio construction considers factors such as annualized returns, standard deviation, correlation, and covariance to maximize returns while managing risk. The conclusion highlights that investing solely in IShares MSCI Hong Kong ETF yields the highest Sharpe ratio, making it the most effective ESG investment in this context. Desklib offers a range of similar projects and study resources for students.

Running head: FINANCE PORTFOLIO MANAGEMENT
Finance Portfolio Management
Name of the Student:
Name of the University:
Authors Note:

FINANCE PORTFOLIO MANAGEMENT
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Table of Contents
Question 3:.................................................................................................................................2
1. Stock Selection:......................................................................................................................2
2. Introduction:...........................................................................................................................2
3. Portfolio Construction:...........................................................................................................3
4. Conclusion:............................................................................................................................4
References:.................................................................................................................................5

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Question 3:
1. Stock Selection:
No
.
Stock Selected
1. IShares MSCI Hong Kong ETF(EWH)
2. First Trust Hong Kong AlphaDEX Fund(FHK )
3. Schwab International Equity ETF(SCHF)
4. [Beijing Enterprises Water Group Limited (0371.HK)
5. Brilliance China Automotive Holdings Limited (1114.HK)
6. Beijing Enterprises Holdings Limited (0392.HK)
7. Hang Lung Properties Limited (0101.HK)
8. The Bank of East Asia, Limited (0023.HK)
9. Kunlun Energy Company Limited (0135.HK)
2. Introduction:
The IShares MSCI Hong Kong ETF(EWH), First Trust Hong Kong AlphaDEX
Fund(FHK ), and Schwab International Equity ETF(SCHF) are ETFs, which are listed in the
Hong Kong exchange. In addition, the ETF investment can adequately raise the level of
income from investment, while reducing the total risk. Furthermore, Beijing Enterprises
Water Group Limited (0371.HK) has been listed in Hong Kong, while providing water
services and environmental protection services in Mainland China. Brilliance China
Automotive Holdings Limited is an organisation, which aims in manufacturing minibuses,
automobile components in China. Beijing Enterprises Holdings Limited has been formed

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with eight different units of assets, which operate in China, while having a diversified
business activity. Hang Lung Properties Limited operates in Hong Kong, where it is a major
real estate organisations in the country listed in Hong Kong exchange. The Bank of East
Asia, Limited is one of the 6th largest banks in Hong Kong, which has been licensed to
conduct adequate operations. Lastly, Kunlun Energy Company Limited has been operating in
production of crude oil, and natural gas in China, Oman, Peru, Thailand, Azerbaijan and
Indonesia (Finance.yahoo.com, 2018).
3. Portfolio Construction:
Weight
EWH FHK SCHF O371 1114 O392 O101 O023 O135 Total
0.12 0.09 0.03 0.17 0.24 0.09 0.07 0.05 0.13 1.00
Particular Value
E(P) -1.12%
Var(P) 5.28%
SD 0.229760309
Hong Kong Exchange Fund
Note
Value
Risk free return 0.025
Sharpe ratio -15.75%

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The portfolio has been created by using the annualised and average returns and
standard deviation of the stock. In addition, the correlation and covariance is also used in
determining the portfolio values that needs to be conducted in the ESG led portfolio for
generating high level of returns from investment (Hoesli & MacGregor, 2014).
4. Conclusion:
The portfolio relevantly consists of one stock IShares MSCI Hong Kong ETF, which
can generate high level of income from investment. The other forms of investment are not
taken into consideration from the other eight stocks, as the Sharpe ratio will not generate high
value. Hence, the ESG investment will relevant generate high returns, when the whole
investment is conducted in IShares MSCI Hong Kong ETF.

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References:
Finance.yahoo.com. (2018). Finance.yahoo.com. Retrieved 24 November 2018, from
https://finance.yahoo.com/
Hoesli, M., & MacGregor, B. D. (2014). Property investment: principles and practice of
portfolio management. Routledge.