Tag Archives: A list of the relevant questions they should ask their advisors to improve their appreciation of the principal factors affecting investment performance. Explain your advice.

Investment & Fund Management Assessment2

Patel Kilani and Chisom Esupofo decided to retire early from Kingsway Productions Ltd two years ago.  This left them with potential investment portfolios of about £0.5 million each.  Patel decided that he would like to study for a new career in law, and Chisom decided that he would like to become a novelist.  As this would leave them with little time to manage their respective investments, they both decided to seek the services of financial advisors.

After discussing the matter at length between themselves, Patel decided to go with Clydeshire Bank and Chisom with Star Financial Solutions Ltd.  Both deposited £0.5million with their respective advisor and, after agreeing an initial asset allocation, left their funds to be managed on a discretionary basis.  Both agreed on the following strategic asset allocation:

Equities	60%	(Benchmark – FTSE All Share Index)
Bonds	30%	(Benchmark – FTSE UK Bond Index)
Cash	10%	(Benchmark – 5%)

Investment & Fund Management Assessment2

Both also agreed with their advisors that capital growth was to be a priority and that they did not intend to draw an income from the portfolio for the foreseeable future.

Chisom Esupofo was disappointed with the performance of his portfolio over the two years and contacted Patel Kilani to ask about the performance of his portfolio.  Together they discussed the performance of their respective portfolios and tried to understand the statements sent to them by their advisors as follows:

Patel Kilani’s Performance Statement:

Investment Account Statement as at 31^st December 2023:

Investment	Amount Invested £	Market Value at 31/12/23 £	Average Beta
Blackmore PLC	100,000	117,200	1.2
Artemis Income Fund	100,000	107,100	0.6
UK Government Bonds	100,000	94,915	N/A
Cash	200,000	214,300 *	N/A
Total	500,000	533,515
Less: Fees & Charges		5,335
Current Value of Portfolio		528,180

* includes £5,300 interest paid from UK Government Bonds

Return on FTSE All Share Index

Return on FTSE UK Bond Index

Investment & Fund Management Assessment2

Chisom Esupofo’s Performance Statement:

Investment Account Statement as at 31^st December 2023:

Investment	Amount Invested £	Market Value at 31/12/23 £	Average Beta
Funding Circle	150,000	157,350	0.7
HL Select UK Shares	100,000	108,130	0.8
Baring Strategic Bond	200,000	193,720	N/A
Cash	50,000	52,500	N/A
Total	500,000	511,700
Less: Fees & Charges		5,117
Current Value of Portfolio		506,583

Investment & Fund Management Assessment2

Overall, the two investors cannot decide whether or not they should complain about the service they have received from their respective advisors.  They feel rather daunted about confronting the advisors without improving their investment and fund management knowledge. They have asked you to help them by producing a report outlining the main aspects they must discuss with their advisors.

You should complete a 3000-word report which contains:

1. An explanation of the performance of the portfolios of Patel Kilani and Chisom Esupofo.  This should include a comparison with the performance of the benchmark portfolios
2. A list of the relevant questions they should ask their advisors to improve their appreciation of the principal factors affecting investment performance. Explain your advice.
3. Compare the relative performance of the two portfolios.  You should also explain the difficulties encountered in measuring the performance of any investment portfolio and the techniques that can be used.
4. An analysis of the content of each portfolio in terms of diversification.  Include here an explanation of the theory and practice of diversification and its relationship to risk.  Also, provide a brief explanation of the features of a technique that may be used to optimize the risk-return relationship in investment portfolios.
5. An explanation of the features and attributes of any alternative investments or investment vehicles you would recommend the two to consider.
6. Comment on the quality of the service Patel Kilani and Chisom Esupofo received.  Explain what improvements, if any, you recommend they demand from their advisors.

Investment & Fund Management Assessment2

Student Instructions for Submission of Coursework (Assessment 2)

• An individual assignment based on the following case study is to be submitted by Friday, 7th of May 2024
• This module requires you to submit your work online via Turnitin on the MyBeckett module page.
• You MUST submit your work through MyBeckett using the link set up by the tutor. Receipt of your work will be recorded.
• This assessment is worth 80% of the marks for the module;
• The word count is 3,000 words;
• Words included in the bibliography are not included in the word count;
• You should only use Harvard referencing;
• Any academic journals and websites referred to must be properly referenced;

•          The text of your assessment must be displayed using a 12-point Arial or Verdana font and with a line spacing of at least 1.5. Use APA referencing style.