CASE STUDIES IN FINANCE (FIN3CSF)
金融案例研究代写 You are currently a senior private client adviser with Bell Potter Securities Limited which provides investment advice and
CASE STUDY 1 – INVESTMENT STRATEGY AND PORTFOLIO DEVELOPMENT 金融案例研究代写
You are currently a senior private client adviser with Bell Potter Securities Limited which provides investment advice and stockbroking and portfolio management services primarily to retail clients and has a close strategic alliance with the UBS investment banking group. Your role involves advising high net-worth individual or family clients who pay advisory and service fees to your firm in return for the provision of initial investment planning and evaluation services, ongoing investment and related advice, research and company information access and the development and management of investment strategies and portfolios on their behalf.
You have just been assigned a new client who is the founder of an innovative and successful online freelance services business and is looking to diversify some of their personal asset portfolio into financial markets. They are looking to initially invest A$7.5 million in a portfolio of securities which will likely be used for charitable or philanthropic pursuits in the future. They have approached Bell Potter Securities Limited for investment advice and to act as their stockbroker and portfolio manager in developing and managing this investment portfolio in the future.
The client has provided the following brief and guidelines associated with the desired investment strategy requirements for the portfolio:
Risk profile 金融案例研究代写
Above-average risk tolerance associated with authorised investment alternatives including individual equity securities (domestic and overseas exchanges), listed investment companies (LICs) or exchange-traded products (ETPs), equity market option securities or futures contracts, currency forward contracts, cash and digital currency, but with protection against potential downward market and adverse exchange rate movements.
The client would prefer the investment strategy and associated portfolio to be focused on capital growth but is open to future reinvestment of dividend or other income distributions.
Minimum 10-year investment (holding) period, but with active management over the investment period to maximise portfolio value.
Country focuses 金融案例研究代写
At least 50% of the available funds are to be invested in companies in the Australian-based S&P/ASX 200 index and/or in securities providing exposure to the Australian Securities Exchange and at least 20% of the available funds are to be invested in companies included in the US-based Nasdaq 100 index and/or in securities providing exposure to the Nasdaq Stock Exchange.
Share component and diversification
At least 65% of the total portfolio funds are to be invested in individual company equity (share) securities. To ensure a prudent level of diversification, no more than 10% of the total available funds are to be invested in any one individual company or security (excluding cash, digital currency or hedging components).
Business style focus
Based on the changing corporate landscape and trends in business transformation and innovation, at least 15% of the total available funds are to be invested in companies or securities providing exposure to disruptive business platforms.
Industry focus 金融案例研究代写
Based on the client’s background, at least 10% of the total available funds are to be invested in labour hire, employment or digital (online) services businesses.
Indirect equity investment
Some portfolio investment in Australian or international sharemarkets is allowable using holdings in LICs or ETPs, but this investment component is to be limited to a maximum of 30% of the total available funds. (A list and price history for preferred LIC and ETP investment options is provided in the spreadsheet document forwarded by the client)
Short selling of direct equity and LIC/ETP securities is permissible if it is consistent with the proposed investment strategy, although sufficient cash or similar reserves are required to be held to meet position closing out (re-purchasing) requirements.
Some downside risk protection for the portfolio against adverse equity market movements is desired through hedging using derivative securities (such as market index futures or options) of a minimum of 50% of the Australian market-focused investment component (including direct equity, LIC and ETP investments) value.
Preferred derivative securities 金融案例研究代写
Approved equity index futures contracts and option securities to be used for any speculation or hedging positions are:
1.Preferred SPI futures contract: September 2021 SPI 200 Futures Contract with a closing price of 6,695 on 22/02/21 (Contract value represents A$25 SPI 200 value). Each contract will require creation of a $10,000 settlement account to meet margin movements.
2.Preferred equity market call option: S&P/ASX 200 Index (A$10 S&P/ASX 200 index value) call expiring on September 16th 2021 with an exercise price of 6,700 (ASX code: XJOFD7). The premium for this call option is 325.10 points on 22/02/21.
3.Preferred equity market put option: S&P/ASX 200 Index (A$10 S&P/ASX 200 index value) put expiring on September 16th 2021 with an exercise price of 6,700 (ASX code: XJOFE7). The premium for this put option is 413.20 points on 22/02/21.
Given the recent increasing trend in Australian dollar exchange rates, hedging of 100% of the value of the US stockmarket security exposure is required. This can be achieved using equity securities, LICs/ETPs or currency forward contracts. The client’s bank, ANZ
Banking Group, is prepared to initially enter into a currency forward contract with a 1-year forward margin of -120 basis points based on the AUD/USD exchange rate of 0.7888 (AUD$1.00 = USD$0.7888) on 22/02/21. The client is required to provide a 1.75% security collateral deposit based on the total forward contract value.
A maximum of 20% of the total funds are to be invested in cash, which can be invested at the 180-day Dealer bill rate of 0.200% per annum as at 22/02/21. The client has an existing digital currency wallet and is also willing for any cash component of the portfolio to alternatively be held in Bitcoin. One Bitcoin is worth US$54,141.90 on 22/02/21.
The performance of the recommended investment portfolio proposed will be benchmarked to the performance of the S&P/ASX 200 price index, which has a closing value of 6,780.90 on 22/02/21.
This case study requires the preparation of an investment portfolio proposal document to be provided to the client, which should include the following information:
A brief and informative summary of the current investment environment, both in Australia and internationally and linking with the client’s requirements, and identification of any key economic or financial indicators or events impacting on the near-term investment environment.
Presentation of the underlying investment philosophy and portfolio strategy proposed for the client, including consistency of alignment with the indicated requirements of the client. Explanation and justification for this strategy, individually or relative to alternatives, should be provided, which could include backtesting or other quantitative and qualitative analysis.
A description, in table or similar format, of the recommended portfolio components, indicating the selected assets / securities and the magnitudes of investment in each.
If required, a brief explanation of how each of the recommended investment components aligns with the overall investment strategy.
Assume this portfolio construction and report preparation
Students completing the subject in face-to-face mode can complete the investment strategy development and portfolio construction requirements using data accessed from the Bloomberg terminals in the Finance Trading Room, whereas students undertaking the subject in online mode should use the spreadsheet file provided with the case study information to complete the investment strategy development and portfolio construction requirements.
This is an individual case study task and contributes 25% to the overall assessment for the subject. The suggested word limit, excluding any figures, calculations and the portfolio presentation, is 1,000-1,500 words.