Your boutique wealth management

| October 14, 2019

Your boutique wealth management and advisory firm provides quarterly review meetings with clients, and you are required to present a performance summary and analysis of the investment strategy and portfolio that was proposed for the client in Case Study 1. This presentation is to be completed based on market and security information as at October 4th 2019. The relevant security trading information and portfolio performance analysis should be based on the Bloomberg terminal resources, and your portfolio analysis should primarily be conducted using the Portfolio and Risk Analysis (PORT) functionality available on the Bloomberg terminal.

The presentation to the client should include the following components:

A summary of the sharemarket and investment environments relevant to the equity market sector generally, and the proposed investment strategy and the recommended investment portfolio structure specifically, during the investment period.

An overall summary of the investment portfolio outcome for the approximate 12-week period from July 15th 2019 to October 4th 2019. This should include determination of the
value of each individual portfolio component as at October 4th 2019 and, from this, the overall value of the portfolio as at October 4th 2019.

Identification and discussion of the investment components which were significant contributors to, or detractors from, variation in the portfolio value and portfolio performance over the quarterly review period, and any specific explanations for the movement in these components.

A quantitative review of the performance of the investment portfolio using recognised portfolio performance measures, as well as performance comparison to index or other benchmarks. 

The client is also currently a member of the Council of La Trobe University, which has recently announced a strategic plan for the university to achieve a Net Zero target by 2029. The client’s involvement in this planning has triggered their awareness and concerns around climate change and wider environmental, social and governance (ESG) issues. As a result, the client would like a summary of the portfolio exposure to ESG-sensitive investments and a proposed portfolio modification recommendation to divest exposures to unethical and fossil fuel investments, which can be replaced either following the recommended underlying investment strategy or by incorporating a clean energy and ethically-responsible portfolio component. The value of the investment portfolio as at October 4th 2019 should be determined based on the following information: 

Using closing share and other security prices on October 4th 2019 available from the Bloomberg terminal (preferable) or similar reputable financial market databases.

Information on dividend payments or other distributions associated with shares or securities should also be reflected in portfolio value changes. 

Short sales positions are effectively closed out on October 4th 2019 (by purchasing the relevant shares or securities at the closing prices on October 4th 2019), with the purchase
proceeds coming from the balance of the cash holding position. 

Futures contract positions are assumed to be closed out on October 4th 2019 by entering into an offsetting futures contract on the same underlying index product. The closing price
of the December 2019 SPI 200 Futures Contract on October 4th 2019 was 6,487. 

Index call or put options are assumed to be sold (not exercised) on October 4th 2019 at the prevailing closing option security prices on this date. The closing (settlement) price for the December 2019 SPI 200 index call option was $105.50 and the closing (settlement) price for the December 2019 SPI 200 index put option was $218.00 on October 4th 2019.

Pro-rata interest will be paid on the cash holding balance on October 4th 2019 based on the indicated 180-day Dealer Bill rate of 1.169%, prior to any disbursement of this cash holding for the closing out of short sales positions.

For any students that had problems with the correct or appropriate composition of an investment portfolio as part of Case Study 1, corrections can be made to the portfolio for the
purposes of accurately completing the Case Study 4 requirements. 


This portfolio review presentation to the client will be conducted in tutorial classes in Week 12 (week beginning October 21st 2019). The client presentation should be for a planned duration of 5-7 minutes and it is expected that you use a formal slide-show or similar as part of your presentation. There should be a maximum of 10 presentation slides used as part of your client presentation. This case study contributes 10% to the overall final assessment in the FIN3CSF subject. There will be assessment based on both the oral presentation and the presentation slides, as per the provided assessment guide and marking rubric. This case study is to be completed individually, and the presentation has a word-limit equivalent of 500 words per student. Note that no documents are required to be submitted as part of the case study requirements.

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