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Topic: International Investments Coursework Paper

Feedback Method: Mixture of Formative and Summative Assessment Feedback. Students receive comments on their ability to link theory and practice in terms of applying portfolio management techniques and interpreting financial information.
Assignment Outline:
The assignment is an individual report on investment strategy for a small ethical fund.
You are the portfolio manager of a UK-based fund and need to build a portfolio of ethical assets (investments not allowed in the following industries: Tobacco, Defence and Gambling).
The fund must be a balanced portfolio of equities and bonds and needs to include equities from 3 companies as well as 2 bonds (1 government and 1 corporate bond). All assets must be from ethical companies (see above).
You are borrowing £10,000,000 for three weeks at a rate of 3% (annualised quote).
Your objective as portfolio manager is to produce a fund that delivers a return of 10% (annualised and net of borrowing costs). The holding period is 3 weeks (beginning and end of investment to be decided by the fund manager).
Trading is allowed during the holding / investments period (transaction costs are assumed to be zero).
All equities and bonds must be traded in the UK market
No short-selling, nor use of other funds or derivative contracts allowed.
Additional information:
Please note that at the end of your investment you will have to pay back the £10ml plus interest calculated for three weeks (divide by number of weeks in a year and multiply by investment period in weeks)

Required:
Part 1
A) By undertaking fundamental analysis of company shares select at least two equity sectors that you expect to perform well in the coming 3 weeks in the UK. 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 3 UK companies that you expect to outperform the FTSE100 market index. By undertaking fundamental analysis on government and corporate bonds (government debt, expectations on credit rating, changes in yield, duration, convexity) select 2 debt securities (bonds) that you expect to perform well in the coming weeks.
(Marks allocated: 40%)

Additional Information:
Please note this is where most of your marks come from and therefore we expect your analysis to be as detailed as possible. You can start by following the top-down approach, with a broad analysis of some of the major economies in terms of their macro-economic variables (GDP, Inflation, Unemployment rates) and the performance of their financial market indexes (for example show graphs of the countries’ market indexes or calculate their performance in terms of past weekly returns and standard deviation as per Excel spreadsheet on Blackboard).
Please focus your analysis on UK economy
Once you have explained why you are investing in the UK, try to examine the major sectors, i.e. pharmaceutical, IT, retail, transport, etc and try to evaluate how well (or badly they have performed)
The companies (equities) chosen should be UK based.
To gain a first in this section we would expect to see evidence of country analysis, a short explanation of the industries selected and a more detailed analysis of companies (Dividend, EPS, P/E analysis, expected returns, possibly use of CAPM)
B) By using your own judgement and appropriate financial concepts determine the best asset allocation (% of capital allocated to each asset within the portfolio)
(Marks allocated: 10%)
Additional Information:
The capital (£10ML) can be split equally between equity and bonds or in different measures, the allocation of how much is to be invested in each security needs to be briefly explained
C) Compare your results at the end of the investment period with a market index to be used as your benchmark.
(Marks allocated: 10%)
Additional Information:
The benchmark is a market index (like the FTSE100) which needs to be representative of your investment, please use FTSE100 as benchmark if your investment is all UK-based.
This relates ONLY to your EQUITY investment

Part 2
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 Treynor ratio.
(Marks allocated: 20%)
Additional Information:
This relates to the monitoring of the prices of the equities and bonds in your portfolio, please ensure you check prices at least once a week and report any significant change (a daily change greater than 5% for instance would need to be explained). You may wish to look at financial news or analysts’ reports published online on the companies making up your portfolio

Part 3
Conclude and explain the differences you observe between your portfolio and the benchmark in terms of passive or active management theories and concepts.
(Marks allocated: 20%- no more than 200 words)
Additional Information:
A short conclusion where you show the final return of your portfolio, the return on the benchmark for the relevant 3 weeks and try to explain any difference between the two (if you have outperformed the benchmark you may want to explain which companies provided a higher than average return and why, whilst if you have performed worse than the benchmark, you need to explain why you achieved a lower return, which companies performed badly and why)

Format of Coursework:

  1. An electronic copy of your assignment report should be submitted via the module blackboard site, please do not include your student number nor your name as anonymous marking will be carried out.
  2. Copy or screenshots of an Excel spreadsheet, containing performance data used for all calculations where necessary should be submitted as part of the main Word file.
  3. Answer all questions in this coursework and present your investment plan and findings in a professionally formatted report.
  4. You must include the module title on the first page (Cover Page) of your report. The wordcount for the report is 1500 words (±10%), with size 12 font and 1.5 line spacing for the main text.
  5. List of References should be included if any materials were cited in the report, following the Harvard Referencing Style. Appendixes may be used where necessary.
    You are expected to make full use of all the facilities and data sources offered by the University. Examples of sources of information include the Financial Times, the Economist, Investors’ Chronicle, Fame database, DataStream, Bloomberg website.
    The assignment must go through ‘Turnitin’ and must be submitted electronically no later than 13:00 on Wednesday 7th July 2021.
    The rules on late submission and plagiarism are applied and fully enforced by the school.
    Submission of Coursework
    Unless explicitly stated otherwise in writing by the module leader, all coursework on this module is submitted via Blackboard only. It will automatically be scanned through a text matching system (designed to check for possible plagiarism). • DO NOT attach a CA1 form or any other form of cover sheet;

Type of service: Academic Paper Writing
Type Of Assignment: Coursework
Subject: Investment
Pages/words: 6/1500
Number of Sources: 8
Academic level: GCSE / A Level
Paper format: MLA
Line Spacing: Double
Language Style: UK English

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