Group ReportObjectives of the portfolio“The ultimate objective of the investment portfolio is to maximize the returns and minimize the risk involved. ” Keeping this in mind, the following objectives have been set: Amount to be investedWith the current 10 investment decisions, the amount invested in the securities comes up to 1499700. The monthly repayment mortgage for the house is 4666. His income is 70,000 p. a. His total ROI comes up to 147.9%. Thus, he should invest 75% of his portfolio amount i. e. 75% of 3718150 which is 2788612.5 in moderate risk shares with stable returns.
The rest, which is 25% of 3718150, should be invested in high growth sectors. Returns on investmentThe returns he expects after considering his mortgage repayment should be about 15% more than 1499700 which is the actual amount invested. That means the returns should be 1724655.Requirement of MoneyHere, three factors are taken into consideration-Since Mr. Fortunate’s children are aged 2 and 3, he will soon need money to fund their education. Hence, returns are expected within a period of 2 years. This should also consider the fact that he doesn’t have any pension provisions.
Finally, he requires continuous money for his mortgage repayment. Risks involvedMr. Fortunate can manage to bear moderate risk and invest a part of his portfolio in high growth sectors. Statement showing current valuation of the portfolioS. No. Security NameEPIC CodeSectorVolumePrice of PurchaseInvestment AmountBid PriceLatest ValueReturn onInvestment*1. MORRISON (WM)MRWFood & Drug Retailer1000159159000345.25345250117.132. PUNCH TAVERNSPUBInformation Technology Hardware6002501500001281768600412.43. CADBURY- SCHCBRYFood Producers & Processors500330165000678339000105.454. BPBP/Oil & Gas400362.514500056922760056.965. UNITED UTILITIESUU/Water30047614280075022500057.566. BRITISH AIRWAYSBAYTransport50017889000496.5234750163.767. SCOTT & STH ENERGYSSEElectricity3006111833001489446700143.698. HENRY BOOT GROUPBHYConstruction2505401350001270317500135.189. LAND SECURITIES GROUPLANDReal Estate2009031806002007401400122.2510. RECKITT BENCKISERRB/Personal Care & Household Products15010001500002749412350174.9 TOTAL 14997003718150* Return on Investment: (Latest value- Invested amount)/Invested Amount * 100 therefore, ROI (Total) = 147.9%Transaction summaryIn this investment portfolio, Mr.
Fortunate has sold three shares which are: S.No. Security NameEPIC CodeSectorVolumePrice of PurchaseInvestment AmountBid PriceLatest ValueANGLO IRISH BANK CORPANGLBank30059217760017.075121NATIONAL GRID TRANSCONGTElectricity300380114000777233100BAT INDSBATTobacco2006101220001586317200TOTAL413600555421This gives him a return of 34.28% which he will use to fund his short-term money requirements. Assessment of the current positionThe current position of the portfolio will be assessed keeping in mind the objectives of Mr. Fortunate. This will be done by assessing each of his shares: 1. MORRISON (WM) This share belongs to the Food and Retailer sector and records a Return on Investment of 117.13% which is very high.
Food and Retailer sector recorded a growth of +5.02% in the previous month. This will help Mr. Fortunate in funding his long term and mid term payments such as pension requirements. 2. PUNCH TAVERNSThis share belongs to the Information Technology Hardware sector and records a Return on Investment of 412.4% which is extremely high. Information Technology Hardware sector recorded a growth of +11.81% in the previous month. This will help Mr. Fortunate in funding his long term payments such as pension requirements.
3. CADBURY- SCH This share belongs to the Food Producers & Processors sector and records a Return on Investment of 105.45% which is extremely high. Food Producers & Processors sector recorded a growth of +4.34% in the previous month. This will help Mr. Fortunate in funding his short term payments such as children’s education. 4. BPThis share belongs to the Oil & Gas sector and records a Return on Investment of 56.96% which is high. Oil & Gas sector recorded a growth of +5.43% in the previous month.
This will help Mr. Fortunate in funding his short term payments such as children’s education. 5. UNITED UTILITIES This share belongs to the Water sector and records a Return on Investment of 57.56% which is high. Water sector recorded a fall of -2.58% in the previous month. Mr. Fortunate should not sell of this share in the near future and wait for sometime until the water industry grows and then use it for funding his long term payments such as children’s education, mortgage repayment etc.