The Performance of the Portfolio

1. The performance of the portfolio

By the end of the game, the total portfolio value for our group is $1,053,390.94. Dollar return is $ 53,390.94.Compareed to the S&P 500 return rate of 4.99%, the percentage return of the portfolio is 5.34%, which excesses the former. Based on the g known conditions, we can get a series financial data for this portfolio, such as Average Beta=0.84; The total Fixed Trading Fee = $2900( 58*50); 20% beta of excess return =$2295(( $53,390.94-$49900.00*0.84)x20%); Total Compensation= $5195 ($2295+$2900);The Net of Compensation Return of the Fund=$48195.94 ($53,390.94-$2295-$2900); Net Compensation Return Rate of the fund =4.82% ($48195.94/$1 million).

2. The selections for the portfolio.

Due to satisfy the demand by investors, our strategy to hold the value for each stock is to more than 30% of the initial cash. Because one investor, Mrs. Smith is a risk-averter, we do not invest in alcohol and tobacco industries. What is more, the majority of the stock's companies need to come from the S&P 500 firms. Another investor, Mr. Smith is risk-neutral and he seeks to the expected higher return with the high volatility of recent stock market. Based on his demands of the estimated beta of the fund portfolio, which controls the rank from 0.2 to 1.0, we selected the stocks from the following six sectors. Specifically, Technology and Consumer Services are two main sectors in our portfolio. We believed that with holiday shopping approaching and cyclical sales growth for particular companies, these sectors would give us the best opportunity to outperform the market. Therefore, we held the different percentage of our portfolio in Amazon, MacDonald, Costco, AutoZone, Ebay, Dollar General Foot locker, CVC Caremark Royal Bank of Canada and Lowe's as the component of services; as well as Apple, Google and Bidu as the components of Technology. However, some of them can not provide the huge return and even get the negative value, such as Google with the risk return of -0.25. Besides, for meeting the satisfaction to Mr. Smith with the great return, we held the position in financial sectors, including the Bank of America with the return of 18.15 and JP Morgan. For lowering the risk of portfolio, we held some others including Materials (Exxon), Industrial Goods (Chase Corp) and Consumer Goods (Priceline). In brief, all sector percentages ranged from-3.76%（Exxon） to 31.68% (Apple).

In this report, we emphases on analyzing main three leading stocks including Coach, Apple and Auto Zone. The reason for selecting Coach as the target is we exercised short-sell for shorting purposes. Although we loss massive benefit for wrong market expectation, the market value of this stock still reaches $151340 which is account for more than 40% of the total value ($615048.5). As for Apple, we can get the large benefit with the maximize return of 31.68%

...