WEALTH MANAGEMENT

Wealth Management

Introduction1

Selected Investment Strategy1

Statement of Strategy2

Investment Portfolio2

Asset Allocation Approach2

Size and Composition of Portfolio2

Financial Asset Class3

Commodities Asset Class3

Brief Overview of the Portfolio Composition4

Hermes Pacific Investments Plc4

Lloyds Banking Group Plc5

Good Energy Group Plc6

African Copper7

Allocate Software Plc7

Allocation of Capital8

Macroeconomic Analysis9

Industry Analysis9

Country Analysis10

Political Risk Analysis11

Possible Influences on Investment11

Performance of Designed Portfolio11

Performance Optimization of Designed Portfolio12

Markowitz Framework12

Sharp Framework13

Professional Wealth Management13

Conclusion14

References15

Appendix17

Appendix A - Figures17

Appendix B - Tables20

Wealth Management

Introduction

The report provides a comprehensive portfolio management platform and investment plan for a given investment amount of £ 2million. The report starts with a brief explanation of investment strategy and investment statement for the designed portfolio. The report sheds light on the chosen approach to allocate targeted investment among chosen asset classes, as per each selected category i.e. financial and commodities.

In order to design a diversified portfolio, the amount of £ 2million is distributed among five securities and one commodity based on central tendency approach. Cash investment is made with an objective to earn Libor of 1%. Performance of the designed portfolio is managed by the incorporation of active portfolio management.

The report accesses financial times and official website of London Stock Exchange, as a credible source to collect relevant information. To provide better understanding of the designed portfolio, macroeconomic analysis is conducted to overview external factors that may influence portfolio investments.

Performance of portfolio is measured by evaluating three weeks performance of equities and commodity on LSE. Moreover, portfolio optimization is evaluated by deploying the framework of Markowitz and Sharp, in order to drawn conclusive remarks on the overall portfolio performance. Finally, a conclusion is drawn based on the overall designing and management of a diversified wealth management portfolio.

Selected Investment Strategy

In the current scenario, wealth management plan is managed via active investment strategy to closely observe and measure the daily performance of each portfolio component. Reasons of active investment management have been justified by providing critical evaluation of involved transactions and theoretical framework for portfolio decisions.

The objective of wealth management was to design a well diversified portfolio that pulls off a reasonable growth by preserving wealth of the investor. Prior to portfolio design and management, no excessive and exponential growth expectations were set, which was justified by the market analysis and assumed risk of portfolio investment.

In the light of socio-economic trends and recent analysis of external factors, the diversified portfolio is measured on the basis of conservative approach due to continuing economic down turn in the UK. Since 2007 till to date, the UK economy has improved at a snail's pace because of the gruesome effect of Euro zone crisis and lowering investor confidence.

Moreover, in the presence of a vague picture of the UK market forecasts, no big expectations can be made about the portfolio return either in the short run or the long run. However, fingers may still be crossed about slight improvements in the long run growth trend due to increasing level of initiatives at government scale to revive the economy by retrieving its pillars.

Statement of Strategy

To develop a diversified wealth management plan that aims to attain unpretentious ...