The assignment is an on investment strategy for a small fund. You are the portfolio manager of a UK-based fund and have to build a small portfolio. The fund should be a balanced portfolio of equities and bonds and should include equities from 4 companies and 4 bonds (government or corporate debt securities). You are borrowing £1,000,000 for four weeks at the rate LIBOR + 2.5% (annual quote . Your objective as portfolio manager is to produce a fund that should deliver an return of 15%. The holding period is 4 weeks (beginning and end of investment to be decided by the fund manager). Trading is allowed during the holding period (transaction costs are assumed to be zero). nor use of other funds allowed. By undertaking fundamental analysis of company shares select equity sectors that you expect to perform well in the coming 4 weeks. Within each sector, on the basis of your analysis (qualitative as well as quantitative such as company news, current and expected P/E ratios, EPS, Dividends, return and sales forecasts, etc.) select 2 companies that you ex
pect to outperform the equity market. By undertaking fundamental analyses on government and corporate bonds (government debt, expectations on credit rating, changes in yield, duration, convexity) select 4 debt securities that you expect to perform well in the coming month. Monitor the performance of the portfolio on a weekly basis. In terms of fundamental factors explain reasons for the changes you are observing. Critically evaluate the performance of your portfolios against the performance of the selected benchmark by using the Sharpe ratio, Treynor ratio or Jensen’s Alpha. Conclude and explain the divergences you observe between your portfolio and the benchmark in terms of passive or active management theories and concepts. NO PLAGIARISM!!! Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it