FIN$3$IPM Portfolio Management ASSIGNMENT PART $1$ PORTFOLIO PROPOSAL CASE STUDY

You currently work for an individual client adviser for Bell Potter Securities, a leading Australian stockbroking and investment advisory firm, which provides investment advice, share trading and wealth management services. These clients pay full$-$service advisory and commission fees to your firm in return for the provision of initial investment planning and evaluation services, ongoing investment and related advice and the development and management of investment strategies and portfolios on their behalf.

You have just been assigned a new client to represent. The client$$s details are as follows.

Name of client: Sheldon Cooper

$$ Sheldon is in his early $40$s$.$

$$ He has saved $$500,000,$ which is currently invested in cash. He would like you to invest this

money in appropriate assets and securities$,$ and would then like to make regular

contributions towards this retirement savings.

$$ He has secure employment as a theoretical physicist.

$$ He describes himself as an aggressive investor, happy to take on risk if the returns are

proportional to the risk.

$$ He describes himself as a pacifist, who hates the concept of war or violence of any kind. He

would like her investments, at least to some extent, to be consistent with his beliefs.

The client doesn$$t wish to be exposed to the risks and transaction costs involved in investing directly in stocks listed on foreign stock exchanges, or in any assets other than stocks and exchange$-$traded funds $($ETFs$)$ listed on the ASX. However, there are a large number of ETFs which provide exposure to foreign stocks, domestic stocks, bonds, commodities, currencies and many other assets, and the client is willing to consider investing in any ETFs you would like to put forward.

There is an Assignment Data File on the LMS which provides information about:

$$ A selection of $75$ large Australian listed stocks.

$$ A selection of $120$ ASX$-$listed ETFs.

When making the asset allocation decision for your portfolio proposal, the portfolio can only include:

$$ Australian listed stocks as shown in the Assignment Data File.

$$ ETFs listed in the Assignment Data File.

o Note that you must purchase a whole number of shares or ETF units.

$$ Cash $$ we will assume an interest rate equal to the daily $1-$month Bank Bill Swap Rate. This was $4\mathrm{.}3\%$ on $19$ April. This is the interest rate that will be used in calculating the return on your

portfolio in Part $2$ of the assignment.

$$ Bitcoin $$ the price of ONE Bitcoin on $19$ April was A$$99,491\mathrm{.}30.$ If you wish to speculate by

purchasing Bitcoin you don$$t need to purchase a whole number of Bitcoins. Simply allocate a certain dollar amount and assume you can buy in fractional amounts.

Instructions

Prepare an investment portfolio proposal document for the client, based on the case study provided. Your proposal 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.

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 is being done on Saturday $20$ April $2024($based on closing prices as at $19$ April $2024).$

You should use the spreadsheet file provided and the case study information to complete the investment strategy development and portfolio construction requirements.