Dendy Park Tennis Club Investment Portfolio: A Management Report

This report provides a comprehensive analysis of investment management strategies for Dendy Park Tennis Club, focusing on the formulation of an investment policy statement and capital allocation strategies across equity, debt, and money market securities. The report outlines investment constraints, including liquidity needs, risk tolerance, return requirements, and time horizon, while also considering tax implications and legal regulations. It details the allocation of a $500,000 investment portfolio, with 40% allocated to equity, 40% to debt, and 20% to money market securities, based on economic conditions and government policies. The report also evaluates portfolio performance on a weekly basis from January to February 2019, comparing it against the ASX all ordinaries benchmark, and emphasizes the importance of diversification to mitigate systematic and unsystematic risks.

Investment Management
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Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
PART 2............................................................................................................................................5
PART 3............................................................................................................................................6
PART 4............................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10
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INTRODUCTION
Investment management is one of the best ways to manage company’s assets of various
securities such as equity, share, bonds and other assets. These are needed for the purpose of
meeting specific investment aim for creating wealth of the investors. It has been seen that any
kind of investment is associated with some kind of risk and return. The term risk is basically
examined by the investor according their portfolios. In order to manage their portfolios, investors
must be able to select their best securities then after decide the total return they are getting in
coming time (Chance and Brooks, 2015).
This project report aimed at provided portfolio management of Dendy Park Tennis club.
This report is further categories into four equal parts such as formulation of investment policy
statement. Apart from this, capital allocation strategy in equity and other securities is also
discussed effectively in this project. Along with that it consists of evaluation which is done on
weekly basis of the company is covered under this report.
PART 1
This particular section is all about the investment policy statement which is prepared in draft
among a person that is going to manage the portfolio as well as a customer that can present
common rules for the controller. As per this statement investment objective and aims of a
customer that can clarify the overall strategies which is under the control of manager should be
employing to attain their overall motive from their investment (Witt, Brooke and Buckley, 2013).
The budget would be decided through the management of Dendy Park Club with the total
investment portfolio of $500000. The detail of statement is mentioned below:
Dendy Park Tennis Club
Investment Policy Statement
Purpose:
This particular investment policy statement is based on furnish the design in accordance
to the investment aim, polices and regulation of Dendy Park Tennis Club in Australia. This aim
of investing is done in such a way to utilize the club’s capital in the shares, debts and money
market so that it would increase the profit for the company (Chandra, 2017). The increase in the
net value of the shareholder by the diversification of asset which would be held by the club. The
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second copy of this statement will be furnished to every investment manager of the concern
organisation.
Investment Constraints:
The investment aspects of this program consists of certain areas such as:
Liquidity needs: In accordance with the Dendy Park Tennis club is considered as Leasehold
tennis services with specific limited financial pockets to make expansion of their facilities such
as renovation and other areas. The liquidity is terms as how comfortable it is to cash out their
various investments. At the time of making decision for any kind of investment, Dendy park
club has to make decision to increase their debt by keeping the amount with the amount of $
500,000 as investment for the portfolio (Ding, Guariglia and Knight, 2013).
Risk tolerance: It is related with a well organise diversified investment portfolio is that
is having a low risk and have an effective combination of the securities and their coefficient of
the give covariance. It means management of Dendy Park Tennis club is having evaluation of
risk tolerance level and accordingly prepared their portfolio.
Return Requirements: It is said to be one of the crucial aspect of any portfolio
management. In effective of investment is all time valuable for taking into account about the
return requirement of the investor. The assets would be part of the investment with the prudence
to incur a certain interest amount of at least 5% to attain set goal of tennis club.
Time horizon: The basic aspects of the club are to expect to operate on continuous basis.
In order to make any other investment, it is crucial to decide the time horizon. Under this
particular portfolio of 5-year time in shares and debenture as well as 3 months’ time horizon it
taken for the capital market securities (Laudon and Laudon, 2016).
Tax consideration: In respect to Dendy Park Tennis club would be taken into account as
tax aspects with the income and capital profit from the investments. Thus, tax for the club is
remaining exempted as a society services under Australian Taxation office regulation which
will be mentioned under the government.
Legal as well as regulatory accounts: In relation to Dendy Park Tennis, they need to
follow a process policy more accurately in respect to protect their assets and their members.
Every law and norms are joined in making portfolio investment decision. With the proper
decision making for Club it is essential to avoid certain option which can prove to socially
unethical for their big reputation (Soboleva and Parshutina, 2016).
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Unique requirements and circumstance: It may be done with proper implementation of
unique requirement for their investing portfolios such as to withdraw maximum of more than
5% of their investment profit in case of occurrence of unforeseen situations.
Diversification: It is essential for Dendy Park club to build a well effective portfolio. It
must be related with a equity elements of the companies of various sectors such as debt, fixed
rate of interest and other market securities. It will make the portfolios more diversify and assist
to reduce the both unsystematic as well as systematic risk up to an extent. It must be ready to be
available for investment for the stakeholder of the Tennis club at any period (Duffie and
Singleton, 2012).
PART 2
It is essential for the Dendy Park Tennis club is to taken into account the investment of
$500,000. For this purpose this portfolio manager would have to make decision of how to make
investment of the amount in equity, debt and other market securities. It can be done through
current and upcoming economic aspects, government plans and financial situation related with
the portfolio of the Tennis club in proper position (Stoughton, Wu and Zechner, 2011).
Henceforth, there are certain condition that is kept always in decide the portfolio mix:
Present and future economic condition: At the time of considering the portfolio as an
investor, it must be analyse the situation such as effect occurs because of inflation. Thus, the
economy is growing with the recession to retain or inflation (Fabozzi and Markowitz, 2011).
They would have to adjust their overall investment planning.
Government rules and policies: It is the responsibility of the government to make policies
which can change the social attitude in the business situation such as political balance, interest
rate, regulation and other rates. In case of increase in the rate of interest then the borrowing cost
would also be increase then chance of attracting more investment is more.
Financial situation: This seems to be valuable for Dendy Park Tennis club to determine
their funds and financial planning must be related with the effects of interest rate as well as
exchange rate of the economy (Fernandes, 2011). During the designing of their policies for the
investment mix, it would have to decide the classification of the securities such as equity shares,
bonds and market securities. With simply planning in investment among securities is remain
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undervalued securities area buying and overvalued assets can be sold accurately. The evaluation
consists of below mentioned aspects:
 Balance in proper among fixed interest equities and bonds.
 High rate of divided payout industries are expected to earn high revenue growth as per
the investors (Guo and Seaman, 2011).
 Balance capital earning as well as income tax payable norms from the investment.
 Transaction must be balance in accordance with the rapid changes in the government
plans.
In relation to the equity which is having maximum chance of return would also have
maximum amount of risk other than the debt. Henceforth, Dendy Tennis club will have to make
decision for balancing among each other. After taking into account the investment decision, it is
perfect portfolio mix is to decide so that proper decision among risk and return can be analyse
(MacLean, Thorp and Ziemba, 2011). It will have the investing about 40% in equity; debt is 40%
and balance of 20% in market securities so that chances of risk can be avoided out of the
investment portfolio. The value of investment is mentioned below:
Particular Amount
Value of share $500,000*40/100= $200,000.
Debt $500,000*40/100= $200,000.
Money market securities $500,000*20/100= $100,000.
PART 3
In accordance with the selection of correct portfolio can results in attaining maximum
benefits in future time. These are more reliable underline assets which can assist all kind of
investors to determine their most appropriate option at the time of making decision in relation to
their suggested investment. The main reason for choosing investment under shares is to get more
return value of earning in upcoming time (Merna and Al-Thani, 2011). Henceforth, bonds and
other market option can also be more reliable tool that can create maximum return for the
investors. It is correct decision from an investment prospective to select right option in order to
get long term sustainability.
Capital allocation: It is an essential system of financial resources distribution in different
sorts of portfolios. This will assist in attaining their goal in optimising capital allocation so the
wealth can be created to the shareholders (Ozik and Sadka, 2012).
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Diversified portfolio consists of a wide range of securities that is having weight-age. It has
been seen that a well organise portfolio would be design after making understanding of
systematic risk as well as unsystematic risk.
Systematic risk: This seems to be more variable in return of any securities which can cause
through economy modification or market change (Parker, 2012). All the securities in the
portfolio get affected through such changes. The best way to manage the risk is by considering
beta value.
Unsystematic risk: It refers as that risk which is having unique aspect to the company
which is related with a particular company. It is basically related with the company’s securities
that can eliminated through combing of both negative correlative aspects.
Reduction of portfolio risk by Diversification: In order to determine the implication of
covariance on portfolio risk for the purpose of two securities (Brigham and Houston, 2012).
Some of them are mentioned below:
 Perfect positive correlated.
 Perfectly negative relation
 Return on independent and uncorrelated
From the above portfolio manager of Dendy Park Tennis club can take benefits of
diversification that will make investment under the below mentioned sectors:
Equity / Debt /
Money Market
Securities
Company Name Sector Amount Invested
($)
Purchase Price
per share ($)
Equity The a2 Milk
Company (A2M)
Milk sector 100000 10.32
Equity Adelaide
Brighton (ABC)
Real estate sector 50000 4.27
Equity AGL Energy
Limited (AGL)
Energy Sector 50000 20.6
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From the above table, it has been related with the mix investment in equity share of
various sectors that is related with real estate, energy and milk sector.
PART 4
It is a timeline that is showing the above steps which are provided below in respect with the
benchmark portfolio of ASX all ordinaries for the objective of making comparison among the
performance of the market in accordance with the portfolio. This particular report is consisting of
all kind of investment portfolio under the name of Dendy Park Tennis club in which the first
investment is made in starting of the month in December, 2018 with 40% in shares, another one
is 40% in debenture and rest 20% is made in market securities. Performance of the investment
portfolio is being made by Dendy Park Tennis club that can help to measure on weekly basis
from January to February 2019 (Pompian, 2011).
WEEK The a2 Milk Company
(A2M)
Adelaide Brighton
(ABC)
AGL Energy Limited
(AGL)
Price per share ($) Price per share ($) Price per share ($)
1-7 January 10.48 4.28 20.61
8-14 January 10.52 4.25 20.58
15-21 January 10.6 4.23 20.65
22-28 January 10.58 4.26 20.49
29 January – 4
February
10.44 4.31 20.55
5-11 February 10.11 4.32 20.69
12-18 February 9.81 4.28 20.88
19-25 February 9.45 4.27 21.2
25 February -3 March 8.88 4.19 21.11
Evaluation is done on the weekly performance of Equity stocks that are selected for
Keysborough’s Portfolio investment: The benchmarks is considered as the overall analysis of the
performance of following stocks that are related with ASX all ordinaries:
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Stock Code: API
Stock Name: AGL Energy Limited
AGL Energy Limited is said to be a public limited company that is associated with
generation and retailing of electricity and gas for residential and commercial use. It also deal in
various segment which are helpful for incurring maximum revenue during the period of time.
Chart showing The a2 Milk Company (A2M) shares: -
Chart of Adelaide Brighton (ABC) shares:
Performance of AGL Energy Limited (AGL) shares by the help of chart:
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1-7 January
8-14 January
15-21 January
22-28 January
29 January – 4 February
5-11 February
9.8
9.9
10
10.1
10.2
10.3
10.4
10.5
10.6
1-7 January
8-14 January
15-21 January
22-28 January
29 January – 4 February
5-11 February
9.8
9.9
10
10.1
10.2
10.3
10.4
10.5
10.6
1-7 January
8-14 January
15-21 January
22-28 January
29 January – 4 February
5-11 February
20.35
20.4
20.45
20.5
20.55
20.6
20.65
20.7

From the above table and charts, it has been seen that Dendy Park Tennis club is having a
constant performance in every shares in their portfolio. Because of a well-diversified portfolio
chances of reduction in price of A2M in compensate of Securities as well as debt (Reilly and
Brown, 2011).
CONCLUSION
From the above project report, it has been concluded that making investment is more tough
decision for any investors. It is essential for the shareholder to their process that includes proper
selection, construction and weights of the portfolio. If a portfolio is well-diversified the chances
of getting more return can be more in coming period of time.
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REFERENCES
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Learning.
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(RLE Tourism). Routledge.
Chandra, P., 2017. Investment analysis and portfolio management. McGraw-Hill Education.
Ding, S., Guariglia, A. and Knight, J., 2013. Investment and financing constraints in China: does
working capital management make a difference? Journal of Banking & Finance. 37(5) pp.1490-
1507.
Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education
India.
Duffie, D. and Singleton, K.J., 2012. Credit risk: pricing, measurement, and management.
Princeton University Press.
Fabozzi, F.J. and Markowitz, H.M. eds., 2011. The theory and practice of investment
management: Asset Allocation, Valuation, Portfolio Construction, and Strategies (Vol. 198).
John Wiley & Sons.
Fernandes, N., 2011. Sovereign wealth funds: Investment choices and implications around the
world.
Guo, Y. and Seaman, C., 2011, May. A portfolio approach to technical debt management.
In Proceedings of the 2nd Workshop on Managing Technical Debt (pp. 31-34). ACM.
MacLean, L.C. Thorp, E.O. and Ziemba, W.T., 2011. The Kelly capital growth investment
criterion: Theory and practice (Vol. 3). world scientific.
Merna, T. and Al-Thani, F.F., 2011. Corporate risk management. John Wiley & Sons.
Ozik, G. and Sadka, R., 2012. Media and investment management.
Parker, D., 2012. Global real estate investment trusts: People, process and management. John
Wiley & Sons.
Brigham, E.F. and Houston, J.F., 2012. Fundamentals of financial management. Cengage
Learning.
Pompian, M.M., 2011. Behavioral finance and wealth management: how to build investment
strategies that account for investor biases (Vol. 667). John Wiley & Sons.
Reilly, F.K. and Brown, K.C., 2011. Investment analysis and portfolio management. Cengage
Learning.
Stoughton, N.M., Wu, Y. and Zechner, J., 2011. Intermediated investment management. The
Journal of Finance. 66(3) pp.947-980.
Soboleva, Y.P. and Parshutina, I.G., 2016. Management of investment attractiveness of the
region by improving company strategic planning. Indian Journal of Science and
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