Zeus Case

Introduction

This report is aim to analyse the benefits of risk-adjusted performance measurements to Zeus Asset Management. Zeus Asset Management is a fund management firm founded in 1968 in Atlanta by Tir Jerry Schneider. It serves both institutional and individual investors and with more than $1.7 million assets under management. The director of research, John Abbot, is considering adopting risk-adjusted approach in performance assessment.

Zeus’s competitiveness analysis

Zeus’s main competitors are the mutual funds in particular market. Compared with those competitors, Zeus has strong competitive advantages.

Firstly, different from many managed funds of actively trading, Zeus’s investment philosophy is based on the belief that superior investment results should be achieved over many years by a conservative, risk-adverse, quality-oriented approach to investment management. This can be seen by its strategic asset allocation which focuses on medium to long term capital growth.

Secondly, Zeus is well known for its commitment to relationship-oriented services. The team devotes a lot in managing the client relationship. Thirdly, unlike most of its competitors, Zeus has a more skilled and experienced portfolio management group. More than 75% of its investment professionals were CFAs and received MBA from top business schools. The average age of the fund managers is 44 compared that with Fidelity of 26.

Moreover, Zeus has a large client base including mutual funds, trust funds, foundations and endowment, insurance companies, corporations and individual investors. Zeus pays special attention to their tax issues through carefully selecting the investment products best suit the client’s tax status.

In addition, Zeus has its unique approach in portfolio management. For example, in terms of the mutual fund, instead of each portfolio manager specializing in the municipal-bond market, one portfolio manager has the sole responsibility for that market. In that way, the...