As an equity portfolio manager, you would like to invest your fund’s money partly in stocks and partly in government bonds. Your investment is expected to be held for at least one year before being rebalanced. For your selection of stocks, you can choose either the UK or US stock exchange market.
Assessment task:
As an equity portfolio manager, you would like to invest your fund’s money partly in stocks and partly in government bonds. Your investment is expected to be held for at least one year before being rebalanced.
For your selection of stocks, you can choose either the UK or US stock exchange market.
You need to conduct an investment analysis and prepare a professional report stating which sectors and stocks you would invest in, your strategic asset allocation, and the key results from your quantitative analysis.
More specifically, you should conduct an analysis of the economy, of the sectors (industry), and then identify three stocks which you think should be bought.
Your analysis will be based on:
⦁ News on the economy, industry and the companies;
⦁ Economic trends;
⦁ Industry analysis (some comparative analysis);
⦁ Fundamental analysis;
⦁ Technical analysis;
⦁ Portfolio formation.
Please be aware that you are expected to follow the following format:
⦁ A professional factsheet of your portfolio, including some statistics of the equity component of your portfolio (some examples from Morningstar will be given to you during the course);
⦁ A macroeconomic analysis with a short professional economic outlook supported by the main economic indicators;
⦁ An industry analysis based on financial leverage, cyclicality, operating leverage and relative strength (sensitivity of the industry to the stage of the economic cycle, not Porter’s analysis);
⦁ A fundamental analysis for all of the companies in the form of: (i) a brief description of the company (one short paragraph); (ii) a summary of the main strengths that support a buy recommendation (2-3 points); (iii) a valuation using the discounted free cash flow model, the dividend valuation model (or residual income model when dividend valuation model not applicable) and price multiples model.
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