Risk Management and Investment II Essay Example | Topics and Well Written Essays - 4000 words

Risk Management and Investment II - Essay Example is will involve identifying the stock specific risk as well as explaining the asset allocation procedure that will be used in allocating a new asset to the portfolio. This part will comprise of the analysis of the past performance of the portfolio of investment portfolio. The portfolio comprises of stocks and bonds from 10 companies. The investment portfolio includes the I shares FTSE Bric 50 Fund, whose ticker is BRIC, the BP Plc whose ticker is BP., the TUI Travel whose ticker is TT, the Barclays PLC whose ticker is BARC, the Lloyds Banking Group PLC whose ticker is LLOY, the ETFS Gold whose ticker is BULP, I Shares MSCI Brazil USD ETF whose ticker is IBZL, the I Shares FTSE/Xinhua China 25 whose ticker is FXC. The bonds include the BT 5.75% 2028 Bond and Standard Chartered 7.75% 2018 Bond. This is described as an exchange traded fund whose main aim is tracking the performance of FTSE BRIC 50 closely. The performance from the stock investment is measured through the use of the net asset value of the given stock. The currency that will be used in this analysis is the United States dollar (USD). The details included an outline that the investment was established on January 1st 2011. In other words, this is the assumed inception date. The net asset value of the stock before the deduction of the charges that the fund managers are given the mandate to deduct from the funds on the 1st of January 2011 was 34.014801 dollars. This is quoted as the total return net asset value. The total net asset at that point in time of BRIC was 1,320,347,000 dollars (Blackrock Advisors (UK) Limited, 2013). The total number of shares that were issued at that time amounted to 41,200,000 shares while the benchmark level was 1414.2400. One year later, on January 2nd 2012, the total return net asset value amounted to 27.213216 dollars. The total net assets in that year amounted to 898,770,000 dollars. The total shares that were issued by then were 35,900,000 shares and the benchmark was