Solved: Portfolio Management Report

Assessment Information This assignment is designed to assess learning outcomes:
1. Apply fundamental analysis to determine the advantages of diversification. 2. Work out an optimal portfolio
3. Evaluate the performance of a portfolio. This assignment is an individual assignment.
  1. This assignment requires you to write a report dealing with the following task
Using at least three shares from DOW JONES Industrial Average (Dow Jones 30) components, create an investment portfolio for an investor seeking a stable return, and another portfolio for an investor who is seeking a high expected return. You are required to use the period January 2017 – December 2017 for your daily data from Tiingo, Quandl, Bloomberg, Yahoo or Google Finance to create your portfolio (state which you are using). The list of potential assets is provided in a separate spreadsheet. 1) Outline in a report the choice you made in creating these portfolios, and discuss the underlying portfolio theory. 2) Compare and contrast the two portfolios in terms of return and risk. Choose appropriate portfolio performance measures to evaluate the two portfolios. 3) Assess how each portfolio performed out of sample in January- February 2018. You may assume that all investors and investments are based in the USA. Criteria for Assessment The marking criteria are indicative to the elements that one might wish to address in your report.1) Selection of assets & portfolio allocation must be clearly stated and justified.2) Modern portfolio theory and relevant concepts should be applied, discussed and explained. 3) Explanation of the criteria used to make such a set of choices should be clearly discussed and their limitations considered.4) Any limitations of the approach you have used to create your portfolio should be considered. 5) Any metrics for measuring the out of sample outcomes for your portfolio Marks will be given for clear explanations of each step and element of your decisions in your report. Justification for each assumption and decision is encouraged. The calculations, code or spreadsheet should be appended to the back of the document. This does not count in the word count. You should look to demonstrate your understanding of the concept of portfolio construction, risk and associated concepts along with the limitations of such an approach.