The document discusses portfolio management of Partners Healthcare's long term investment pool. It analyzes including real assets like real estate investment trusts (REITs) and commodities to diversify risk and boost returns. Mean-variance analysis of different asset mixes shows portfolios including REITs and commodities achieve higher expected returns with lower risk than the baseline mix or portfolios with just one real asset. The recommendation is to incorporate real assets into the long term investment pool to improve the risk-return profile.
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A quick overview of credit impairment under IFRS 9 for banks. Those with limited or no understanding of new requirements for loan loss accounting, will get a quick high level understanding of an accounting standard that is the most significant change in accounting for loan losses in more than a decade.
Hi, here is the presentation that shows how you can make more money from a Debt Mutual Fund over a conventional Fixed Deposit. Invest your 5-10 minutes and you could make thousands of bucks! Make your money more productive!
20-Feb-2016: Updated as per changed tax rules; more useful content added, less useful deleted.
Credit Impairment under IFRS 9 for BanksFaraz Zuberi
A quick overview of credit impairment under IFRS 9 for banks. Those with limited or no understanding of new requirements for loan loss accounting, will get a quick high level understanding of an accounting standard that is the most significant change in accounting for loan losses in more than a decade.
Mercer Capital - Corporate Finance in 30 Minutes Whitepaper.pdfMercer Capital
Corporate finance does not need to be a mystery. In this whitepaper, we distill the
fundamental principles of corporate finance into an accessible and non-technical
primer. Structured around the three key decisions of capital structure, capital
budgeting, and distribution policy, the guide is designed to assist family business directors and shareholders without a finance background make relevant and
meaningful contributions to the most consequential financial decisions all companies must make. Our goal with this whitepaper is to give family business directors
and shareholders a vocabulary and conceptual framework for thinking about strategic corporate finance decisions, allowing them to bring their perspectives and
expertise to the discussion.
Module 6.1Putting aside opinions you may have regarding huma.docxgilpinleeanna
Module 6.1
Putting aside opinions you may have regarding humane issues, consider that sleep deprivation has been used as a means of torture for many years. What are its primary effects, and why would these effects be considered useful in interrogation?
6.2
System Admin
Max Points: 6.0
What is the most significant effect of injuries to or abnormalities in the hypothalamus on behavior? Why is this effect the most significant?
Zhou 1
Investment Policy Statement
This IPS is designed for a young investor less than a 28 years old with the investment beliefs and principles. The primary objective of this investment policy statement is mainly aimed to monitor portfolio allocation against holding limits, and to consider personal situation make revisions to portfolio. What’s more, the main objective is mainly to achieve long term growth which is based on price appreciation. The purpose of the portfolio is to target annual returns of 12%. The annual and targeted allocation in order to target the return would be 60% stocks, 30% bonds and 10% cash. The portfolio’s rate of return is not guaranteed for the future investment and therefore, future returns may change over time. The portfolio will be rebalanced on annual basis. By using the five-year annual data for the different assets, investment holding period will be determined through annual review, efficient frontier and when an assent is inefficient, it will be replaced.
Stock-Trak Portfolio Report
Investments Policy Statement for 25-year-old
Funds are going to be in are going to be invested in higher to moderate-risk investment opportunities that has equally greater to lower risk such as the NASDAQ and S&P 500, therefore, the investor seeks an annual return from this investment of approximately 12%. In order to achieve the target return, 40% equity in mid/small-cap stocks and 20% in International stock. 30% of the portfolio is to be Inter-Term Government Bonds and Corporate Bonds. The remaining 10% are going to held in cash.
Actual asset allocation will be allowed to vary within a reasonable range of plus or minus an absolute 5 percent or 15 percent of the target asset allocation. The portfolio is going to be rebalanced when actual asset allocation over the reasonable range.
Name: Ying Wang
Stock-Trak Report
Summary of Investment policy
Risk: Risk Averse
Time Horizon: Long-term
Portfolio Selection: Cash, equities and bonds
Shortw-term liquidity need: Yes
Portfolio Selection Rationale
According to modern finance theory, an efficient portfolio earns highest expected returns under certain risks and has lowest risks under certain expected returns. Because I am risk averse, my expectation is to beat inflation. I only invest 32% of money in equity and bond market. My portfolio includes 68% of cash, 21% of S&P 500 ETF (SPY), 8% of Vanguard bond market ETF (BND) and 3% of Antero Resources Corporation (AR).
For equity investment, I mainly follow passive investment strategy. S&P 500 index E ...
Mercer Capital - Corporate Finance in 30 Minutes Whitepaper.pdfMercer Capital
Corporate finance does not need to be a mystery. In this whitepaper, we distill the
fundamental principles of corporate finance into an accessible and non-technical
primer. Structured around the three key decisions of capital structure, capital
budgeting, and distribution policy, the guide is designed to assist family business directors and shareholders without a finance background make relevant and
meaningful contributions to the most consequential financial decisions all companies must make. Our goal with this whitepaper is to give family business directors
and shareholders a vocabulary and conceptual framework for thinking about strategic corporate finance decisions, allowing them to bring their perspectives and
expertise to the discussion.
Module 6.1Putting aside opinions you may have regarding huma.docxgilpinleeanna
Module 6.1
Putting aside opinions you may have regarding humane issues, consider that sleep deprivation has been used as a means of torture for many years. What are its primary effects, and why would these effects be considered useful in interrogation?
6.2
System Admin
Max Points: 6.0
What is the most significant effect of injuries to or abnormalities in the hypothalamus on behavior? Why is this effect the most significant?
Zhou 1
Investment Policy Statement
This IPS is designed for a young investor less than a 28 years old with the investment beliefs and principles. The primary objective of this investment policy statement is mainly aimed to monitor portfolio allocation against holding limits, and to consider personal situation make revisions to portfolio. What’s more, the main objective is mainly to achieve long term growth which is based on price appreciation. The purpose of the portfolio is to target annual returns of 12%. The annual and targeted allocation in order to target the return would be 60% stocks, 30% bonds and 10% cash. The portfolio’s rate of return is not guaranteed for the future investment and therefore, future returns may change over time. The portfolio will be rebalanced on annual basis. By using the five-year annual data for the different assets, investment holding period will be determined through annual review, efficient frontier and when an assent is inefficient, it will be replaced.
Stock-Trak Portfolio Report
Investments Policy Statement for 25-year-old
Funds are going to be in are going to be invested in higher to moderate-risk investment opportunities that has equally greater to lower risk such as the NASDAQ and S&P 500, therefore, the investor seeks an annual return from this investment of approximately 12%. In order to achieve the target return, 40% equity in mid/small-cap stocks and 20% in International stock. 30% of the portfolio is to be Inter-Term Government Bonds and Corporate Bonds. The remaining 10% are going to held in cash.
Actual asset allocation will be allowed to vary within a reasonable range of plus or minus an absolute 5 percent or 15 percent of the target asset allocation. The portfolio is going to be rebalanced when actual asset allocation over the reasonable range.
Name: Ying Wang
Stock-Trak Report
Summary of Investment policy
Risk: Risk Averse
Time Horizon: Long-term
Portfolio Selection: Cash, equities and bonds
Shortw-term liquidity need: Yes
Portfolio Selection Rationale
According to modern finance theory, an efficient portfolio earns highest expected returns under certain risks and has lowest risks under certain expected returns. Because I am risk averse, my expectation is to beat inflation. I only invest 32% of money in equity and bond market. My portfolio includes 68% of cash, 21% of S&P 500 ETF (SPY), 8% of Vanguard bond market ETF (BND) and 3% of Antero Resources Corporation (AR).
For equity investment, I mainly follow passive investment strategy. S&P 500 index E ...
Mercer Capital | Valuation Insight | Corporate Finance in 30 Minutes Mercer Capital
Corporate finance does not need to be a mystery.
In this whitepaper, we have distilled the fundamental principles of corporate finance into an accessible and non-technical primer. Structured around the three key decisions of capital structure, capital budgeting, and dividend policy, the guide is designed to assist directors and shareholders without a finance background to make relevant and meaningful contributions to the most consequential financial decisions all companies must make. Our goal with this whitepaper is to give directors and shareholders a vocabulary and conceptual framework for thinking about strategic corporate finance decisions, allowing them to bring their perspectives and expertise to the discussion.
1. Running Head: Partners Healthcare
Partners Healthcare
Name of Student
Name of subject
Name of Instructor
Date
2. Table of Contents
Executive Summary ............................................................................................................................3
Problem Identification ........................................................................................................................3
Analysis..............................................................................................................................................4
Structure of Healthcare Partners System and Importance of Investment Returns...................................4
Motives behind the addition of Real Assets to LTP................................................................................5
Efficiency of Base-line Mix...................................................................................................................6
Mean-Variance Frontiers.....................................................................................................................7
Target Expected Returns.....................................................................................................................9
Recommendations..............................................................................................................................9
3. Partners Healthcare
Executive Summary
It is expected that this case is about the portfolio management of the Partners Healthcare and
provides a good understanding about the real estate portfolio management. Mr. Manning
managed long term pool assets in its portfolio such as REITs and Commodities which helps the
company to generate greater returns by the end of the year 2004.
In order to meet the stance of maximizing shareholders wealth, he is considering that whether
investing greater portion of the investment in long term pool will be a good move in future or not
with respect to the financial strategy as long term pool is providing greater return but it also
carries higher risk. For this purpose mean variance analysis and optimal portfolio analysis
performed in order to identify the impact of short term pool and long term pool such as REITs,
commodities futures, long term bonds, domestic equities and foreign equities at different mixes
which provides different returns and it also helps the company to identify the optimal mix.
Problem Identification
It is expected that many different investment pools have been established by the management of
the company which includes both short term and long term investment pools. The management
of the hospital invests the funds in order to generate desired expected return by minimizing the
overall risk of the portfolio. It is expected that short term investment pools is considered as a risk
free investment among the overall portfolio as it generates high quality fixed return.
4. However, the long term investment pools generates greater return as compared to the short term
investment pools but it also carries highest risk therefore the investment committee of the
Partners Healthcare is trying to identify an optimal portfolio mix which could provide greater
return by minimizing the risk.
Analysis
Structure of Healthcare Partners System and Importance of Investment
Returns
It is expected that management of the Partners Healthcare established a centrally designed pool
partners in order to generate greater return which could help the partners in order to satisfy the
need of different hospitals of the Partners Healthcare. The structure of the Partners Healthcare
system is comprised of all the physicians who could invest in the investment pool of the Partners
Healthcare the detailed structure of the organization as follows:
It is expected that Partners Healthcare managed various centrally organized investment pools;
however, Mr. Manning had pursued only short term investment and long term investment pools
as short term investment pools are considered as low risk assets which generates 3.2% risk free
return annually. Whereas, long term investment pools are considered as risky pools which mostly
comprised of various type of equities.
It is expected that risk profile of each hospital is different therefore the Partners Healthcare
managed its investment pools according to the desired returns and expected risk tolerance level
5. of each hospital. The maturity period and expected return from the short term investment pools is
low and it provides low risk free return to its holders.
It is expected that long term investment pools are considered as risky assets with greater return
and greater maturity period as compared to the short term investment pools. Moreover the risk
appetite of each hospital; is different therefore each hospital investment as per its risk appetite in
order to generate greater return by minimizing overall risk of the portfolio.
It is expected that each hospital of the Partners Healthcare provides various healthcare services
across England therefore investment returns are more critical for each hospital as it provides
funds in order to satisfy the need of each hospital in a more timely manner. Therefore the
financial strategy with respect to managing investment pools is more important as each hospital
is considered as a non for profit organization and it involves greater number of stakeholder and
beneficiaries. Moreover, investing in financial instruments is also considered as more risky as
they got affected majorly in case of financial crisis and economic downturn therefore the
investment committee of the Partners Healthcare should formulate financial strategies with
respect to the investment pools as return from these investment pools satisfied the need of
community at greater level.
Motives behind the addition of Real Assets to LTP
It is expected that the investment committee of the Partners Healthcare introduced real assets in
the long term investment pools of the organization. As return from the each investment pools is
different and the assets include in the long term investment pools are considered as more risky
6. therefore management of the organization wants to identify such kind of investment which could
diversify the risk of the long term investment pools along with the suitable return as bonds and
stocks are more risky assets in current scenario. Therefore the main concern of the investment
committee is risk associated with assets of long term investment pools and in order to diversify
the risk of the overall portfolio they added Real Assets into the long term investment pool.
It is expected that Real Assets are considered as negative correlation assets as compared to the
other assets involved in the long term investment pool and past experiences shows that addition
of the Real Assets into the portfolio results in risk diversification of the portfolio therefore the
investment committee add Real Assets to the long term investment pool in order to minimize the
overall risk of the portfolio along with suitable return.
Efficiency of Base-line Mix
It is expected that current base line mix ignores real assets and other commodities and it includes
both short term and long term investment pools such as bonds, local and foreign equity. The
short term investment pools are considered as risk free assets and long term investment pools
includes risky assets. It is expected that the current base line mix of involves 15% of long term
bonds, 55% of domestic equities and 30% of foreign equities and the expected return for the base
line mix is 11.65% which calculated by multiplying the mix ratio of each assets with its expected
return.
It is expected that the expected return from the baseline mix is average and including real assets
into the investment pools would generate greater return as compared to the base line mix such as
7. expected return from the real assets is 12.5% which is clearly greater than the return of the assets
includes in the base line mix therefore current base line mix is not appropriate and including real
assets into the mix will provide greater benefits as compared to the existing mix.
This generates a moderate return of around 11.65% however, if we look at the expected return
when the allocation for the real assets was made in the LTP, then returns are expected around
12.5% were observed at specific allocation for all the five classes of the assets. Therefore, it can
be seen that the base line mix is not efficient and based on other allocations for the three classes
of the assets the expected return might increase.
By performing analysis while including different mixes it is expected that the allocation of 95%
in equities, 2.5% in long term bonds and 2.5% in foreign equity will generate 12.74% expected
return which is clearly greater than the existing mix.
Mean-Variance Frontiers
It is expected that the mean variance frontiers for each suggested scenario are calculated by
assuming different scenarios. The entire four possible scenarios are further constructed by
assuming different possible allocations of the investment assets in order to identify the mix that
could qualify the expected return along with minimizing the overall risk of the portfolio.
After identifying the optimal mix in each scenario, efficient frontier graph for each scenario is
also formulated against risk and return and it is clear from the graph and from the calculations
that the mix includes commodities and REITs will generate greater expected return while
minimizing the overall risk of the portfolio.
8. CASE D
US-
Stocks
Foreign
Stocks
Corporat
e Bonds
REITs Comm
odities
Expected
Returns
12.94% 12.42% 5.40% 9.44% 10.05%
Standard
Deviation
15.21% 14.44% 11.10% 13.54% 18.43%
Asset Allocation
Portfolio A
Proport
ion
B
Proporti
on
C
Proportio
n
D
Proport
ion
E
Propor
tion
Expected
Return
Standard
Deviation
1 0.85 0.050 0.050 0.025 0.025 12.13% 14.54%
2 0.8 0.050 0.100 0.025 0.025 11.75% 14.34%
3 0.7 0.100 0.100 0.050 0.050 11.31% 13.88%
4 0.6 0.150 0.150 0.050 0.050 10.91% 13.63%
5 0.5 0.175 0.175 0.075 0.075 10.30% 13.09%
It is also clear from the calculations that the portfolio includes commodity futures will generate
greater return as compared to the portfolio having REITs but is carries much higher risk as
compared to the mix that includes both commodity futures and REITs in investment pools.
12.13%, 14.54%
11.75%, 14.34%
11.31%, 13.88%
10.91%, 13.63%
10.30%, 13.09%
13.00%
13.20%
13.40%
13.60%
13.80%
14.00%
14.20%
14.40%
14.60%
14.80%
10.00% 10.50% 11.00% 11.50% 12.00% 12.50%
AxisTitle
Axis Title
EFFICIENT FRONTIER
Standard Deviation
9. Target Expected Returns
It is expected that if the hospital H wants to achieve a target return of 10%, then in case of
including commodity and excluding REITs, the management should invest 5% in short term
investment pools, 15% in US stocks, 35% in foreign stocks, 15% in long term bonds and 30% in
commodities.
In case of including REITs and excluding commodities the management should invest 5% in
short term pools, 25% in US stocks, 25% in Foreign stocks, 5% in long term bonds and 40% in
REITs which will generate greater return even form the case in which commodity includes.
In case of including both REITs and Commodities the management should invest 5% in STP,
25% in US and Foreign stocks, 12.5% in long term bonds and REITs and 20% in commodities in
order to generate expected returns.
Recommendations
By performing different calculations assuming different mixes and different portfolios it is
recommended that the Investment Committee of the organization should incorporate real assets
into the long term investment pools as it would generate greater return by minimizing overall
risk of the portfolio.