Client’s Current Allocation: ALCKX $1,000,000 AllianceBernstein Large Cap Growth DDFIX $1,000,000 Invesco Diversified Dividend Fund TMDPX $1,000,000 TimesSquare Mid Cap Growth Prem LCRYX $4,000,000 Lord Abbett Core Fixed Income OPMYX $1,000,000 Oppenheimer Main St Small Cap CRSOX $1,000,000 Credit Suisse Commodity Return Strat Com ODVYX $1,000,000 Oppenheimer Developing Markets Looking at the allocation above, what do you think the client’s investment objective is? If I want to rebalance the above portfolio to the following allocation, how much would the client need to buy or sell in order to reach target allocation. Fixed Income 50.0% Large Growth 11.0% Large Value 9.0% Mid Growth 5.0% Mid Value 2.5% Small Cap 1.5% International - Developed 10.0% International - Emerging 6.0% Commodities 5.0% Once the reallocation is modeled, how would I redo question #1 with the Pro Forma or Recommended Allocation? Any feedback is greatly appreciated!
Come on…your investment manager just gave you an assigment to develope a Investment Policy Statement for this prospect, and construct a portfolio that is attractive enough to bring the client over to your firm. Open up Excel, put in your model portfolio and figure it out, it is not that hard.
ws - Thanks for the help…this is for an final essay I have to write for one of my classes, anyone else with real feedback?
I agree with ws - fire up excel and do some basic modeling. Not that hard, and kind of a key skill to any finance/investing/asset management job you might want. Shouldnt take you more than an hour if you crank it out.
u416047 Wrote: ------------------------------------------------------- > ws - Thanks for the help…this is for an final > essay I have to write for one of my classes, > anyone else with real feedback? I guess we didn’t realize this was a group project - in that case, just give me the professor’s email address and I’ll send him our final answer. I’ll need your name and student ID.
Dude the reallocation is simple. Figure out what the current weightings of the funds are as a % of total portfolio value, look up the NAVs for the funds as of a certain date, and then just calculate the number of shares you would need to buy or sell in order to rebalance. The portfolio is 50/50 (Fixed Income/Equities & Alternatives) meaning that your investor is probably somewhat risk averse or older in age. The objective of the portfolio looks mixed between sustainable income and capital appreciation. Since you have a larger weighting towards growth over value I would lean towards cap app.