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Thompson Asset Management Case Solution & Answer

Thompson Asset Management Case Study Help

Introduction

Thompson has degrees in finance and computer science and wantedto join a quantitative asset management company, which was located in Chicago. After getting recruited by his desired company and serving in the company for five years, he gota certificate as a professionallyCertified Financial Analyst. He was now able to work with portfolio managers, in order to implement the strategies to identify the quantitative change. At the end of the year 2008, Thompson was unemployed due to the capital losses and crises in the assets of a company he had been working for, which led to him taking the decision of returning back to his hometown.(Banko, 2014).

Thompson considered himself as a market strategist who can handle all the unfavorable situations and predict the future of stock market. For this purpose, Thompson developed the Thompson Asset Management (TAM) fund, whichis a well-known name of an investment advisory firm; engaged in asset management, located in Jacksonville, Florida. The company was found by Allison Thompson in 2009. The company is focused on providing assistance to individual investors in operating two different funds currently. The company is well known for its high returns than the market benchmarks with risk downside.

Problem Statement

With an aim of extending business, Thompson is considering to focus on institutional clients, and is considering the option of providing his asset management services to a university. Thompson considers this opportunity to be in the best interests of the company, with an expansion towards the institutional clients. However, Thompson is required to create a presentation regarding the management of the 20 million dollars funds of the university.

Situational Analysis

The organization remained very effective in dealing with its two assets with Pro value finance centered at low risk and returns when contrasted with the Pro index finance. Despite the fact that the development in institutional segment could invent and create market position and returns of the firm, if the institutional assets are contributed productively. For introducing the venture plan for the college; Thompson needs to assess an estimation of each reserve of the institute independently, afterwards which he would be able to present an ideal speculation plan to the Landman.

Exhibit 4 of the case study provides an explanation of the statistics that has been calculated for the portfolio performance. By using this table and data that have been provided in the case, the Exhibit 1 of the document shown the values that have critically evaluated the return and risk features and appearances of the Pro Index Fund over the previous five years. Assume that the risk free rate is 2 percent.

Under Exhibit 4, there are many measures of risk and return, those returns and risks measures have some relationships that are under consideration to be discussed in this part. At the beginning, it is about the holding period return, in this case the investment is for 5 years due to availability of the data for last 5 years. This derived result shows that the stocks belong to the Pro Index, which have generated a total approximately return of 303 percent.In short, an investment of 100 dollars has generated the return of around 303 dollars for a given time period of 5 years. The returns over the last 5 years are improved as compared to the benchmark, i.e. S&P 500, which has generated a return of 105 percent, Pro Index has generated the returns more than twice in size than benchmark. The holding period return can be on a daily basis, therefore under the returns on a daily basis (working days) is given in detail for the period of 5 years. The calculations are shown in Exhibit 1 of the document…………………………

 

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