As per 22nd of February 2021 your initial investment is 1,000,000, and you can invest in any of the following assets: individual equities, corporate bonds, or any tradable currency including cryptocurrency.

Benchmark is a portfolio with 70% of fund invested on FTSE 100 Equity Index and 30% of fund remaining as British Pounds.

You are required to rebalance your portfolio to fulfil your investment objective and outperform the benchmark.

In your final investment report, you are required to address the following: (i) investment philosophy and asset allocation; (ii) rebalancing strategies; (iii) evaluation of portfolio performance.

Part I. Discuss your investment philosophy and demonstrate how your asset allocation decision matching your risk tolerance and financial market view. You need to forecast the market using any available theories/tools/techniques/models and discuss the assumptions that your forecasts based on. Your discussion should not exceed 500 words (excluding tables, graphs, and calculations)

In this section you need:

• Demonstrate initial asset allocation (pie diagrams and tables);

• Calculate any applicable measures relevant to your portfolio (expected rate of return, standard deviation, beta coefficient, correlation coefficient/correlation matrices);

• Employ at least one valuation/forecasting technique to justify your investment decision;

• Support your calculation with relevant discussion and comments within allocated wordcount.

Part II. Discuss your rebalancing strategies. You need to rebalance your portfolio at least once during the holding period. In this section, you need clearly demonstrate when and why you rebalanced the portfolio, explaining why you buy, hold or sell your shares/currencies. You need to highlight how those changes affected the portfolio and might help you to achieve your investment objectives.

Your discussion should not exceed 700 words (tables, figures, calculations and in-text citations are excluded), and should be supported by traditional investment theories, pricing models and should be strongly underpinned by academic literature. You need to provide reflection in your investment strategy referring to behavior biases, irrationality and market efficiency.

Part III. Evaluate your portfolio performance against benchmark portfolio, and explain why your portfolio managed/failed to outperform the benchmark. Support your discussion with relevant calculations using any applicable performance measures of your choice.