University of Miami Finance Investment Returns Question

User Generated

fghqlvat876

Economics

University of Miami

Description


The charity client from last week has now requested additional information on your proposed portfolio you recommended. For this report, you will analyze the portfolio returns, select and justify benchmarks, determine portfolio performance attribution, and identify potential risks. You will continue to use the investments you purchased in Stock-Trak to illustrate the portfolio asset strategy and selections.

In your paper,

  • Prepare a table that summarizes the 1-week return of each investment and the portfolio, as well as a whole for your institutional client.
  • Calculate the annualized return for each investment and the portfolio as a whole based on the 1-week return data.
  • Calculate the 1-year historical return for each investment through the current date.
  • Calculate the weighted average 1-year return for the portfolio as a whole based on the weights of each investment and each investment’s 1-year historical return.
  • Explain the 1-year return of the portfolio on an absolute basis relative to the return objective you developed for the investor policy statement (IPS) in your Week 5 Institutional Portfolio Investment Report assignment.
  • Identify benchmarks for each investment.
    • These could be absolute returns or broad market indexes, style indexes, or a combination.
  • Justify the chosen benchmarks based on the following characteristics:
    • Ambiguity
    • Investable
    • Measurable
    • Appropriate
    • Specified in advance
  • Calculate the 1-year return for each chosen benchmark for the same time period used to calculate the 1-year return for each investment.
  • Critique the portfolio using performance attribution.
    • Explain the performance of each asset in comparison to its benchmark.
  • Summarize the performance of the portfolio as determined by the individual assets’ under- or over-performance compared to the benchmarks and their weights within the portfolio.
  • Explain at least two unique risk factors to the portfolio within each of the following categories:
    • Market risk  
    • Credit risk 
    • Liquidity risk  
    • Regulatory risk  
    • Sovereign/political risk  
    • Environmental, social, and governance (ESG) risk


Unformatted Attachment Preview

OpenPosition_2_1_2022 (1) Symbol Description Quantity Currency LastPrice ONEQ Fidelity Nasdaq Composite Index Tracking Stock SPY SPDR S&P 500 B-F-7.7-15052097 B-JPM-6.4-15052038 PricePaid DayChange ProfitLoss MarketValue ProfitLossPercentage 3500 USD 55,91 51,74 0,37 14.595,00 195685 500 USD 452,95 428,6 3,04 12.175,00 226475 5,68 FORD MTR CO DEL 38 USD 1262,49 1315 0 -1.995,38 47974,62 -3,99 JPMORGAN CHASE & CO - 6.4% - May 2038 36 USD 1393,61 1397,6 0 -143,64 50169,96 -0,29 38 USD 1322,55 1319,9 0 100,7 50256,9 0,2 -11,03 117711,03245 -0,01 -0,01 B-MSFT-5.2-01062039 Microsoft Corp - 5.2% - Jun 2039 B-T-2.750-15112023 T-NOTE 2.750% 15-Nov-2023 110 USD 1070,100295 1070,20059 0 B-T-4.375-15052040 T-BOND 4.375% 15-May-2040 110 USD 1009,44593 1009,51686 8,06 0 -7,8 111039,0523 B-WFC-5.375-02112043 Wells Fargo - 5.375% - Nov 2043 40 USD 1251,14 1245,17 0 238,8 50045,6 0,48 B-WMT-5.625-15042041 Wal-Mart Stores Inc - 5.625% - Apr 2041 36 USD 1391,74 1406 0,00 -513,36 50102,64 -1,01 1
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

View attached explanation and answer. Let me know if you have any questions.Hi, I finished. Please check my work and contact me if you have any doubts.

Outline
Performance of the Proposed Portfolio
Weekly Performance of the Proposed Portfolio
Projected Annual Gain Based on Weekly Performance
Historic Performance of the Proposed Portfolio
Weighted Average Returns
Portfolio’s Performance Relative to Investment Policy Statement
Selection of Benchmarks for each Asset Class
Evaluation of Benchmarks
Portfolio Performance vs Benchmark
Risk Factors
Conclusions
References


Performance of the Proposed Portfolio
The stock market has been very volatile these last few days with huge gains and
losses accruing on single days. For example, stocks like PayPal, Meta, and Microsoft
have suffered huge losses (Marcos, 2022), while Amazon’s stock skyrocketed. Even
within the same industry, stocks’ volatility is huge. This is just a reflection of how volatile
the entire market is. Some stocks make huge gains one week and plunge the next. This
is the primary reason why the proposed portfolio included two broad indexed ETFs and
bonds that pay fixed income. Investing on single stocks is risky, since they might yield a
huge gain or a huge loss. Institutional investors must try to reduce risk even.
Weekly Performance of the Proposed Portfolio
The following table summarizes the portfolio’s performance during last week.
Since the FED announced it will start increasing interest rates soon, it is normal that
bond prices decrease. Since bonds were included as long-term investments that
generate fixed income, any price changes will not affect the real objective which is
receiving high coupon payments.
Asset
Indexed ETF:
S&P 500
Indexed ETF:
Nasdaq
Composite
Bond: Ford
Bond: JP Morgan
Bond: Microsoft

Bond: Walmart

Bond: Wells
Fargo
T-Bond
T-Note

Investment Portfolio
Symbol
Price
Price
Weekly
%
paid
Feb. 1
change
change
SPY
$428.60
$452.95
$24.35
5.7%
ONEQ

B-F-7.715052097
B-JPM-6.415052038
B-MSFT5.201062039
B-WMT5.62515042041
B-WFC5.37502112043
B-T-4.37515052040
B-T2.75015112023

$51.74

$55.91

$4.17

8.1%

$1,315.00 $1,262.49

-$52.51

-4.0%

$1,397.60 $1,393.61

-$3.99

-0.3%

$1,319.90 $1,322.55

$2.65

0.2%

$1,406.00 $1,391.74

-$14.26

-1.0%

$1,245.17 $1,251.14

$5.97

0.5%

$1,009.52 $1,009.45

-$0.07

0.0%

$1,070.20 $1,070.10

-$0.10
...


Anonymous
Very useful material for studying!

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags