Zeus Case Study Solution

Case Study : Zeus Asset Management Inc.

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What is Zeus’s investment philosophy? Zeus’s investment philosophy is based on the belief that superior investment results can be achieved over many years by following a conservative, risk-averse, quality-oriented approach to investment management. Team work was at the core of Zeus’s investment strategy: Portfolio decisions were made by an investment committee and administrative decisions evolved from teams of account administrators. Zeus uses active approach to investment management, which means the primary job of portfolio managers is to deliver the best possible performance relative to the benchmark’s performance working within the risk and other constraints specified in accordance with their client’s investment objectives. Special attention was also paid to tax issues, given the client’s holding period and profile. In general, high tax –bracket investors would not want the same securities that low tax-bracket investors might find attractive. For clients who wanted to invest in a specialty fund or who did not meet the minimum requirements for an individually managed fund ($2 million), Zeus had an array of mutual funds. The mutual funds were more efficient for some clients because of economies of scale in trading and transaction costs. The mutual funds included:  The equity fund, a medium to large capital growth fund, with its objective to seek long-term growth of capital through investments in a high quality portfolio of stocks, whose earnings are expected to grow at above-average rates. The bond fund, seeks to maximize total return in a way that was consistent with the preservation of capital, which is done through an actively managed portfolio of high quality, fixed income securities. Its weighted term of maturity was shifted by the bond managers between short, medium and long-term horizons and it maintained a minimum average quality rating of AA or higher at all times. The balanced fund, sought long–term...