Assume you are a fund manager. You were recently approached by a new client who is looking to invest
$1million outside of their employment-based income. Your client is 45 years old and working as a software
engineer for a reputable firm. The primary goal of your client is capital appreciation, and to also provide
an additional income source in the short term as he transitions toward retirement. Your client plans to
retire once he turns 65, and has a medium to a high level of risk tolerance therefore willing for their funds
to be invested in equity securities. Your client is looking for the development of an investment portfolio
with a capital growth perspective and are also concerned about ongoing income or the tax-effectiveness of
the portfolio.
Required:
a) Construct an investment portfolio for your client using the Portfolio Management Process steps
covered in Chapter 28: Investment Policy Framework.
b) For the equity portion of your asset allocation, use the top-down approach of fundamental
analysis from Chapter 17: (Macroeconomic and Industry Analysis), covered in week 2, to recommend the choice of stocks you planned to include in your client’s portfolio. Limit your choice of stocks to stocks listed on the Toronto
Stock Exchange.
c) In your company analysis, do a trend analysis of key performance ratios of firms you planned to
purchase for your client and comment on your findings. Your analysis should cover the period
2016 to 2020.
d) Conclude by explaining the vulnerability of your portfolio construction
