Wealth Mgmt

Investment Policy Statement

Assets Allocation

Products Selection

Prepared by:

Kamonrat ID: 5349019

Thaweechai ID: 5349022

Sorayot ID: 5349027

Thitiwut ID: 5349157

Athasarn ID: 5349030

Mutita ID: 5349085

MGMG589 Wealth Management, Task2

College of Management Mahidol University

Executive Summary

The objective of task 2: investment Policy Statement, Asset Allocation, and Selection of Wealth Management Products, is to have a meaningful first-glance experience on portfolio construction based on the client group’s preference.

We start from understanding/determining the client’s objectives in terms of risk aversion, time constraints, liquidity, unique circumstances, etc. The result of desired average return from the client is 11.7%. Thus, that is the minimum return we plan to achieve.

The Investment Policy statement consists of necessary and concise matters; return and risk objectives, constraints, market expectation on long-run asset returns and risks, determination of an asset allocation, criteria for shortlist equity and fixed-income mutual funds and also recommendation on the shortlists.

Based on 1 million baht investment, we take out 5% (50,000 baht) as cash reserve. The remaining 0.95 M. baht is used to evaluate the proportions in the portfolio. Using portfolio optimization simulation selected mutual funds; the recommended portfolio is as follows;

1 M. baht investment

1) Equity mutual fund (BKA2) 69%

2) Gold mutual fund (K-GOLD) 26%

3) cash reserve 5%

*** note that the portfolio optimization method is based on only calculation of equity mutual fund and gold mutual fund on a nominal amount of 0.95 m. baht, with a proportion of 72.8% and 27.2% respectively. To adjust with cash reserve 5%, the proportion of equity mutual fund and gold mutual fund change to 69% and 26%

The portfolio shows an expected return of 23.03%, standard deviation of 4.66%, and Sharpe ratio of 0.35, exceeding client’s...