FINC6600 Written Assessment – Semester 2 2023
Deadline: Sunday 29 October (11.59pm Sydney time) Weight: 30% (Group assignment)
Introduction
Continuing the work developed in the previous 8 weeks, your group is now tasked to develop a pitch deck supporting a final international portfolio recommendation. The final portfolio should be a rebalanced version of the one previously submitted as a video presentation and subject to the same constraints we have been working with since the start of the project:
• Three investment jurisdictions: US, Europe, and Emerging economies
• 10% - 50% of the total funds available (AUD$100 million) invested in each jurisdiction
• Goal of each local (jurisdiction) portfolio is to outperform the local benchmark: , Stoxx 600 for Europe, and
• 50 stocks (10 in each of 5 sectors chosen) for each local portfolio and selected from the corresponding benchmark
• No short-selling allowed
• Investment horizon of one year
For the pitch deck, consider that your team will be representing one of the following asset management firms (the allocation will be provided by your facilitator):
1. BlackRock
2. Vanguard Group
3. Fidelity Investments
4. UBS Asset Management
5. State Street Global Advisors
Hence, your group will be pitching for the above investment product (that is, the international portfolio) on behalf of one of the largest asset management firms in the globe – that provides you some context in relation to what is expected in the pitch deck.
Pitch deck vs pitch presentation: the difference
Your team has already worked on a slide deck that was presented as part of the video presentation. The pitch deck that will be submitted can build on that however will need to be substantially different, though. Why? Because the final pitch deck should be considered as a standalone document that will guide the decision of your client without a presentation as done in the previous assessment (in the same vein that a business report would). Hence, your final pitch deck must contain much more information and detail than one would expect in a typical slide deck. Check the links below for a few examples of the type of the pitch deck that your group should aspire for:
- BlackRock 2023 global outlook Q2 update:
- Fidelity quarterly market update:
- Invesco midyear investment outlook:
- HSBC 2022 midyear investment outlook
mid-year-outlook-brochure-2022-retail.pdf
- Guggenheim macro themes for 2023:
As you can notice, the slide decks in the links above are more detailed and contain information to a level that somehow dispense with the need for a presentation altogether. We will provide general guidelines and instructions to help you create the slides.
What goes into your slide deck: contents
Your pitch deck must have the following covered:
1. Executive Summary and Portfolio Recommendation Overview: An overall summary of the presentation and an overview of the final portfolio recommendation.
2. Team and Firm Introduction: A justification / marketing of your allocated Asset Management Firm. Information relating to the performance of the appropriate business segment of your allocated Asset Management Firm and the skills / expertise of the team members.
3. Market Insights Overview: A top-down analysis of the current macroeconomic environment, from a global perspective down to individual countries that you include in your portfolio.
4. Investment Objective: The aim of the portfolio being recommended and overall restrictions of the investment mandate.
5. Capital Markets Assumptions: The expected returns and risk for the asset classes (that is, the local benchmarks e.g. S&P500, Stoxx 600, and MSCI Emerging Markets Index), including the methodology used to generate them. Communicating a rigorous process to investors is an essential component of a fund deck.
6. Portfolio Construction: Methodology behind the allocation of the capital across the jurisdictions.
7. Sectoral Portfolio Allocation: Methodology and frameworks adopted for capital allocation across sectors. Comparison to relevant benchmarks should be explored whenever possible.
8. Security Selection: Drivers / methodology used for stock picking with particular attention to factor investing. Appropriate justifications may include, where deemed appropriate: industry whitepapers, academic papers, backtests run by the group.
9. Performance and Risks: Performance of the portfolios indexed from the start of the semester to the most recent date should be shown. Appropriate performance metrics should be used, and commentary offered. A performance attribution decomposition should also be offered and commented on. Factor exposure / style regression can also be used where appropriate. An appraisal of the alignment between fund objective and realised risk/returns should be made. The group should consider the impact of the above on the decision to rebalance.
Pitch deck: structure
Your asset management firm requires all Board presentations to follow a common format. Your
slide deck must adhere to the following structure (with slight variations being allowed and 30-40
slides in total; the pitch deck should be submitted as a pdf file; all the slides should be numbered
and each contain the name of the student that worked on the corresponding topic):
Title page
o Includes logos, date, and title. Table of Contents
o Includes all sections in the presentation.
Executive Summary and Situation Overview
o Summary of the presentation and key macro views; overview of the investment process and key investment recommendations.
Team and Firm Introduction
o Team introduction and firm’s track record in managing portfolios similar to the one being recommended (plus other information about the firm represented like AUM and league tables, for example)
o The team introduction should contain a photo of each team member and a role/title associated with the work done throughout the semester.
5. Market Insights and macroeconomic analysis
o Charts and team commentary systematically describing recent global and country macro performance, and outlook over the investment horizon.
o Views should be situated relative to market consensus.
Investment Objective & Mandate
o Fund objective and constraints associated with the investment mandate. o Asset universe targeted including index specification.
Capital Markets Assumptions
o Expected returns and risk for the benchmarks considered
Portfolio
o Discussion of the methodology behind the allocation of capital across the three jurisdictions
Sectoral Portfolio Allocation
o Target allocation given adjusted CMA’s, adjustments to optimisation frameworks (e.g., Treynor-Black, Markowitz efficient frontier) should be outlined and justified.
10. Security Selection
o Discussion of security selection methodology with focus on factor investing and justification of the factors used/alignment with the macro views. Potential use of backtests in justifying the selection proposed.
o Sectoral exposure relative to benchmark should be discussed.
11. Performance & Risk
o Analysis the recent performance of the portfolios using, where appropriate, performance ratios, performance attribution, and factor exposure (among others).
o Analysis of the alignment between the risk realised and the objective should be conducted.
o Rebalancing decision and justification should also appear here.
Reference + Appendix
o Use appendix slides to address further details that are surplus to the requirements of the main slide deck but may be helpful in addressing investor questions.
