Purpose

The purpose of this project is to give you real life experience on investment. In this project, you would first act as fund managers to construct, manage and advertise a fund of your own. Later, you would act as an individual investor to evaluate, compare and choose to invest in a fund created by a group other than yours. The score you receive in this project is solely determined by your performance in the first part of this project. However, bonus points will be granted to careful and wise investors as well as best fund managers.

Project Scenario

Today is Sept. 1st, 2015. Imagine you and your group members as fund managers with a starting pool of $500,000. Now, you would like to construct a fund to attract potential investors.

First, discuss and choose an investment goal of your fund. Then, from your investment goal, choose a proper investment style. For example, growth, value, GARP, market neutral, etc.. With goal and style determined, your group now should now form a portfolio. Your portfolio could contain the following securities/funds:

Individual stocks (both long and short positions are allowed)

Bonds

Mutual funds and money market funds Futures and forwards when necessary

Due to the limitation of our class material, you are NOT allowed to employ:

derivatives with exceptions of futures and forwards trade on margin direct investment on real estate To allow for fair competition, all funds should charge a flat 3% fee.

Requirement

Statement of the investment goal and style of the fund brief description of the fund portfolio; explanation of your fund portfolio – explain your security selection decision, your choice of security weight and asset allocation decision. Evaluate the performance of your portfolio report the annualized percentage return of your fund from Sept. 1st, 2015 to Dec. 7th, 2015.