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FINA 3904 Project 2 Ryan ReviaB.a.Blackboard Version: 38 (mid-range moderately aggressive) Text Book version: 79 (low end of aggressive)Although the textbook places me at the low end of aggressive investing, I believe that the Risk Tolerance survey was more indicative of my overall risk tolerance, placing me in the middle of the moderately aggressive category. After evaluating each result, I have determined that my overall risk tolerance is moderately aggressive, but leaning towards an aggressive risk tolerance.B.b. B.c.1.PercentTicker SymbolAsset TypeStyle Box CellStock/Fund/ETF Name120.07%RPMGXStock FundMid/GrowthT. Rowe Price Mid-Cap Growth215.08%POAGXStock FundMid/GrowthPRIMECAP Odyssey Aggressive Growth310.19%VMCIXStock FundMid/BlendVanguard Mid Cap Index 148.01%FHKCXInternational Stock FundLarge/GrowthFidelity China Region510%VBKETFSmall/GrowthVanguard Small Cap Growth ETF68%SLYETFSmall/BlendSPDR S&P 600 Small Cap Growth ETF76%PIDInternational ETFLarge/BlendPowerShares Intl Div Achiev ETF=77.35%Total Common Stock89.01%STWTXLong-Term Corporate BondLow/ExtensiveSchroder Broad Tax-Aware Value Bond Inv93.01%DEEIXCorporate BondMid/ModerateDelaware Extended Duration Bond Inst=12.02%Total Corporate Bonds105%PYGNXIntermediate Government BondHigh/ModeratePayden GNMA5%Total Government Bonds115.63%CashT-Bills (Cash)=100%TotalB.c.2.The asset allocation chart provided by confirms the consistency of my allocation goals as determined by my moderately aggressive to aggressive leaning risk toleration. Although there is slight variation in percentage values due to fees and certain funds carrying excess cash, the portfolio matches the projected allocation within a percent, allowing for the correct diversification of assets as based on the aforementioned risk tolerance results. B.d. Largest Equity Fund Allocation1. Fund Ticker Symbol & Name: RPMGX T. Rowe Price Mid-Cap Growth2. Morningstar Style Box: Mid-Cap Growth3. Morningstar Analyst’s Rating: Gold4. NAV, Date of NAV, and Shares Purchased: $81.31 as of 11/20/2014, 1,234 shares purchased5. Number & Type of Securities within the Fund: The fund has 133 (long) stock holdings across the cyclical, sensitive, and defensive sectors.-Cyclical Sector: Basic Materials- 2.78%Consumer Cyclical- 12.26%Financial Services- 7.11%Real Estate-1.02%-Sensitive Sector:Communication Services- 1.06%Energy- 6.85%Industrials- 26.82%Technology-16.69%-Defensive Sector:Consumer Defensive- 4.11%Healthcare- 20.59%Utilities- 0.71%6. Morningstar Stewardship Grade: A7. Asset Allocation among Asset Categories: 8. Morningstar Rating: a) 3 year= Four Starsb) 5 year= Four Starsc) 10 year= Five Starsd) Overall= Five Stars9. Morningstar Risk Rating:a) 3 year= Below Averageb) 5 year= Below Averagec) 10 year= Averaged) Overall= Average10. Morningstar Return Rating:a) 3 year=Above Averageb) 5 year= Above Averagec) 10 year= Highd) Overall= High11. Load Percent: Not Applicablea) Initial: N/Ab) Deferred: N/Ac) Redemption: N/A12. 12b-1 Fee Percent: 0.00%13. Net Expense Ratio: 0.78%14. Turnover Percent: 26%15. Trailing Total Return & Rank:a) 1 year= 17.47%, #30b) 3 year= 21.04%, #26c) 5 year= 18.28%, #16d) 10 year=11.33%, #7e) 15 year= 9.96%, #1916. 3-Year MPTS:a) Alpha= 3.49b) Beta= 0.86c) Sharpe Ratio= 1.65d) Sortino Ratio= 3.3317. RPMGXB.e. Largest Corporate Bond Fund1. Fund Ticker Symbol & Name: STWTX Schroder Broad Tax-Aware Value Bond Inv2. Morningstar Style Box: Mid/Extensive 3. Morningstar Analyst’s Rating: Not Available4. NAV, Date of NAV, and Shares Purchased: $11.03 as of 11/20/2014, 4,079 shares purchased5. Number & Type of Securities within the Fund: The fund has 151 (long) bond holdings across several sectors:-Government- 6.34%-Corporate- 5.46%-Securitized- 1.18%-Municipal- 85.26%-Cash & Equivalents- 1.76%6. Morningstar Stewardship Grade: Not Applicable7. Asset Allocation among Asset Categories: 8. Morningstar Rating: a) 3 year=Five Starsb) 5 year= N/Ac) 10 year= N/Ad) Overall= Five Stars9. Morningstar Risk Rating:a) 3 year=Averageb) 5 year= N/Ac) 10 year= N/Ad) Overall=Average10. Morningstar Return Rating:a) 3 year= Highb) 5 year= N/Ac) 10 year= N/Ad) Overall=High11. Load Percent: Not Applicablea) Initial: N/Ab) Deferred: N/Ac) Redemption: N/A12. 12b-1 Fee Percent: N/A13. Net Expense Ratio: 0.46%14. Turnover Percent: 8%15. Trailing Total Return & Rank:a) 1 year= 14.00%, N/Ab) 3 year= 7.58, N/Ac) 5 year= N/Ad) 10 year= N/Ae) 15 year= N/A16. 3-Year MPTS:a) Alpha= -1.22b) Beta= 1.87c) Sharpe Ratio= 1.06d) Sortino Ratio= 1.8217. STWTXB.f.a Within Category DiscussionBy using a mid/small cap portfolio style, I established a moderately aggressive portfolio with a high concentration of stocks (at 77.35%), then modestly investing in high duration corporate bonds (12.02%) and government bonds (5%), while leaving 5.63% of my portfolio in cash. Within stock funds, I focused primarily in the small-mid growth sector, while diversifying my holdings with a lesser allocation of small and large blend funds. Furthermore, I used primarily growth ETFs like VBK to leverage an existing long position in the Vanguard USD index, allowing me to maximize indirect derivative securities. Although the portfolio concentrated on small-mid cap, and thus higher risk, companies, the funds were also screened to maximize the best ratings in categories like expenses & fees, analyst ratings, and alpha, or return above expected return. In addition, the highest allocation in Bonds occurred in the extensive interest rate sensitivity to mid-range credit quality. This was due to the higher duration bonds that I targeted, which while increasing the potential gains, also leads to greater interest rate risk. The bonds additionally were screened to minimize fees & expenses, while still meeting risk tolerance specifications in lower credit quality ratings like BBB.B.f.b. International DiversificationThe portfolio was screened additionally to disperse smaller portions of the allocation into more aggressive or developing regions like Asia, while maintaining stability with 83.04% of the portfolio’s investments in North America. In addition, the use of an international derivative allows additional leverage, while also imposing the required risk of the portfolio goals. Furthermore, investments in relatively stable European assets helps to diversify the risk of the overall portfolio. ................
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