Question
You are working in investment advisory firm where primary job is to support your clients in their investments decisions by guiding them according to their
You are working in investment advisory firm where primary job is to support your clients in their investments decisions by guiding them according to their risk appetite. Mr. Kashif wants to investment 5 million while he doesnt have any idea how to make a portfolio which would be diversified enough to mitigate the risk. Though, you asked few questions from Mr. Kashif to know his financial health and potential to bear losses. 1. Kashif is 42 years old and working in a privately owned company. 2. He has 3 children, age of children are 7, 11 and 15 and the elder one is about to go collage which required annual fees of PkR 150,000. 3. He wants to earn at least a return which compensate the inflationary pressure in future. Current inflation rate of Pakistan is hovering around 8.90%. 4. According to him, he believe, he can able to take more risk. 5. He also planned for leisure trip with family after 3 years which required PkR 2 million. Being an advisory you gathered all the relevant data to consult him in a better way. Allocation Portfolio A Portfolio B Portfolio C Cash 5% 20% 5% Equities 20% 25% 60% Money Market Funds 60% 40% 15% Gold 15% 15% 20% Total 100% 100% 100% Expected Return 15% 18% 22% Volatility 17% 20% 25% Requirements Suggest which investment portfolio is feasible for Mr. Kashif in order to fulfill his objectives?
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