TASK: The Investment Strategy slide-deck must deliver the following information:

1. Review Jenny Smith's personal circumstances, requirements, risk profile and investment objectives.

2. Demonstrate how you will change her current portfolio allocation to meet her investment objectives and satisfy all of her requirements. In your investment strategy, you must take into account the following:

• Overall global market trends;
• Macroeconomic factors for each asset class and geographical region;
• Which exchange traded funds (ETFs) you will recommend to implement your strategy;
• The reasons for your choices and how they align with Jenny's personal requirements and objectives.

3. With so much uncertainty in global markets today, Jenny wants to know how her portfolio will be affected over the years. Considering historical market cycles, business trends and key market events, identify key factors which are significant in contributing to a portfolio drawdown. Explain how you plan to rebalance or hedge against these adverse periods throughout the investment horizon.

Following the items below to answers the task:

1. Agenda (Excellent outline & executive summary of the slide deck for the client).
2. Client Needs (Excellent synopsis of how your investment strategy satisfies the client's requirements).
3. Strategic Asset Allocation (SAA) (Excellent SAA that meets the needs of the client).
4. Macro Outlook Excellent macro outlook of the major factors influencing the Investment Strategy.
5. Analysis of Six Regions(Excellent analysis of macroeconomics, monetary policy, political factors & investment recommendations for the respective regions (analysis & graphs). 1. Australia 2. United States 3. Eurozone 4. Japan 5. China 6. Emerging Markets
6. Equities Outlook (Excellent SAA & TAA strategies for equities).
7. Bonds Outlook (Excellent SAA & TAA strategies for fixed income.)
8. TAA (Excellent TAA that is consistent with your short-term 12-month outlook).
9. Requests (Excellent analysis & approach in addressing the client's concerns).
10. Selection of ETFs (Excellent analysis of ETFs).

YOUR CLIENT

Your client is Jenny Smith, aged 40. Jenny is an Indigenous Australian from an Aboriginal clan in South-East Queensland. Jenny is a descendent of her Indigenous tribe who suffered the inter-generational trauma from her descendants who suffered atrocities when the British Empire claimed settlement of Australia in the late 1700s. Jenny was recently awarded a large sum of money from a Commonwealth Native Title court settlement valued at A$202 million. Unfortunately, the value of Jenny's court settlement has recently declined to a value of A$131 million. Jenny is a former Griffith Business School (GBS) student and wants to keep $2 million for herself and invest the remaining balance in an investment portfolio which will generate income for Griffith University student scholarships for individuals experiencing financial hardship. Jenny wants the income from the remaining $100 million investment portfolio to fund Griffith University student scholarships today and over the long-term. Jenny believes that with prudent planning, this investment portfolio will grow over time and generate an income stream for Griffith University to help fund these student scholarships. Jenny has approached NEC to develop an investment strategy for the $100 million portfolio.

For further context, approximately one year ago, Jenny approached another asset management firm, Not Gonna Make It Capital (NGMIC) who offered her an investment strategy that promised a return of 7% annually. Jenny was impressed with their investment pitch as they prioritised sustainable investing and cryptocurrencies, which she believes to be a wise decision over the long-term. A year ago, Jenny invested $202 million in the investment strategy recommended by NGMIC.

Things were looking rosy for Jenny last year but then she learnt that her $202 million of assets lost a lot of money and she only has $131 million of capital remaining at this point in time. NGMIC has lost nearly 50% of Jenny's investment capital. Jenny has approached NEC to review her portfolio and to potentially reallocate her assets to better meet her new set of financial objectives.

The management at NEC has assigned Jenny and this investment case to you and your student investment team as the firm wants to give you experience and exposure in investment management. You and your student investment team must build trust and respect with Jenny, given her Indigenous Australian heritage and the fact that she has lost 50% of her capital over the past 12 months. Following the initial meeting with your team of investment specialists, Jenny has stipulated the investment requirements:

[1] The expected annual return should be at least 7% to match that of NGMI Capital.

[2] She is an advocate of sustainable investing and the portfolio needs to align with her beliefs as much as possible.

[3] The portfolio must not be leveraged.

[4] The portfolio must invest in Australian Securities Exchange (ASX) listed exchange traded funds (ETFs) only.

[5] The portfolio must be well-diversified across various asset classes. Each asset class in each geographical region should not contribute more than 30% of the portfolio.

[6] The maximum drawdown acceptable for Jenny is -15% in any year.

As at 31 December 2022 (over 12 months ago), Jenny Smith's portfolio was valued at $202 million and was invested in poor performing ETFs that were exposed to green metal miners, short-selling Nasdaq 100 index, hydrogen industry and Chinese equity market. Jenny's investment portfolio declined in value by -35% in 2023. Jenny Smith's disastrous asset portfolio is worth $131 million and is comprised of the following ETF investments:

Ticker	ASX Listed ETFs	30/12/22	29/12/23	2022 Return	Portfolio Weighting
SNAS	Global X Ultra Short Nasdaq 100 Hedge	$5.53	$1.975	-64.3%	40%
GMTL	Global X Green Metal Miners ETF	$9.92	$7.75	-21.9%	15%
HGEN	Global X Hydrogen ETF AUD	$6.88	$5.49	-20.2%	15%
IZZ	iShares China Large-Cap ETF AUD	$42.8	$37.85	-16.9%	15%
	TOTAL PORTFOLIO				100%

As an experienced businesswoman, Jenny has seen boom and bust cycles in investments and understands how poor risk management can potentially wipe out a lifetime of savings. She believes that NGMIC were poor investment managers and hopes that NEC is a professional organisation that can manage her special Griffith student investment fund over the long-term. In addition to reviewing the investment portfolio, your team must provide a macroeconomic outlook and forward-looking viewpoints of every asset class over the next 12-18 months, which includes potential opportunities, risks and catalysts.

Investment Universe of ASX listed ETFs

Australia Cash
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
AAA	ETF	BetaShares Australian High Interest Cash ETF	0.18%	3,366	0.02%
BILL	ETF	iShares Core Cash ETF	0.07%	768	0.01%
ISEC	ETF	iShares Enhanced Cash ETF	0.12%	258	0.02%
Australia Bonds
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
IAF	ETF	iShares Core Composite Bond ETF	0.15%	2,305	0.01%
VAF	ETF	Vanguard Australian Fixed Interest Idx ETF	0.15%	1,874	0.02%
VGB	ETF	Vanguard Australian Govt Bond Idx ETF	0.20%	1,005	0.02%
VACF	ETF	Vanguard Australia Corporate Fixed Interest Index ETF	0.20%	661	0.08%
Australia Stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
VAS	ETF	Vanguard Australian Shares Index ETF	0.10%	14,580	0.01%
IOZ	ETF	iShares Core S&P/ASX 200 ETF	0.05%	5,158	0.03%
A200	ETF	Betashares Australia 200 ETF	0.04%	4,453	0.01%
Australia Thematic Stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
FAIR	ETF	BetaShares Australian Sustainability Leaders ETF	0.49%	1,432	0.16%
VETH	ETF	Vanguard Ethically Conscious Australian Shares ETF	0.17%	394	0.05%
GRNV	ETF	VanEck MSCI Australian Sustainable Equity ETF	0.35%	163	0.07%
IHD	ETF	iShares A&P/ASX Dividend Opportunities ESG Screened ETF	0.23%	310	0.07%
Australia Real Estate / Property
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
MVA	ETF	VanEck Australian Property ETF	0.35%	585	0.09%
SLF	ETF	SPDR S&P/ASX 200 Listed Property Fund	0.40%	494	0.08%
VAP	ETF	Vanguard Australian Property Securities Index ETF	0.23%	2,849	0.03%
Global Stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
VEU	ETF	Vanguard All-World ex US Shares Index ETF	0.08%	57,896	0.03%
VGAD	ETF	Vanguard MSCI Index International Shares (Hedged) ETF	0.21%	2,885	0.03%
VGS	ETF	Vanguard MSCI Index International Shares ETF	0.18%	7,176	0.03%
Global Thematic Stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
ESGI	ETF	VanEck MSCI International Sustainable Equity ETF	0.55%	187	0.09%
ETHI	ETF	BetaShares Global Sustainability Leaders ETF	0.59%	3,079	0.14%
WXHG	ETF	SPDR World ex Australia Carbon Control (Hedged) Fund	0.21%	245	0.16%
Global Bonds
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
VBND	ETF	Vanguard Global Aggregate Bond Idx (Hedged) ETF	0.20%	1,194	0.05%
VIF	ETF	Vanguard International Fixed Interest Idx (Hedged) ETF	0.20%	734	0.03%
VEFI	ETF	Vanguard Ethically Conscious Global Aggregate Bond Idx Hedged ETF	0.26%	67	0.24%
Global Real Estate / Property
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
DJRE	ETF	SPDR Dow Jones Global Select Real Estate Fund	0.50%	418	0.10%
REIT	ETF	VanEck Vectors FTSE International Property (Hedged) ETF	0.43%	303	0.07%
Global Infrastructure
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
IFRA	ETF	VanEck FTSE Global Infrastructure (Hedged) ETF	0.52%	808	0.05%
VBLD	ETF	Vanguard Global Infrastructure Index ETF	0.47%	323	0.03%
US Stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
VTS	ETF	Vanguard US Total Market Shares Index ETF	0.03%	574,439	0.02%
SPY	ETF	SPDR S&P 500 ETF Trust	0.09%	765,942	0.04%
HNDQ	ETF	Betashares NASDAQ 100 ETF - Currency Hedged	0.51%	386	0.03%
NDQ	ETF	Betashares NASDAQ 100 ETF	0.48%	4,282	0.05%
Asia stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
VAE	ETF	Vanguard FTSE Asia ex-Japan Shares Idx ETF	0.40%	334	0.13%
IAA	ETF	iShares Asia 50 ETF	0.51%	700	0.12%
Europe stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
VEQ	ETF	Vanguard FTSE Europe Shares ETF	0.35%	197	0.03%
IEU	ETF	iShares Europe ETF	0.58%	740	0.10%
Emerging Markets - Stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
VGE	ETF	Vanguard FTSE Emerging Markets Shares ETF	0.48%	771	0.06%
IEM	ETF	iShares MSCI Emerging Markets ETF	0.69%	938	0.11%
Emerging Markets - Bonds
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
IHEB	ETF	iShares JP Morgan USD Emerging Markets Bond (AUD Hedged) ETF	0.51%	87	0.13%
Japan - Stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
IJP	ETF	iShares MSCI Japan ETF	0.50%	617	0.04%
HJPN	ETF	BetaShares Japan ETF - Currency Hedged	0.56%	124	0.10%
China - Stocks
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
CETF	ETF	VanEck FTSE China A50 ETF	0.60%	22	0.16%
CNEW	ETF	VanEck China New Economy ETF	0.95%	107	0.31%
IZZ	ETF	iShares China Large-Cap ETF	0.77%	347	0.11%
Commodity based ETFs
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
ETPMAG	ETF	ETFS Physical Silver	0.49%	3,033	0.06%
GOLD	ETF	ETFS Physical Gold	0.40%	3,033	0.03%
PMGOLD	ETF	Perth Mint Gold	0.15%	9,876	0.06%
QAU	ETF	BetaShares Gold Bullion ETF (Currency Hedged)	0.59%	500	0.06%
OOO	ETF	BetaShares Crude Oil ETF-Currency Hedged (Synthetic)	1.29%	138	0.18%
Asia - Stocks - Miscellaneous
ASX code	Type	Fund Name	MER (% p.a.)	FUM ($m)	% Spread
ASIA	ETF	BetaShares Asia Technology Tigers ETF	0.67%	462	0.25%
NDIA	ETF	Global X India Nifty 50 ETF	0.69%	109	0.05%
VAE	ETF	Vanguard FTSE Asian Ex-Japan Shares Index ETF	0.40%	334	0.13%

Example: