Investment Analysis and Portfolio Management
Department of Finance
Faculty of Business Studies
Subject: Submission of the term paper
I am honored and pleased to inform you that as per the course requirement, I selected to work on the field of Portfolio Management & have prepared the report. Based on our classroom knowledge and real-life key informant interviews, we have prepared this report for your kind consideration. Researching for and finalizing this report have been an extremely learning, interesting and rewarding experience for me. It was a lifetime opportunity to compare the bookish knowledge with the real-world applications. I have gone heights to ensure the highest possible quality of our research and report. You would be pleased to know that I have worked with the utmost possible integrity, honesty and care for preparing this paper. I also tried to follow your instructions properly now and when necessary.
I would like to request you to allow me to submit the report on the Portfolio Management Sincerely Yours
Md. Sabirul Islam
Security Portfolio Management: Portfolio is a group of financial assets such as shares, stocks, bonds, debt instruments, mutual funds, cash equivalents, etc. A portfolio is planned to stabilize the risk of non-performance of various pools of investment.
Management is the organization and coordination of the activities of an enterprise in accordance with well-defined policies and in achievement of its pre-defined objectives.
Portfolio Management (PM) guides the investor in a method of selecting the best available securities that will provide the expected rate of return for any given degree of risk and also to mitigate (reduce) the risks. It is a strategic decision which is addressed by the top-level managers.
Portfolio management is also known as investment management which consists of managing the investment securities options. There are seven main activities in portfolio management. They are:
• Laying down the objectives of investment and the difficulties involved in it
• Choosing the asset mix
• Portfolio strategy formulation
• Securities selection
• Execution of portfolio
• Revision of portfolio and
• Evaluation of performance.
Here, Security selection is the first question and Asset allocation is the second question.
Security selection based on:
• Risk: The measures of risk that are most widely and commonly used are variability and beta measures. The preferred measure of variability is standard deviation and beta reflects the systematic risk of the portfolio.
• 2. Return: Return can be expressed as a percentage and is calculated by adding the income and the change in value and then dividing by the initial principal or investment amount.
The change in the value of a portfolio over an evaluation period, including any distributions made from the portfolio during that period.
Measuring the overall performance
measuring the performance of the portfolio involves considering both risk and return. The most widely used measures of performance are Treynor’s measure, the Sharpe measure, the Jensen measure and the M2 measure.
Apex Adelchi Footwear Limited
A leading manufacturer and exporter of leather footwear from Bangladesh to major shoe retailers in Western Europe, North America and Japan. The company has revenues of USD 42 million in 2006. AAFL pioneered the export of value added finished products export in the leather sector of Bangladesh and is also involved in the local footwear retail business with the second largest shoe retail network in the country. AAFL has equity ,...