Question 1 – ASSET ALLOCATION
The following report and its contents outline the asset allocation of charity X to be submitted on 25th May 2015.
Strategy Overview
A balanced asset allocation has been formulated with Australian and US equities, as well as cash and government bonds. This medium-term investment strategy will generate the best possible (while conservative) rate of return.
In order to ensure that we achieve a well-diversified allocation in terms of securities and global market exposure, we have imposed a number of restrictions. These restrictions are:
Restrictions
1. No single asset should contain more than 10% of the portfolio as declared by the board of directors.
2. Total investment in Australian equities must not exceed more …show more content…
CBA maintains itself as a highly profitable company with a high annual dividend yield of 4.89%. Additionally CBA has a relatively low price-earning ratio of 15.4, placing it as a conservative company that remains a good investment location. Its conservative nature runs in line with the intent of the portfolio, and so we have accordingly allocated 6% of total assets.
AGL Energy Limited (AGK)
Price: 16.230
Daily Volume: 4,644,835
Shares: 674.71m Market Cap: 10.95bn
Annual Dividend Yield: 3.88%
P /E: 15.620
Being one of Australia’s influential and leading renewable energy companies, its market capitalization is $10.95 billion. Additionally it is the largest privately owned, operated and developer of renewable generation assets. With a low debt to equity ratio, and a healthy dividend, this company maintains itself as a good investment. The growth in stock over the last year has remained positively steady, and accordingly, we have allocated a moderate amount of 6%.
BHP Billiton (BHP)
Price: 29.590
Daily Volume: 16,585,697
Shares: 3.22bn Market Cap: 95.41bn
Annual Dividend Yield: 4.97%
P /E:
The following report and its contents outline the asset allocation of charity X to be submitted on 25th May 2015.
Strategy Overview
A balanced asset allocation has been formulated with Australian and US equities, as well as cash and government bonds. This medium-term investment strategy will generate the best possible (while conservative) rate of return.
In order to ensure that we achieve a well-diversified allocation in terms of securities and global market exposure, we have imposed a number of restrictions. These restrictions are:
Restrictions
1. No single asset should contain more than 10% of the portfolio as declared by the board of directors.
2. Total investment in Australian equities must not exceed more …show more content…
CBA maintains itself as a highly profitable company with a high annual dividend yield of 4.89%. Additionally CBA has a relatively low price-earning ratio of 15.4, placing it as a conservative company that remains a good investment location. Its conservative nature runs in line with the intent of the portfolio, and so we have accordingly allocated 6% of total assets.
AGL Energy Limited (AGK)
Price: 16.230
Daily Volume: 4,644,835
Shares: 674.71m Market Cap: 10.95bn
Annual Dividend Yield: 3.88%
P /E: 15.620
Being one of Australia’s influential and leading renewable energy companies, its market capitalization is $10.95 billion. Additionally it is the largest privately owned, operated and developer of renewable generation assets. With a low debt to equity ratio, and a healthy dividend, this company maintains itself as a good investment. The growth in stock over the last year has remained positively steady, and accordingly, we have allocated a moderate amount of 6%.
BHP Billiton (BHP)
Price: 29.590
Daily Volume: 16,585,697
Shares: 3.22bn Market Cap: 95.41bn
Annual Dividend Yield: 4.97%
P /E: