Investment Project

Deliverables

  • Sign up form (one form for each group)
  • Three Stewardship Reports
    1. Stewardship Report showing the status of the portfolio as at midnight September 30, 2014 Remember to include
      1. The UISES report as of September 30, 2014. Make sure that it is dated September 30, 2014 and includes closing prices and interest on cash.
    2. Stewardship Report showing the status of the portfolio as at midnight October 31, 2014 This report should include all activity in the portfolio since inception. Remember to include
      1. The UISES report dated October 31, 2014
      2. Your graded stewardship report for September 30, 2014
    3. Stewardship Report showing the status of the portfolio as at midnight November 30, 2014 This report should include all activity in the portfolio since inception. Remember to include
      1. The UISES report dated November 30, 2014
      2. Your graded stewardship report for September 30, 2014
      3. Your graded stewardship report for October 31, 2014

Please consult the calendar for deadlines and due dates.


Form Investment Groups

Each investment management team is allocated a client portfolio with an initial cash balance of $1,000,000 times the number of students in the group. Thus a four member team is allocated a client with a portfolio of $4,000,000.

Each investment management team must form a corporate identity by submitting the group sign-up form provided in class.

Investment Requirements

  1. September 30, 2014.
    1. The portfolio must be 50% invested by September 30, 2014. This means that the value of purchases and sales must be at least 50% of the initial cash balance by September 30, 2014.
    2. The portfolio must have at least one short position.
    3. All transactions must be in US Dollars.
  2. October 31, 2014.
    1. The portfolio must be 90% invested byOctober 31, 2014. This means that the value of purchases and sales must be at least 90% of the initial cash balance byOctober 31, 2014.
    2. The portfolio must have at least one issue in which there is a realized capital gain or loss.
    3. All transactions must be in US Dollars.
  3. November 30, 2014.
    1. The portfolio must have at least one International equity issue and at least one currency transaction by November 30, 2014.
    2. The portfolio must have at least one International equity issue in which there is a realized capital gain or loss by November 30, 2014.

Stewardship Reports

Overview of the stewardship report.

Overview of the stewardship report procedure.

PreRequisite: Introduction to Equity Inventory Accounting

Template for Stewardship reports to be used with Introduction to Equity Inventory Accounting

Template for Multiple Currency Stewardship reports. The Stewardship Report shows a portfolio with positions in US Dollars, Euros, Pounds Sterling, Canadian Dollars, and Yen. Either this example or the Scripophily sample will provide you with a template.

Please note that the templates add the Stewardship Ribbon which includes most of the functions and shortcuts you will need to prepare your report. To activate you must enable the macros.

    Introduction to Equity Inventory Accounting is designed as a hands-on course in Stewardship preparation. Download the template and do lesson 1; then download a fresh template and do lesson 2; et cetera.
    1. Establishing the Portfolio
    2. The Long Position
    3. The Short Position
    4. The Book Value Calculation
    5. Income
    6. Out of Balance - Remedial Measures

Sample Stewardship Reports

The following sample stewardship reports shows the step by step evolution from a simple single currency portfolio to a global, multiple currency, portfolio.

Word to the Wise

  • Make sure that you master one step before you continue to the next one.
  • Each template and example contains comments to warn you against common pitfalls.
  • Each template and example contains red flags to warn you of out-of balance points.
  • Be sure that you check cells for formulae before you overwrite.
  • An out of balance report = F (F=0/20)
  • An out of balance report with the red flags removed to disguise the discrepancies = J (J=0/20)
  • Make sure that you understand how a Stewardship Report is constructed and the relationship between transactions and assets/liabilities before you continue to the next step. You should not be investing in non-US$ assets until October 31, 2014

Please note that the Stewardship reports are loaded as they are prepared. The November 30, 2014 report won't be there until after November 30, 2014. Until then, any file you pickup will probably be from last semester.
Sample Stew (Scripophily September 30, 2014) Sample Stew (Zymurgy  September 30, 2014)
Sample Stew (Scripophily October 31, 2014) Sample Stew (Zymurgy  October 31, 2014)
Sample Stew (Scripophily November 30, 2014) Sample Stew (Zymurgy   November 30, 2014)

* Note that the stewardship reports for dates in the furture will revert back to the corresponding stewardship reports from last semester. As we move forward in the calendar these will be replaced with this semester's stewardship reports.


Things to Remember

  • Remember that the template is a tool designed to assist you, it is not a plug-and-play guarantee. It is your responsibility to ensure that your stewardship report is clean and accurate.
  • Use a font of no less than 8 pts. PRINT AT 100% ON ALL PAGES If you print fit-to-page the font becomes microscopic and neither you, I, nor the client, can read it without using a magnifying glass. If in any doubt whatsoever stick with the Arial Narrow 10 in the template. Anything smaller will not be accepted. Print size is controlled in the [File][Page Setup] applet.
  • Use proper English. =PROPER() will convert PROCTER & GAMBLE to Procter & Gamble
  • The reason we print out a UISES statement is that we balance to it. So make sure the numbers are visible and that they balance.
  • The reason we include the previous report is so that we learn from our mistakes. Make sure that any mistakes in one stewardship report are correct in the report for the following month.
  • Check and double check your dividends. If the broker is guilty of failing to pay your client the dividends he has earned then you need to contact the broker asap. A simple email addressed to UISES specifying the
    • Issue name
    • Ticker Symbol
    • Ex-Date
    • Pay Date
    • Dividend Amount

    will allow the broker to correct his oversight before the end of the month.
  • Any dividends not payed as required will be reflected in an out of balance condition on the management report [Example]
  • The signature of the person who audited the report means that he takes responsibility for the accuracy of the numbers prepared by the group.
  • The signature of the person who proofread the report means that he takes responsibility for the professionalism of the report. This includes sloppy printing, missing headers, unaligned decimal places, mismatched fonts and font sizes, etc. so make sure you proofread from the printed copy, not from the computer screen.