Portfolio Management College Assignment Project
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
1.This assignment requires to devise an equity market investment strategy and to use real past data for backtesting this strategy. The strategy can be in any European equity market(s) and can involve an international portfolio. The strategy must be based on fundamental analysis not technical analysis. The backtesting must be implemented in Excel and the electronic file will be part of the submission. In terms of structuring the written assignment, you should envisage a scenario of writing a report to make recommendations to a senior portfolio manager.
2.The written document has a word limit of 1,000 words (+/- 10%).
It must comprise:
(i) a very brief introduction;
(ii) a detailed explanation of the rationale for the strategy;
(iii) an analysis of the results of the backtesting;
(iv) a focused conclusion.3.You are free to choose any equity investment strategy, but some possible topical approaches to frame the portfolio formation might involve environmental, social and governance (ESG) factors, financial technology, or international politics and trade.
4.In terms of quantitative techniques, you should utilize studies in the ‘Investment’. For example, arithmetic and logarithmic returns, portfolio returns, standard deviation of returns and covariance of returns. You will be applying these techniques on past data i.e. not using expected returns. You will need to decide on the data frequency (i.e. daily, weekly or monthly returns), which will influence your calculations of risk (i.e. standard deviation or another measure such as CAPM beta). You should then proceed to use performance measurement techniques discussed in ‘Portfolio Management’.
5.You will need to decide on the number of assets in the portfolio and to identify an appropriate benchmark of past performance. In ‘Portfolio Management’, we will discuss benchmarks and some methods of performance measurement. Of course, you should refer to textbook(s) and there is a vast amount of online resources on these aspects.
6.On the previous tips, the briefing refers to European markets. This is partly because you have access to the online databases named Amadeus and Orbis BankFocus which can potentially provide suitable data. However, if you prefer to study non-European markets for this assignment, that is permitted but you will need to collect the data from different sources e.g. free online databases. If you take the latter approach, you must explain this in detail within your report.
7.The data period must be *** (you must include 2020 due to the global financial market turbulence of last year). Your Excel file will be part of the submission hence the raw data, the data preparation and the calculations are part of the assessment.
8.This assignment provides an opportunity to engage with real-world issues in portfolio management and to apply concepts from all kinds of textbooks. It enables you to improve your skills in data collection, data analysis and Excel.
9.The assignment will be assessed on the following criteria:
Ability to devise a plausible equity investment strategy;
Ability to collect real-world data and to implement analysis in Excel;
Quality of the interpretation of your research;
Ability to convey your analysis in a concise and well-presented report, including tables and graphs.10.Use 12-point font and 1.5 line spacing. Ensure full acknowledgement of your sources of information and data. Your reference list should include at least five academic journal articles. If desired, an appendix can be used to present the most technical details. The word count (excluding the reference list and appendix) must be stated on the cover page.
11.Additional advice:
1). Here are some key elements in the approach to the assignment.
(i) choosing an investment strategy i.e. a basis on which to select which assets will be in your portfolio. You can think of it this way: there are thousands of stocks/funds available for an investor to choose, so your task is to define criteria with which to choose a subset of stocks/funds. To make the assignment work realistic (in terms of your time and effort), I am suggesting that you choose a small number of assets. This means that you will not necessarily have a well diversified portfolio, but that is not part of this particular assessment task. To incorporate the diversification concept, you could choose a set of funds (e.g. mutual funds or ETFs) rather than a set of stocks.
(ii) being able to provide a rationale for the choice of investment strategy.
(iii) deciding on which assets will enter your portfolio (recommend between 5 and 10 assets; a fund counts as one asset).
(iv) engage in an academic literature review (you will need at least five articles to be cited in your final assignment document).
(v) consider what data sources you will use.
(vi) calculate returns (use the information from ‘Investment’). Start with the stock returns then combine them to calculate your portfolio return. ‘Investment’ refers to expected returns but here you are using past data hence they are actual returns (essentially the same formulae). It is preferable to use logarithmic returns at the monthly (or weekly or daily) level. When you take averages across multiple time periods, it is more technically correct to be using the log return rather than the arithmetic return.
(vii) use methods covered in the ‘Performance Measurement’ lecture topic to consider your portfolio’s performance. You will need to choose a benchmark index and collect data for this benchmark and for a risk-free rate (e.g. Treasury bill or bank base rate). Start with the simplest approach, which is the Sharpe ratio. You can also consider using the information ratio. The main calculation is for the sample period as a whole. However, your analysis can be extended by also calculating the ratios separately for each of the ten years in your sample. Also, potentially for the first half and second half of the sample period. An extension would be to isolate the impact of 2020 on your results.
(viii) To extend the work and to be more ambitious: You then proceed to calculate other measures, for example the Treynor ratio and the Jensen measure. For the portfolio beta, you can utilise the covariance function in Excel. To calculate measures for the benchmark, you have two possibilities: (i) assume that your benchmark portfolio is ‘the market’ hence it has a beta of one; (ii) have two data series i.e. your chosen benchmark plus a broader market index. In the latter case, you will have a benchmark with a beta not equal to one. (ix) Further ambition can be reflected in additional comparisons and reflections based on academic journal articles.2). The risk-free rate
For calculating the excess portfolio returns and excess benchmark returns, you need to collect the risk-free rate data. This can be the central bank base rate or the Treasury bill rate. Central bank websites are typically the easiest source to use.
For the UK, here is the bank base rate data: https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp Crucially, this is annual data. You will need to adjust these annual rates of return to a different frequency, i.e. most of you will be using monthly or daily frequency for your portfolio and benchmark returns. For the last 10 years, many developed countries’ base rates have been very low (e.g. for the UK, at the time of writing this document it is 0.1%, the lowest ever rate). Therefore, when you convert the annual rate to monthly, it will be a very small value (and if you convert to daily, it will be miniscule). If you are using Treasury bills, the 3-month rate or 1-month rate are the most appropriate. One possible source:
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=billrates You need to download the time series i.e. you should be using a different rate for each year in your sample period. Remember to adjust annual rates to the frequency of your data e.g. monthly. Also, if a particular observation of the risk-free rate is quoted as (e.g.) 1.5%, you need to convert this to 0.015 before adjusting it to the frequency of your data e.g. a simple conversion would be 0.015 / 12 (for monthly data).
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
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