Virtual Portfolio ProjectVirtual Portfolio ProjectFinance 450Finance 450

Quarterly (Final) Report Quarterly (Final) Report CommentsComments

OrganizationOrganization

Introductory letter to investors / Introductory letter to investors / stakeholdersstakeholders

Table of contentsTable of contents

Introductory sectionIntroductory section

Middle sectionMiddle section

Final sectionFinal section

Letter to InvestorsLetter to InvestorsAssume I am your largest and best informed Assume I am your largest and best informed investor, for both your management group and investor, for both your management group and the portfoliothe portfolioThis is your first quarterly report to me – describe This is your first quarterly report to me – describe what you think is relevant for me to know about what you think is relevant for me to know about your activities, both in terms of getting your your activities, both in terms of getting your management team up-and-running and in terms management team up-and-running and in terms of the management and performance of your of the management and performance of your team’s portfolioteam’s portfolio(In writing this letter, keep in mind that not only (In writing this letter, keep in mind that not only am I your largest investor, but I am also your am I your largest investor, but I am also your professor who wants to see that you were able to professor who wants to see that you were able to learn something from this project!)learn something from this project!)

Letter to InvestorsLetter to InvestorsSome specific questions to ponder:Some specific questions to ponder:– How well did you perform as a team?How well did you perform as a team?– How well did your portfolio perform?How well did your portfolio perform?– What challenges did you face?What challenges did you face?– What do you think worked for you? What do What do you think worked for you? What do

you think didn’t work?you think didn’t work?– What will you change / do differently in future What will you change / do differently in future

periods? What will you keep the same?periods? What will you keep the same?– What did you learn from the process?What did you learn from the process?

Introductory SectionIntroductory Section

Items to include and/or describe:Items to include and/or describe:– Group nameGroup name– List of group members’ namesList of group members’ names– Mission statementMission statement– Objectives Objectives – Constraints and appropriate benchmarkConstraints and appropriate benchmark

Middle SectionMiddle SectionDescribe / document the four steps of the Describe / document the four steps of the portfolio management process that you portfolio management process that you conducted throughout the quarter (conducted throughout the quarter (see see General Comments and Guidelines, as well as General Comments and Guidelines, as well as Reilly & BrownReilly & Brown):):1.1. Portfolio constructionPortfolio construction

2.2. Portfolio managementPortfolio management

3.3. Portfolio revisionPortfolio revision

4.4. Portfolio evaluation and performance Portfolio evaluation and performance assessmentassessment

Performance AssessmentPerformance AssessmentSome specific items to include are:Some specific items to include are:– What is the beta for your portfolio?What is the beta for your portfolio?

Is this beta consistent with your mission, objectives, Is this beta consistent with your mission, objectives, and economic outlook?and economic outlook?

– What is the Treynor Ratio for your portfolio?What is the Treynor Ratio for your portfolio?How does this compare to the Treynor Ratio for your How does this compare to the Treynor Ratio for your benchmark?benchmark?

– What is the estimated Jensen’s alpha for your What is the estimated Jensen’s alpha for your portfolio?portfolio?

– Analysis of this performanceAnalysis of this performanceDid you have “good” or “bad” performance? Did you have “good” or “bad” performance? What led to the performance you obtained What led to the performance you obtained (qualitative discussion and performance attribution (qualitative discussion and performance attribution analysis)?analysis)?

Final SectionFinal SectionExtension of performance analysis:Extension of performance analysis:– What is your largest company holding (long or short)?What is your largest company holding (long or short)?

How has it performed?How has it performed?Briefly discuss the prospects for this company, drawing on Briefly discuss the prospects for this company, drawing on research from at least three resources (incl. Value Line)research from at least three resources (incl. Value Line)Given these prospects, is the weight allocated to this Given these prospects, is the weight allocated to this holding consistent with your mission? If not, why not? holding consistent with your mission? If not, why not? What changes would you anticipate making in this holding, What changes would you anticipate making in this holding, if any?if any?

– What is your largest industry holding?What is your largest industry holding?How has it performed?How has it performed?Again, drawing on at least two resources, discuss the Again, drawing on at least two resources, discuss the industry’s prospectsindustry’s prospectsGiven these prospects, is the weight allocated to this Given these prospects, is the weight allocated to this holding consistent with your mission? If not, why not?holding consistent with your mission? If not, why not?What changes would you anticipate making in this holding, What changes would you anticipate making in this holding, if any?if any?