Hello, if you have any need, please feel free to consult us, this is my wechat: wx91due
FINC6600 Written Assessment – Semester 2 2024
Deadline: Sunday 20 October 2024 (11.59pm Sydney time)
Weight: 30% (Group assignment)
Introduction
Continuing the work developed in the previous 7 weeks, your group is now tasked to develop a pitch deck supporting a final portfolio recommendation. The final portfolio can be a rebalanced version of the one previously submitted as a video presentation and should specify the ETFs that will represent the asset classes chosen for the core and satellite. The same constraints from the original project apply, namely:
- The investment in the core portfolio should be from 60% to 80% of the total investment (hence the investment in the satellite will range from 20% to 40%)
- Each ETF in the core should represent a minimum of 10% and a maximum of 50% of the total investment. As for the satellite, each ETF in it can have a weight of up to 10%
- There should be a minimum of 10 and maximum of 15 ETFs
- No short-selling allowed
- The investment horizon is 5 years with the investor having the goal of achieving an annual excessreturn of 4%. The excess return is in relation to the estimated risk-free rate and net of management fees payable to the managers of the ETFs chosen. Risk preferences of the investor are given by the risk profile questionnaire provided previously
- Only ETFs traded at ASX are eligible1
- You are allowed to change the asset allocation (both SAA and TAA) considering the feedback received in the video presentation and financial market developments since the asset allocation in your portfolio was chosen
Pitch deck vs pitch presentation: the difference
Your team has already worked on a slide deck that was presented as part of the first assessment. The slides that will be submitted as your pitch deck will need to be substantially different. Why? Because the final pitch deck should be considered as a standalone document that will guide the decision of the investor without a video/live presentation accompanying it. Hence, your pitch deck must contain much more information and level of detail than one would expect in a typical slide deck. Check the links below for a few examples of the type of slide decks made by investment firms that you should be aiming for:
- BlackRock 2024 Midyear Global Outlook:
https://www.blackrock.com/corporate/literature/whitepaper/bii-global-outlook-in-charts.pdf
- Fidelity Quarterly Market Update:
https://institutional.fidelity.com/app/literature/view?itemCode=9871152&renditionType=pdf&pos=na
- Invesco 2024 Investment Outlook:
https://www.invesco.com/content/dam/invesco/au/en/pdf/insights/2023/Invesco%202024%20 Investment%20Outlook.pdf
- Guggenheim Macro Themes for 2024:
https://www.guggenheiminvestments.com/GuggenheimInvestments/media/PDF/MacroThemes-for-2024.pdf
As you can notice, the slide decks in the links above are more detailed and contain information to a level that somehow dispense with the need for a live/video presentation altogether. We will provide general guidelines and principles to help you create the slides that will represent your pitch deck.
What goes into your slide deck: contents & structure
Your slide deck must adhere to the following structure (with variations being allowed and respecting the maximum number of slides, 40):
|
Team and firm introduction: Introduction of team members (please include a professional photo of everyone) and corresponding roles (e.g. macroeconomist, analyst for emerging markets, etc) in the investment firm represented, Alabama Investments. Provide the SID under your name. |
1 |
|
Table of Contents: list of all the sections in the slide deck with the corresponding page numbers. |
2 |
|
Executive summary and portfolio recommendation overview: Overall summary of the investment thesis and portfolio recommendation. |
3 |
|
Overview of the portfolio’s investment goal: Presentation of the investor’s goal and risk profile that is guiding the construction of the recommended portfolio. |
4 |
|
Macroeconomic analysis: Presentation of the macroeconomic outlook for the relevant jurisdictions with a focus on the explanation of forecasts (short and long-term) for CPI, GDP growth, and interest rates. Business cycle projections associated with the markets/jurisdiction having a major impact in the portfolio proposed. |
5-9 |
|
Capital markets assumptions (CMAs): Annualised expected return and risk for the asset classes. It’s compulsory to have CMAs for every asset class included in the portfolio and in particular Equity Australia, Equity Global, Equity Emerging Markets, Fixed Income Australia, and Fixed Income Global (even if they are not all present in your investment recommendation). There needs to be an explanation of the methodology behind the calculation and the proxy used to represent each asset class (for example, what’s the index associated with, say, Equity Global). |
10-11 |
|
Strategic asset allocation (SAA): Choice and justification of asset classes included in the SAA (longterm). Allocation must be aligned with the macroeconomic analysis, CMAs, and investor’s goal/risk tolerance. |
12-14 |
|
Tactical asset allocation (TAA): Choice and justification of asset classes included in the TAA (longterm). Allocation must be aligned with the macroeconomic analysis, CMAs (although CMAs are long-term oriented), and investor’s goal/risk tolerance. |
15-17 |
|
Core-satellite portfolio: Explanation of the methodology behind the choice of weights for the core and satellite parts of the portfolio (and for each asset class within them). The discussion must show alignment with the analysis conducted previously and be guided by the investor’s goal/risk tolerance. |
18- 20 |
|
ETF selection: Presentation of the ETFs that will be representing the asset classes included in the core and satellite parts of the portfolio. There can be more than one ETF per asset class. There needs to be an explanation of the management approach (passive or active) of each ETF considering whether they belong to the core or satellite. In addition, there needs to be an explanation of the methodology used to select the ETFs (including management fees and performance metrics). |
21-25 |
|
Portfolio characteristics, performance, and risk: Presentation of the projected performance and risk of the portfolio against the investment goal (4% excess return) and risk preferences of the investor. The discussion should cover not only the combined portfolio but also the core and satellite parts analysed separately. The overall characteristics of the portfolio should be presented and discussed as well (for example, exposure to different sectors and industries based on the GICS classification scheme, major components of the portfolio, duration profile in case of fixed income, etc). |
26-30 |
|
Reference list and appendix: Use appendix slides to address further details that are surplus to the requirements of the main slide deck but may be helpful in addressing investor questions. Moreover, you should provide in the appendix the inputs for all quantitative models used in the construction of the portfolio. For example, if the Black-Litterman model was applied, you need to provide the views and confidence levels. Use any citation and reference style that’s suitable however be consistent. |
31-40 |