Zeus investment philosophy is based on the belief that superior investment results can be achieved over many years by following a conservative, risk- averse, quality-oriented approach to investment management. In other words, the firm uses active approach to investment management, which means the primary job of portfolio managers is to deliver the best possible performance relative to the benchmark’s performance working Within the risk and Other constraints specified in the client’s mandate.
In detail, the equity fund aims to eek long-term growth Of capital through investments in a high quality portfolio of stocks, whose earnings are expected to grow at above-average rates. That is the growth investment style of active management. Besides, the bond fund seeks to maximize total return in a way that was consistent with the preservation of capital, which is done through an actively managed portfolio of high quality. However, the balanced fund seems to be a little different, since its objective is to minimize risk while generating competitive returns over longer periods, which is more like a semi-active approach, 2.
Who are Zeus primary investors? Zeus Asset Management serviced both institutional and individual investors. The institutional clients were consisted mostly from 2 parts, foundations & endowments, and corporations. The individual investors were typically risk- averse, high-net-worth and would like to grow their assets over long-term, There was a minimum requirement of $2 million for individually managed account. Poor these clients, Zeus customized portfolios according to clients’ investment objectives and special requirements, then balanced the horizon and volatility of their portfolios. R others who did not meet the minimum requirements, or those who wished to invest in a specialty fund, Zeus also had multiple mutual funds focusing on domestic equity, bond and international equity market. The firm also provide balanced fund which consisted of high-quality equities and fixed-income securities. 3. Describe the advantages and disadvantages of Zeus current investment process. Advantages: As a new director was hired, he began a new investment process to establish portfolios, and developed a stricter policy to manage the portfolios. This change enhanced the monitoring and controlling of the company’s main holdings.
Current investment process helped identify high profitability equities and bonds, which were constructed into portfolios that minimize risks and generate more competitive return as well, Of course, the investment process would help the company establish its internal rules regarding the level to risk and return, and make the firm even more attractive to its relatively risk-averse clients. Disadvantages: Although the current investment process did make big achievements compared to the process before changed, it might cost more time and intelligent for fund managers to do so.
Pound managers would also found limitations when they instruct their portfolios. For clients, they might have to pay more fund charges and operating fees. 4. Evaluate the performance Of Zeus equity, bond, and balanced funds Equity funds During the first superior, the equity fund underperformed both the 500 index and the Lipped Growth Index because of a weak cash policy. At the end of superior 1 , both a new process to screen stocks and a stricter investment policy to manage the equity portfolios were developed, thus enhancing the monitoring and controlling of core holdings.
In the second superior, Zeus equity funds earned a much higher return than the first superior, Compared tit Lipped Growth Index, the equity funds had an annulled return of 24. 44% versus the Lipped with 24. 38%, which indicated that Zeus performed a little bit better than the Lipped Growth Index, but still underperformed the S&P 500 index, When looking at Sharpe ratio and Trenton ratio of the equity funds and Lipped, it was obvious that Zeus also outperformed Lipped on a risk-adjusted basis.
What’s more, the equity funds and Lipped Growth Index were very similar on not only the performance, but also the moving trends of the performance. Thus, Lipped Growth Index was proved to be an appropriate benchmark for the valuation of the equity funds. In one word, Zeus equity funds outperformed the relevant Lipped Growth Index on both an absolute basis and a risk-adjusted basis. The current investment-process and performance-evaluation measures were proper to the firm. The table below shows some statistics computed from monthly returns of Zeus equity funds, S;P 500 Index, and Lipped Growth Index during the given period.