AustinAnne Corp Stocktrak Report- Final Edition

AustinAnne Corp Stocktrak Report- Final Edition -...

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AustinAnneCorp Stocktrak Report nne Karam and Austin Wen NA 4310
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I. Team’s Investment Strategy Our initial portfolio consisted of 50% domestic stocks, 35% international equities, 5% bonds, 5% commodities, and 5% cash. We chose to base our portfolio on large cap growth stocks that we felt would remain strong in a volatile economy. We chose stocks from different industries to keep our portfolio diversified. We began by purchasing from the oil (ExxonMobil), telecommunications (Comcast, Verizon), utilities (Entergy), technology (Google), consumer goods (J&J, YUM), and finance industries (Berkshire Hathaway, Morgan Stanley bonds). We also purchased multiple international securities we thought would succeed, such as Tata Steel. Our initial benchmark was comprised of 50% S&P500, 35% Russell Global Index, and 5% Barclays Capital Aggregate Bond Index (“BCABI”) to characterize our main portfolio investments. Over time, we began to shift money from our international stocks into our large cap domestic stocks. With the exception of Tata Steel, most of our highest return securities were from our domestic stocks so we began to shift money into our domestic securities. Google, Yum brands, and Comcast provided steady, high returns with low risk. We continued to keep our securities diversified across multiple industries. As we shifted money from our international securities into more domestic securities, we changed our benchmark to 60%S&P500, 35% Russell Global, and 5% BCABI. Our strategy remained relatively constant throughout the eleven weeks. II. Portfolio Overall Return and Risk Characteristics Our holding period return for our portfolio was 11.857%. This means that over the course of the 11 weeks we held our portfolio, our portfolio earned an 11.857% return. Our average weekly portfolio return was 1.03% and our annualized average portfolio return is 53.70%. The average
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weekly market return was 1.101% and the average annual market return is 57.27%. This means that looking solely at returns, our portfolio produced lower average returns than the market. Our benchmark’s average weekly return was 1.165% and our benchmark’s average annual return is 60.60%. This means our benchmark’s weekly and annual average returns were higher than both our portfolio and the market. However, these returns are not risk-adjusted, so it is important to look at the Sharpe ratios to gain a better understanding of risk-adjusted returns. Our portfolio weekly standard deviation was 1.391% and our portfolio annualized standard deviation was 10.032%. This means that on average, our weekly return varied from our mean portfolio return by 1.391%. The market’s weekly standard deviation was 1.70% and its annualized standard deviation was 12.26%. Our benchmark’s weekly standard deviation was 1.47% and its annualized standard deviation was 10.64%. The standard deviation helps us investors to assess the risk of our portfolio. Our low standard deviation means our portfolio had relatively low risk, as our weekly returns usually only varied from our mean weekly return by
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This note was uploaded on 06/06/2011 for the course FINA 4310 taught by Professor Staff during the Spring '08 term at University of Georgia Athens.

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AustinAnne Corp Stocktrak Report- Final Edition -...

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