Investment portfolio Performance Evaluation

Australia has been experiencing difficult economic circumstances due to significant inflation over the last 12 months. Without a sure, the inflation rate will remain below 2% until 2018. There has also been a devaluation in the currency during the last four years. The depreciation rate has been below the national average. The Australian dollar has depreciated versus the US dollar. The Australian dollar declined 7% against the US dollar in 2015, according to the Turner and Townsend research.

Volatility is especially prevalent from August through October. The stock market in July performed really well and it set up good grounds for the months of August and September. The S & P had an increase of 2% in July. The stock market could be affected by a number of things including North Korea and geopolitical risks. There is always seasonal risk that investors have to be wary of in the month of August.

Equity Shares – Purchases




Caltex Australia Ltd




Commonwealth Bank of Australia




Cochlear Ltd








Domino's Pizza Enterprises Ltd




Flight Centre Travel Group Ltd




Macquarie Group Ltd




Magellan Financial Group Ltd




REA Group Ltd






Short Selling




AGL Energy Ltd














WAM Capital Limited




WAM Active Limited




Platinum Capital Limited





Beta shares S&P 500




Vanguard MSCI International Shares




SPDR World Ex Australia






Hedged Position for ASX Equity Investments (including short sales)

Futures contract value = $25 × 5,663 = $141,575

Net equity share exposure = $1,000,333 - $205,480 = $794,853

50% hedge of exposure requires buying 4 futures contract

Invest in settlement account = 4 × $20,000 = $80,000

The total amount to invest in the hedged funds will be $80,000

Cash holding = {($2,000,000 – ($1,000,333 + $699,640)}

= $ 2,000,000 – $ 1,699,973

= $ 300,027

Summary of investment portfolio outcome

Caltex Australia

As at July 10, 2017, the share price of Caltex Australia was $31.26 and by October 6, 2017 the share price had increased to $32.03. The share prices increased in mid-august. The share price increase to $33.51 it was due to the increase in the first half revenue from its ordinary activities. Moreover, the company’s profit after tax on ahistorical basis reduced by 17%. Caltex is a good value for any investors. The Caltex Australia share price is one to hold at the current share price. Therefore, an investor who wants to hold on to a stock for a long period should look for another portfolio.

Commonwealth bank Australia

The bank has a share price of $82.81 on July 10, 2017. It started dropping from 16th august 2017 to $76.3 in October 6, 20171. The bank has been dealing with the laundering scandal which greatly affected its shares. The bank had a 3.8% decrease in its share price. It was after the government accused the bank of breaching the money laundering laws for over 53,000 times. Majority of the shareholders sold their shares given the scandal that the bank was facing.

Cochlear limited

Cochlear share price as at 10th July, 2017 was $153.14 and by 6th October 2017, the share price had increased to $163.02. In the month of august the share price had reduced was around $140.

CSL limited

The share price for this company on 10th July, 2017 was $133.32. By October 6th the shares had increased to $134.82. However, the share price had fallen to $125.02 on 16th august 2017.

Domino’s pizza enterprises

The share price on July 10, 2017 was $51.45. It increased shortly form July 12, 2017. It continued to before dropping again. However, it started to drop greatly and reached $45.61 by October 6, 2017. It started to grow again starting September 13, 2017. It is an indication that the share price could have increased growth in the long term. Domino’s is a great investment since it has increased outlets.

REA group

The share price was $63.35 and has been increasing over the three months. By October 6th, 2017, the share price stood at $66.50. The client is bound to get high returns in the investment has been increasing over the last three months reaching a high of $69.97 on 1st august 2017. REA group has reached an all-time high share price in the past five years. There is no doubt that the share price will remain in a good position over the long term. Therefore, it is an appropriate investment for the investor to make. Furthermore, the returns will be worthwhile. It will be an ideal way to build wealth over time. The increase in share prices will help in increasing earnings.


There are portfolios that the need modification because their tremendous drop in share price. A portfolio that has is lower than the initial share price will only lead to huge loss in the investment. Therefore, it is necessary to do few modifications to have a successful portfolio. The first thing that an investor should do is to keep the investment turnover at a minimum. The short term market can be volatile and is only recommended for investor who have a clear understanding of the market. Investors who hold stocks over a long period have a chance of increasing their earnings per share. Secondly, investors can reduce their investment costs. A small amount can grow up to hundreds of dollars in a year. Therefore, investors needs to exercise caution before investing even a dollar in stocks. It can have adverse effects. Finally investors needs to diversify their investments. It is not advisable to invest on a single investment. With a single investment, one can lose their entire principal amount. A successful investment portfolio is one which is not affected by only one company.

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