INVESTMENT AND PORTFOLIO MANAGEMENT

Antonio, Carranza, Manalo, Sarmiento

3- BFM

I. INTRODUCTION
A. Client Details
Initial Investment: 500 Million
Risk Profile: Moderate-Aggressive
Term Profile: Mid-Long
Term Investment: Inv. Withdrawal/s: 2-3 times per year
Expected ROI: 12-15% annually

B. Portfolio Requirements
• Familiarization of the different investment products in the market.
• Focusing on bonds and equities since the client is moderate to aggressive or
hybrid of the two.
• To look for an investment that is 3-10 years span.
• Selecting of a stock with good returns
• To make sure that it is professionally manage pooled funds.

(P.S base this sa requirements ni sir Aguilar and sa sinabi ni sir Art)

II. SUGGESTED INVESTMENT

A. Equity Fund
a. Definition
It is a type of mutual fund or private investment fund, such as a hedge fund, that
buys ownership in businesses, most often in the form of publicly traded common stock.
The common denominator with equity funds is the desire for fund management to find
good opportunities to invest in businesses that will grow, throwing out ever-increasing
gushers of profit for the owners. This is in contrast to a bond fund or fixed income fund,
which uses shareholder money to make loans to companies or governments and
collects interest income.

b. Advantages and Disadvantages

Advantages:
§ Less burden. With equity financing, there is no loan to repay. The business
doesn’t have to make a monthly loan payment which can be particularly
important if the business doesn’t initially generate a profit. This in turn,
gives you the freedom to channel more money into your growing business.
 § Credit issues gone. If you lack creditworthiness – through a poor credit
history or lack of a financial track record – equity can be preferable or more
suitable than debt financing.
§ Learn and gain from partners. With equity financing, you might form
informal partnerships with more knowledgeable or experienced individuals.
Some might be well-connected, allowing your business to potentially benefit
from their knowledge and their business network.
Disadvantages:
§ Share profit. Your investors will expect – and deserve – a piece of your
profits. However, it could be a worthwhile trade-off if you are benefiting
from the value they bring as financial backers and/or their business
acumen and experience.
§ Loss of control. The price to pay for equity financing and all of its
potential advantages is that you need to share control of the company.
§ Potential conflict. Sharing ownership and having to work with others
could lead to some tension and even conflict if there are differences in
vision, management style and ways of running the business. It can be an
issue to consider carefully.

c. Opportunities and Threats

Opportunities:
§ The fund will rise depending on how you allocate it.
Threat:
§ High net worth

d. Short and Long Term Outcome

Short Term
§ Moderate risk
§ Steady returns
Long Term
§ Tax advantage on capital gains
§ Exhibits lower volatility
B. Stocks
a. Definition
It is a security that represents the ownership of a fraction of a corporation. This
entitles the owner of the stock to a proportion of the corporation's assets and profits
equal to how much stock they own. Units of stock are called "shares."

b. What type of stocks?

Common Stock
 Since the client was moderate to aggressive and it’s term profile was
mid to long it is advisable for him to get a common stock rather than a preferred
because it yields higher rates of return in the long term.

c. Advantages and Disadvantages

Advantages:
§ It has a potential for higher long-term return
§ It has an easily buying and selling process
§ Legal liabilities are restricted.
Disadvantages:
§ A high risk investment
§ The stock price and dividend may experience more volatility
§ It is more likely to lose investment if the company goes bankrupt.

d. Opportunities and Threats

Opportunities:
§ The investors company quickly adapt to changes in the market.
§ The investors company can have a new and innovative products before
competitors.
§ The investors company can made a major acquisitions market share.

Threats:
§ The investors company may face increased competition from rival
companies.
§ The investors company have a negative publicity.
§ The uncertain global economic conditions.

e. Short and Long Term Outcome

Short Term
§ Investors can make substantial profits in a very short amount of time.
§ It is less risky as money invested per transaction is substantially lower.
§ It involves a certain level of expertise and time, as investors must closely
monitor price movements and identify purchase and/or sale spots.
Long Term
§ Long-term investments almost always outperform the market when
investors try and time their investments.
§ Investors have historically experienced a much higher rate of success
over the longer term.
C. Real Estate
a. Definition
It is a form of real property consisting of land along with any permanent
improvements attached to the land, whether natural or man-made including water,
trees, minerals, buildings, homes, fences, and bridges. It is one of the most popular
choices for people who have the resources to put in investment and want to make their
money grow over the years.

b. Advantages and Disadvantages

Advantages:
§ It has always have a value.
§ It can be a profitable long-term investment.
§ It is a tangible investment that hedges against inflation.
Disadvantages:
§ Real estate is not a liquid asset.
§ It has a hidden and ongoing costs.

c. Opportunities and Threats

Opportunities:
§ It can provide an income in the form of rent.
§ The value of real estate increasing over the years.
Threat:
§ Calamities can destruct or damage the property

d. Short and Long Term Outcome

Short Term
§ The return will tend to be quick and quite a bit higher.
Long Term
§ The value increases over time.
§ Possibility of high return on your investment.
§ Generate passive income.

III. CHART
A. Division of Investments
B. Step by Step Process
C. Methods and Strategies Used

IV. METHOD OF APPROACH

A. Fundamental Approach
a. Overall Economy Status (COVID 19)
b. Industry Conditions (particularly stocks and real estate industries)
 c. Financial Condition of the Client and Company
d. Financial Statements

B. Technical Approach
a. Condition of Stock Market (particularly what stocks that we will invest in)
b. Patterns and Trends (Historical data, recent data, etc.)

V. RECOMMENDATION
VI. APPENDICES