BAFI1045: You will then prepare a report in which you can explain your investment strategy for constructing: Equity Portfolio Management Report, RMIT, Singapore

You will then prepare a report in which you can explain your investment strategy for constructing a passive and an active portfolio and then evaluate the investment performance of each in terms of absolute and relative return, risk, and attribution effects to explain the differences in performance of each portfolio. You will be given ten companies selected from the STI index that tracks the performance of the top 30 companies listed on the Singapore Stock Exchange to create an active portfolio

This assessment replicates the tasks that would be undertaken by portfolio managers in a real-world investment company. For the passive portfolio, your task will be to replicate, as closely as possible, the risk and return characteristics of the Straits Times Index benchmark index. For your active portfolio, your task will be to select stocks and sectors from ten stocks selected from companies in the STI Index, which will result in your portfolio, achieving a higher return than the index.

Your task is not necessarily to produce a positive return. If the markets fall in value, then your passive portfolio should fall in value by a similar degree. Your active portfolio should aim to outperform the return on the index: if the index falls your portfolio should fall by a lesser amount; if the index rises, then your portfolio should rise by a higher amount.