Financial Investment in Practice
Portfolio Report
Student ID – 21065217
Module Code: UMADEQ-15-M
Word Count: 3092
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1. Introduction
Portfolio creation is one of the crucial processes for measuring the market performance of
different companies based on the stock associated with the portfolio. Diversification can
significantly decrease portfolio risk by ensuring that the performance of one asset or asset
category does not impact the overall performance of your portfolio. The main aim of the
study is to measure the market performance of three different industries i.e., Pharma, Retail &
Banking in the UK. The companies considered here are AstraZeneca, Unilever Plc, and
Lloyds Banking Group respectively. The reason behind the selection of the aforementioned
companies is they are successful companies in their respective industries. Long-term growth
possibilities provide a strong incentive to invest in the company. Thus, the primary purpose
of the fund is to provide investors with earnings that outperform the FTSE 100.
Refer to Appendix 1 for the portfolio
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Figure 1: Portfolio of three companies
(self-created)
2. Macroeconomic Analysis
The current trends of UK economy rates have been in the growing trends, as well as
overwhelming the decreasing rates of economic growth in the UK (Abbas et al. 2019, p.54).
The graphs below depict major macroeconomic elements i.e., inflation rates, unemployment
rates, real GDP, and interest rates that will aid in the examination of the UK. Along with the
economies of the United States, Canada, and Australia have been likened to those of the
United Kingdom.
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2.1 Inflation rates
Table 1: Inflation rate
(Data.oecd.org, 2022)
Figure 2: Inflation rates
(Data.oecd.org, 2022)
As per the statistical graphs and table, it has been identified that the UK rate of inflation
generates a negative scarcity within the economic condition and failed to meet the SDG goals
as compared to other countries. However, the citizens of the UK face a huge loss in their
livelihood and wages on behalf of the actual range of share price and index valuation in cost
and income opportunities.
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2.2 Unemployment Rates
Table 2: Unemployment Rate
(Data.oecd.org, 2022)
Figure 3: Unemployment Rate
(Data.oecd.org, 2022)
The above-mentioned table and graphs identify the UK unemployment rate that falls at the
edge of the current year due to the high rise in economic scarcity and loss within the
infrastructures (Shen et al. 2018, p.78). Therefore, the UK needs to improve its overall
economic structure to boost its financial opportunities and production unit.
2.3 Interest rates
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Table 3: Interest rates
(Data.oecd.org, 2022)
Figure 4: Interest rates
(Data.oecd.org, 2022)
As per the above-mentioned table and graphs, it can be observed that the citizens of the UK,
have to face huge disruption in evaluating the interest rates within the country. This is
because of the country's declining share price and income opportunities or wealth.
2.4 Real GDP
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Figure 5: Real GDP
(Data.oecd.org, 2022)
The UK economy was gradually strengthening when Covid-19 emerged, causing a sharp drop
in Real GDP. Forecasts suggest that growth will increase until 2022, then begin to decline.
2.5 Economic Business cycle
Figure 6: Business Cycle
(Fidelity, 2022)
The economic cycle indicates how countries are functioning economically. The United
Kingdom is presently nearing the end of its expansion cycle; nonetheless, sustainable growth
should continue. Because earnings are gradually declining, value firms are more suited for
investment. Companies that have performed well over the prior three to twelve months
should continue to do well, according to momentum theory.
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Figure 7: World Map
(Bloomberg, 2022)
The financial condition of the UK index in past some years is provided in the above graph
that depicts the recession index and financial index of the country. With the help of the above
map, it is identified that the UK has also faced economic and financial crises same as the
other countries of the world (Khosraviet al. 2020, p.38). From the map, it can be said that due
to the Covid-19 pandemic the same situation has been created for the country in 2020 where
they have faced difficulties in maintaining their economic condition of the country. Similarly,
the US has faced the mid-economic cycle with multiple indicators that suggest the proper
economic growth and capacity boost the level of production. This is because of global
business expansions and its ongoing procedure to expand the business and approach towards
reaching huge business benefits.
2.6 Implications
1. In the context of inflation rates, it can be observed that the increasing trends of inflation
rates have been beneficial for identifying more goods and income opportunities.
2. In such a case the economy of the country is still identifying its actual budget and
increasing the growth rate of tech companies.
However, the macroeconomic factors are likely to indicate the rapid growth trends of the
economy to better perform within the business. As a result, the company's valuable source of
data and shared valuable information generate a huge impact throughout the world rather than
in the UK, Australia, Canada and the USA.
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3. Industry analysis
3.1 Competitive Industry Analysis
The comparative industry analysis can be done based on the below-provided graph which
shows the performance attained by three different industries. The industries are banking,
pharma, and consumer goods. Hence, a strategic analysis of the competitive industry is
provided below:
UK industry
Figure 8: Relative rotation graph
(Bba.Bloomberg, 2022)
A relative rotation graph is depicted above that shows the marketing performance of the three
industries. Based on the graph it can be seen that the market performance of the industries is
good since the UK economic conditions are suited to the businesses of the companies
(Greenwood and Warren, 2022, p. 27). However, the graph also shows an inconsistent
performance attained by the companies due to the external factors in the industry. Moreover,
in the pandemic situation, AstraZeneca has benefited more in comparison to Unilever and
Lloyds due to having more demand for drugs in the national and international markets of the
UK.
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Figure 9: Industry performance
(Ftserussell.com, 2022)
The benchmark averages of three industries are depicted in the above figures which show the
FTSE index of all the industries. The total return of the market is quite impressive in the
pandemic situation, which portrays that the companies have been less impacted by the
pandemic. The higher performance of the industries can be measured by their total returns
which the total return of the pharma industry is 3.15, the banking group is 0.81, and the
consumer industry is 0.55. This depicts that the total return of the pharma industry is very
high, which means they have achieved a competitive advantage in the market during the
pandemic situation.
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Figure 10: Industry performance
(Tradingeconomics, 2022)
The industry success of the three firms may be examined using the above graph, which
illustrates the price changes of the companies over time. The associated companies in the
above figures are part of the UK's FTSE 100 index, which is represented by the graphic
above. Furthermore, the price fluctuations of Unilever, AstraZeneca, and Lloyd are displayed
in the graph, and the image may be used to analyze their performance (Hammaet al. 2020, p.
43). According to the preceding graph, AstraZeneca's FTSE 100 price in 2022 is 10,304,
Unilever's is 3609.50, and Lloyd's is 43.84. This indicates that AstraZeneca's industry
performance is quite impressive in contrast to both firms. The graph above depicts the
currency performance of the aforementioned industries in the UK market. Based on the given
data, AstraZeneca's yearly return is 23.82%, Lloyd's is -6.72%, and Unilever's is -15.30%.
The data shows that the pandemic has had a negative impact on Lloyd and Unilever's
companies, whereas AstraZeneca has expanded significantly. However, one of the drawbacks
of the data presented above is that it may alter according to changes in the country's trends
and economic situations.
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Figure 11: Industry Beta
(Pages.stern.nyu.edu, 2022)
The beta of the three industries chosen is shown in the graph above, along with the P/E ratio,
unlevered beta, and total beta of the industries. According to the graph above, the average
beta of the pharma business is 1.16, banking is 0.46, and consumer goods is 0.31, indicating
that stock volatility is significant in the pharma industry. However, the beta of the
pharmaceutical business is particularly high due to its great market performance. As a result,
the amount of risk is high in the pharmaceutical business, whereas it is constant in other
industries due to reduced market volatility. Volatility reflects the quick price swings of firms
in the industry, as the more the price changes, the greater the volatility in the company's
stock. Furthermore, volatility is a sort of risk for businesses since price fluctuations can result
in considerable losses. As a result, the assessment of industry beta across all three industries
shows that the beta of the pharmaceutical business is higher than that of the other industries.
This indicates that the company's operations in the pharmaceutical industry are inherently
risky.
3.2 Fund Holdings
Figure 11 shows that AstraZeneca's market performance is relatively high in comparison to
other firms. This is because, during the Covid 19 pandemic, pharmaceutical demand was
higher than demand for financial services and consumer items. Furthermore, regardless of the
pandemic, the firms' yearly profits are remarkable (Han, 2021, p. 33). As a result, for the
three firms' stocks to be chosen, they must fulfill the following criteria:
1. The company needs to have a successful track record
2. The growth rates of the companies need to be stable throughout the year
3. The total return provided by the companies needs to be greater than 2%
4. The companies need to have a large market capitalization
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5. The beta of their business should not be volatile
4. Fundamental analysis
4.1 Unilever Plc
Unilever Plc is a world leader in fast-moving consumer goods (FMCG) with a range of
commodities in the food, cosmetics, personal care, drinks, home care, vitamins, and minerals
categories.
Strengths:
1. Unilever has 400 brands on its list. 13 of these brands produced more than a billion
euros in 2020. Furthermore, 81% of these brands are in the top two places in the
market.
2. Unilever's distribution network includes approximately 25 million locations. The
number of retailers ordering Unilever's eB2B platforms will have increased by 32.8%
year on year by the end of 2020.
3. Unilever products are distributed in over 190 countries. Every day, 2.5 billion people
consume Unilever products. In 2020, emerging markets will account for 58% of its
sales.
Figure 12: Unilever (Bba.Bloomberg, 2022), refer Appendix 2 for explanation
4.2 AstraZeneca Plc
AstraZeneca Plc is a biopharmaceutical firm that focuses on the development, manufacturing,
and marketing of a variety of prescription medications. The firm offers a wide range of
goods, including biologics, prescription medications, and vaccinations. AstraZeneca has
pharmaceutical firms, distributors, and representative offices in each country where it
operates. AstraZeneca's COVID-19 vaccine has been licenced for restricted marketing or
emergency use.
Strengths
1. R&D expenditure is significant, with an R&D workforce of about 11,000 people.
2. Employing around 60,000 workers in over 100 countries
3. Ten products having global sales in excess of one billion dollars
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4. Higher revenue creates a highly competitive advantage in the market.
Figure 13: AstraZeneca (Bba.Bloomberg, 2022), refer Appendix 3 for explanation
4.3 Lloyd Banking Group Plc
Lloyds Banking Organization is a prominent UK-based financial services firm that provides
both personal and commercial customers with a wide range of banking and financial services.
Strengths:
1. Lloyds just announced a core tier 1 ratio (a critical indicator of a bank's safety) of 9.9
percent at the end of September. This was an increase from 8.1 percent at the end of
2012.
2. Lloyds Banking Group Plc has high free cash flows, which allow the corporation to
invest in new initiatives.
3. It has effectively integrated a number of technology firms in recent years in order to
simplify operations and develop a strong supply chain.
4. In response to market demands, Lloyds Banking Group Plc has been able to scale up
and scale down through automated processes.
Figure: 14: Lloyd Banking Group (Bba.Bloomberg, 2022), refer Appendix 4 for explanation
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5. Valuations Portfolio formation and risk analysis
5.1 Price Multiples Model
Figure 15: Price multiples
(Self-created)
5.1.1 AstraZeneca
Figure 16: Price Multiples (Bba.Bloomberg, 2022)
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The price multiples of AstraZeneca are shown in the above figure, which shows that the
company's P/E ratio has grown over time. Furthermore, the company's EPS is performing
well as a result of the increasing market demand for the business. As a result, it allows
investors to purchase a stock because the market value of the company's stock will rise in the
future.
5.1.2 LLOYDS BANKING GROUP
Figure 17: Price Multiples (Bba.Bloomberg, 2022)
Lloyds' price multiples do not offer any satisfactory data, since their P/E has dropped in
recent years. As a result, the company's EPS has deteriorated, and the company's market
expansion has been halted. As a result, investors must retain the stock and wait for the market
price to rise before selling it.
5.1.3 Unilever Plc
Figure 18: Price Multiples (Bba.Bloomberg, 2022)
Unilever's price multiples are likewise extremely low due to the company's lesser earning
possibilities. Furthermore, due to a lack of adequate earning potential, the corporation has
issued reduced dividends to its stockholders. As a result, it also claimed that retaining the
stock at this time is critical for shareholders in order to eliminate the danger of losses in their
business.
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5.2 Discounted Free Cash Flow Model
5.2.1 AstraZeneca Plc - AstraZeneca Plc's current assets and current liabilities will continue
at 53% and 60% of sales, respectively, as is the company's historical norm. Furthermore,
because the firm operates in the health care field, the amount of assets and liabilities required
is substantially larger than in other industries because they supply drugs to the general
population. Bloomberg's cost of equity and debt were used to construct the WACC. The
weighted average cost of capital (WACC) is an important financial concept that is frequently
used in financial circles to determine whether the return on investment of an asset, project, or
organization will surpass or match the cost of invested capital. The target price has been
determined to be 1390.30, which signals a buy since the company's prospects are favourable.
Assumptions:




The company will maintain its existing dividend payout ratio of 252%.
The tax rate will continue at 30%, as this is the company's existing rate.
Using the straight-line depreciation technique, the company's depreciation rate is
11%.
According to the yearly estimates, sales growth is predicted to be 41%
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ASSUMPTIONS
Sales growth
Current assets/Sales
Current liabilities/Sales
Net fixed assets/Sales
Costs of goods sold/Sales
Depreciation rate
Interest rate on debt
Interest paid on cash and marketable securities
Tax rate
Dividend payout ratio
Year
Income statement
Sales
Costs of goods sold
Interest payments on debt
Interest earned on cash and marketable securities
Depreciation
Profit before tax
Taxes
Profit after tax
Dividends
Retained earnings
41%
53%
60%
19%
25%
11%
10.00%
3.05%
30%
252%
0
1
37,417
-9,444
-700
11
-1,384
25,900
-380
25,520
-4,447
21,073
52,758
-13,316
-2,273
24
-5,561
31,633
-9,439
22,194
-55,929
-33,735
6,398
19,846
800
27,983
800
39,456
79,119
-8,324
70,795
97,039
23,856
-13,885
9,971
38,754
30,901
-16,842
14,059
54,315
22,594
43,482
35,126
1,710
1,02,912
31,855
1,971
36,953
-32,025
38,754
1.18
0.40
0.35
0.30
0.30
0.30
0
1
2
3
4
5
22,194
5,561
-8,137
9,261
55,263
1,594
-17
85,720
36,807
2,957
-11,473
13,061
-7,045
155
-17
34,444
52,137
3,857
-16,177
18,416
-9,621
190
-17
48,785
73,769
5,090
-22,809
25,966
-13,218
250
-17
69,030
1,04,285
6,789
-32,161
36,612
-18,250
347
-17
97,605
FCF
Terminal Value
TCF
85,720
34,444
48,785
69,030
85,720
34,444
48,785
Company Value
£21,91,212.58
Balance sheet
Cash and marketable securities
Current assets
Fixed assets
At cost
Depreciation
Net fixed assets
Total assets
Current liabilities
Debt
Stock
Retained earnings
Total liabilities and equity
debt-equity ratio
Year
Free cash flow calculation
Profit after tax
plus depreciation
less increase in current assets
plus increase in current liabilities
less increase in fixed assets at cost
plus after-tax interest on debt
less after-tax interest on cash and mkt. securities
Free cash flow
WACC
LT growth
less debt
plus cash
Equity Value
Outstanding shares
Price
8.00%
4%
2
ke
kd
3
4
5
74,389 1,04,888 1,47,892
-18,775 -26,473 -37,327
-220
-271
-356
24
24
24
-2,957
-3,857
-5,090
52,461
74,312 1,05,144
-15,654 -22,175 -31,375
36,807
52,137
73,769
-92,753 -1,31,386 -1,85,899
-55,946 -79,249 -1,12,129
2,08,528
-52,630
-494
24
-6,789
1,48,639
-44,354
1,04,285
-2,62,798
-1,58,513
800
55,633
800
78,442
800
1,10,603
40,522
53,740
-20,698 -25,789
19,824
27,952
76,257 1,07,194
71,990
-32,578
39,412
1,50,815
44,916
63,331
89,297
2,437
2,983
4,130
94,933 1,77,162 2,93,115
-87,971 -1,67,220 -2,79,349
54,315
76,257 1,07,194
1,25,909
5,748
4,57,020
-4,37,862
1,50,815
97,605
2830540.67
69,030
29,28,146
10%
2%
43,482
6,398
£21,54,128.58
1549
1390.30
(Bloomberg, 2022)
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5.2.2 Unilever Plc
The FCF of the company has been prepared by using their historical data of 5 years in which
it is identified that the return provided by the company is higher than the other companies.
Current assets and current liabilities at Unilever Plc will remain at 24.60% and 47.24% of
revenues, respectively. Furthermore, because the firm operates in commodities, the number
of assets and liabilities required is significantly greater than in other industries because they
provide daily vital items to the general population all over the world. The WACC was built
using Bloomberg's cost of equity and debt. The weighted average cost of capital (WACC) is a
financial concept that is commonly used in financial circles to assess if the rate of return of an
asset, project, or organization will exceed or match the cost of invested capital. The target
price has been set at 161.84, indicating a buy since the company's prospects are favourable.
Assumptions
1.
2.
3.
4.
The corporation will keep its current dividend payout ratio of 62.66%.
The tax rate will remain at 22.62%, which is the company's current rate.
The depreciation rate for the corporation is 2.1%.
Annual sales growth is expected to reach 5%, according to forecasts.
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ASSUMPTIONS
Sales growth
Current assets/Sales
Current liabilities/Sales
Net fixed assets/Sales
Costs of goods sold/Sales
Depreciation rate
Interest rate on debt
Interest paid on cash and marketable securities
Tax rate
Dividend payout ratio
Year
Income statement
Sales
Costs of goods sold
Interest payments on debt
Interest earned on cash and marketable securities
Depreciation
Profit before tax
Taxes
Profit after tax
Dividends
Retained earnings
5%
25%
47%
91%
58%
2%
10.00%
8.00%
23%
63%
0
1
2
3
4
5
52,444
-30,259
-508
0
-1,472
20,205
-1,935
18,270
-3,790
14,480
54,804
-31,616
-2,076
64
-1,247
19,928
-4,508
15,420
-9,662
5,758
57,270
-33,039
-1,067
64
-1,320
21,908
-4,956
16,952
-10,622
6,330
59,847
-34,526
-1,001
64
-1,397
22,987
-5,200
17,787
-11,146
6,642
62,540
-36,080
-986
64
-1,478
24,061
-5,443
18,619
-11,666
6,952
65,355
-37,703
-1,029
64
-1,562
25,124
-5,683
19,441
-12,182
7,259
4,495
12,906
800
13,487
800
14,094
800
14,728
800
15,391
800
16,083
57,694
-9,895
47,799
65,200
61,092
-11,142
49,949
64,236
64,660
-12,463
52,197
67,091
68,406
-13,860
54,546
70,074
72,338
-15,338
57,001
73,191
76,466
-16,900
59,566
76,449
24,778
30,571
52,844
46,745
1,54,938
25,893
10,955
-25,115
52,503
64,236
27,058
10,379
-29,179
58,833
67,091
28,275
9,646
-33,322
65,475
70,074
29,548
10,072
-38,855
72,427
73,191
30,878
10,516
-44,631
79,686
76,449
0.31
0.40
0.35
0.30
0.30
0.30
0
1
2
3
4
5
15,420
1,247
-581
1,115
-3,398
1,607
-50
15,361
16,952
1,320
-607
1,165
-3,568
825
-50
16,039
17,787
1,397
-634
1,218
-3,746
775
-50
16,747
18,619
1,478
-663
1,272
-3,932
763
-50
17,487
19,441
1,562
-693
1,330
-4,127
797
-50
18,260
FCF
Terminal Value
TCF
15,361
16,039
16,747
17,487
15,361
16,039
16,747
Company Value
£4,40,552.66
Balance sheet
Cash and marketable securities
Current assets
Fixed assets
At cost
Depreciation
Net fixed assets
Total assets
Current liabilities
Debt
Stock
Retained earnings
Total liabilities and equity
debt-equity ratio
Year
Free cash flow calculation
Profit after tax
plus depreciation
less increase in current assets
plus increase in current liabilities
less increase in fixed assets at cost
plus after-tax interest on debt
less after-tax interest on cash and mkt. securities
Free cash flow
WACC
LT growth
less debt
plus cash
Equity Value
Outstanding shares
Price
7.54%
4%
ke
kd
18,260
536680.564
17,487
5,54,940
9%
2%
30,571
4,495
£4,14,476.66
2561
161.84
(Bloomberg, 2022)
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6. Technical Analysis
6.1 UKX
Figure 19: UKX graph (Bba.Bloomberg, 2022)
In the above chart of the UKX index, it is clearly seen that between 2017 and the 2019 year
end it was consolidated and moved in the range of 7000 and 8000. But in the year 2020, it
broke the support of 7000 and made a low of 5000 when covid hit the global market. After
that, it gave a sharp bounce supported by high volume. From the year 2017 to 2019, RSI was
also seen between 30 and 70. The short rally has come with higher volume and at the bottom
near 5000 the volume was extremely high and it supported the upward rally with short
covering buying. It went up till 6500 levels then it retraced back till 5500. Slowly but
gradually, it was making higher high and higher low formations which indicated bullish
momentum and made a high of 7600 in early 2022. Recently it took the support of 7000 and
bounced back. But it is still bearish to sideways index with RSI around 60 levels now.
6.2 Unilever Plc
Figure 20: Unilever Candlestick Chart (Bba.Bloomberg, 2022)
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The share price of Unilever was made higher high in 2017 and then in early 2018 price was
going down and took support around 3600 which was its previous resistance. The RSI was
also oversold and showed a multiple RSI divergence which helped bounced back. Then once
it faced resistance at 4500 and went down took support and then it broke the resistance in
April 2019 and made a high of 5400 in 2020 RSI was also in the overbought area but as soon
as covid hit it broke all the support and it made a low of 3600 and then it bounced back to
again move in downward trendline channel. Now it is moving in the same trendline which
sloping downwards. MACD is showing in the bullish area and showing great strength and
RSI is also around 70 levels which may get into the bought category.
6.3 AstraZeneca
Figure 21: AstraZeneca Candlestick Chart (Bba.Bloomberg, 2022)
The company AstraZeneca is the formative one in the pharma industry, the share price of the
company is consecutively making higher high and higher low formation so accordingly, to
Dow theory, it is in a bullish trend. The share price of the company is more consistent it is
taking support from the lower trendline which is marked in red in the chart. If you can view it
is making a symmetry triangle which it has broken out of the pattern in early 2022 and after
going high above-taken support on the trendline near 10000 and again it is at a near all-time
high. The RSI is also not in the overbought zone which makes room for to share price to go
up. MACD is also showing strength and is still bullish which makes even a strong strength in
the stock price give more bullish signs.
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References
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reality-based communication for construction projects. KSCE Journal of civil
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Interactive effect of top management support. Sustainability, 13(17), p.9526.[Accessed 6th
July 2022].
Davies, A., Manning, S. and Söderlund, J., 2018. When neighbouring disciplines fail to learn
from each other: The case of innovation and project management research. Research
Policy, 47(5), pp.965-979. [Accessed 6th July 2022].
Greenwood, N. and Warren, P., 2022. Climate risk disclosure and climate risk management
in UK asset managers. International Journal of Climate Change Strategies and
Management, 14(3), pp. 272-292. [Accessed 6th July 2022].
Hamma, W., Salhi, B., Ghorbel, A. and Jarboui, A., 2020. Conditional dependence structure
between oil prices and international stock markets: Implication for portfolio management and
hedging effectiveness. International Journal of Energy Sector Management, 14(2), pp. 439467. [Accessed 6th July 2022].
Han, B., 2021. Strategic Portfolio Building in Donors' Multilateral Institutional Choice. East
Asian Economic Review, 25(4), pp. 339-360. [Accessed 6thJuly 2022].
Hanby, M., Kanuri, S., Fulmore, A. and Mcleod, R., 2022. Private Equity (PE) Performance
Around the World. The Journal of Applied Business and Economics, 24(3), pp. 159-168.
[Accessed 6thJuly 2022].
Khosravi, P., Rezvani, A. and Ashkanasy, N.M., 2020. Emotional intelligence: A preventive
strategy to manage the destructive influence of conflict in large-scale projects. International
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2022].
Tradingeconomics.com,
2022,
Overview,
Viewed
on
22nd
June
2022<https://tradingeconomics.com/united-kingdom/stock-market> [Accessed 6thJuly 2022].
Ftserussell.com,
2022,
Overview,
Viewed
on
22nd
2022<https://www.ftserussell.com/products/indices/uk>[Accessed 6th July 2022].
``
FINANCIAL INVESTMENT IN PRACTICE
June
23
Pages.stern.nyu.edu,
2022,
Overview,
Viewed
on
22nd
June
2022<https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/Betas.html>[Accesse
d 6th July 2022].
Data.oecd.org,
2022,
Overview,
Viewed
on
5th
2022<https://data.oecd.org/price/inflation-forecast.htm>[Accessed 6th July 2022].
July
Data.oecd.org,
2022,
Overview,
Viewed
on
5th
2022<https://data.oecd.org/unemp/unemployment-rate-forecast.htm>[Accessed 6th
2022].
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July
Data.oecd.org, 2022, Overview, Viewed on 5th July 2022<https://data.oecd.org/gdp/real-gdpforecast.htm>[Accessed 6th July 2022].
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``
FINANCIAL INVESTMENT IN PRACTICE
24
Appendices:
Appendix 1 - Portfolio
Start Date
End Date
01-07-2017
30-06-2022
LLOY LN EquityAZN LN Equity ULVR LN Equity
UKX
LLOY LN Equity AZN LN Equity ULVR LN Equity
Total Return Total Return
Total Return Total Return
Index (Gross Index (Gross
Index (Gross Index (Gross
Dividends)
Dividends)
Dividends)
Dividends)
TOT_RETUR TOT_RETURN_I TOT_RETUR TOT_RETUR
N_INDEX_G NDEX_GROSS_ N_INDEX_GR N_INDEX_GR
Dates
ROSS_DVDS DVDS
OSS_DVDS
OSS_DVDS
Returns
Returns
Returns
Returns
31-07-2017
65.58
4569
4321.5
7372
31-08-2017
63.82
4541
4519
7430.62
-0.02683745
-0.006128256
0.045701724
29-09-2017
67.73
4955
4319
7372.76
0.061266061
0.091169346
-0.044257579
31-10-2017
68.29
5032
4269.5
7493.08
0.008268123
0.015539859
-0.011460986
30-11-2017
66
4777
4164
7326.67
-0.03353346
-0.050675676
-0.024710153
29-12-2017
68.06
5121
4125.5
7687.77
0.031212121
0.072011723
-0.009245917
31-01-2018
69.51
4886.5
4000
7533.55
0.021304731
-0.045791838
-0.030420555
28-02-2018
68.8
4775
3733.5
7231.91
-0.010214358
-0.022817968
-0.066625
30-03-2018
64.66
4895.5
3955.5
7056.61
-0.060174419
0.025235602
0.059461631
30-04-2018
64.66
5103
4077.5
7509.3
0
0.042385865
0.03084313
31-05-2018
63.21
5466
4146.5
7678.2
-0.022424992
0.071134627
0.016922134
29-06-2018
63.05
5253
4192
7636.93
-0.002531245
-0.038968167
0.01097311
31-07-2018
62.38
5865
4355
7748.76
-0.010626487
0.116504854
0.038883588
31-08-2018
59.3
5795
4392
7432.42
-0.0493748
-0.011935209
0.008495982
28-09-2018
59.27
5963
4216
7510.2
-0.000505902
0.028990509
-0.04007286
31-10-2018
57.22
5990
4146.5
7128.1
-0.034587481
0.004527922
-0.01648482
30-11-2018
55.36
6117
4243.5
6980.24
-0.032506117
0.021202003
0.023393223
31-12-2018
51.85
5873
4108.5
6728.13
-0.063403179
-0.039888834
-0.031813362
31-01-2019
57.9
5532
3984.5
6968.85
0.116682739
-0.058062319
-0.030181331
28-02-2019
63.54
6139
4008
7074.73
0.097409326
0.109725235
0.005897854
29-03-2019
62.14
6135
4395
7279.19
-0.022033365
-0.000651572
0.096556886
30-04-2019
62.57
5726
4657.5
7418.22
0.006919858
-0.066666667
0.059726962
31-05-2019
57.26
5833
4837
7161.71
-0.084864951
0.018686692
0.038539989
28-06-2019
56.59
6438
4894.5
7425.63
-0.011701013
0.103720213
0.011887534
31-07-2019
53.33
7061
4955.5
7586.78
-0.057607351
0.096769183
0.012462969
30-08-2019
49.83
7318
5196
7207.18
-0.065629102
0.036397111
0.048531934
30-09-2019
54.12
7261
4890
7408.21
0.086092715
-0.007789013
-0.058891455
31-10-2019
56.8
7501
4622.5
7248.38
0.049519586
0.033053298
-0.054703476
29-11-2019
61.15
7458
4578
7346.53
0.076584507
-0.005732569
-0.009626825
31-12-2019
62.5
7607
4350.5
7542.44
0.02207686
0.019978547
-0.04969419
31-01-2020
56.79
7424
4533.5
7286.01
-0.09136
-0.02405679
0.042064131
28-02-2020
50.2
6794
4170
6580.61
-0.116041557
-0.084859914
-0.080180876
31-03-2020
32
7216
4075.5
5671.96
-0.362549801
0.06211363
-0.022661871
30-04-2020
32.24
8322
4102
5901.21
0.0075
0.15327051
0.00650227
29-05-2020
29.87
8580
4332
6076.6
-0.073511166
0.031002163
0.05607021
30-06-2020
31.175
8421
4355
6169.74
0.04368932
-0.018531469
0.005309326
31-07-2020
26.285
8530
4573
5897.76
-0.156856455
0.012943831
0.050057405
31-08-2020
28.35
8340
4460
5963.57
0.078561917
-0.022274326
-0.024710256
30-09-2020
26.355
8457
4776
5866.1
-0.07037037
0.014028777
0.070852018
30-10-2020
28.025
7766
4404
5577.27
0.063365585
-0.081707461
-0.077889447
30-11-2020
35.62
7805
4571
6266.19
0.271008029
0.00502189
0.037920073
31-12-2020
36.44
7324
4392
6460.52
0.023020775
-0.061627162
-0.039159921
29-01-2021
33
7491
4240
6407.46
-0.094401756
0.022801748
-0.034608379
26-02-2021
39
6945
3733
6483.43
0.181818182
-0.072887465
-0.119575472
31-03-2021
42.535
7247
4056
6713.63
0.090641026
0.043484521
0.086525583
30-04-2021
45.435
7715
4231.5
6969.81
0.068179147
0.064578446
0.043269231
31-05-2021
49.89
8046
4226.5
7022.61
0.098052162
0.042903435
-0.001181614
30-06-2021
46.69
8683
4230.5
7037.47
-0.06414111
0.079169774
0.00094641
30-07-2021
45.635
8268
4151
7032.3
-0.022595845
-0.047794541
-0.018792105
31-08-2021
43.775
8514
4046
7119.7
-0.04075819
0.029753266
-0.02529511
30-09-2021
46.57
8958
4005
7086.42
0.063849229
0.052149401
-0.010133465
29-10-2021
50.22
9094
3912
7237.57
0.078376637
0.01518196
-0.023220974
30-11-2021
46.8
8276
3859
7059.45
-0.068100358
-0.089949417
-0.013548057
31-12-2021
47.8
8678
3945.5
7384.54
0.021367521
0.04857419
0.022415133
31-01-2022
51.05
8617
3787.5
7464.37
0.067991632
-0.007029269
-0.040045622
28-02-2022
48.435
9059
3746.5
7458.25
-0.05122429
0.051293954
-0.010825083
31-03-2022
47.055
10132
3455
7515.68
-0.028491793
0.118445745
-0.077805952
29-04-2022
45.88
10688
3719
7544.55
-0.024970779
0.054875642
0.076410999
31-05-2022
44.89
10454
3825
7607.66
-0.02157803
-0.021893713
0.028502286
30-06-2022
42.31
10800
3721
7169.28
-0.057473825
0.033097379
-0.027189542
Expecting Return
Sigma
0.004205949
0.038742777
Rfr
Sharpe ratio
Annual Return
Annualized Return
0.001666667
0.06554209
5.05%
5.17%
Annualized Sigma
Sharpe Ratio
Beta
Treynor Ratio
13.42%
0.227044459
-0.303205201
-0.100497586
Information Ratio
0.062808962
``
FINANCIAL INVESTMENT IN PRACTICE
Average
TEV
UKX
Portfolio
Returns
-0.007951709
0.007786699
-0.016319533
0.022208491
-0.049285692
0.020060434
0.040039556
0.024239793
-0.0641512
-0.02249211
0.005374958
-0.014643319
0.040824596
-0.010464963
0.050877473
0.020743256
0.036117669
-0.035778143
-0.015193325
-0.028900043
-0.019099653
0.034578376
-0.036851534
-0.021701862
0.050034402
-0.027893018
0.021574712
-0.013540957
-0.026667012
0.033998282
0.096815678
0.138079904
-0.040418127
-0.029721023
-0.01532765
0.044082895
-0.011158474
0.016344237
0.049237142
-0.123522799
-0.031012465
0.008212961
-0.011856492
-0.035505897
-0.038158195
-0.007575529
-0.002116022
0.000734639
-0.012428366
0.004674354
-0.021329529
0.02461047
-0.04605033
-0.010810423
0.000819895
-0.007700198
-0.003841302
-0.008364979
0.057623501
0.02823239
0.00064911
-0.0025192
-0.0332198
0.01749752
-0.0349572
-0.0519029
0.04729469
0.03432019
0.03418093
-0.0053636
0.06365472
0.0013521
-0.0172972
-0.0098204
0.02218992
-0.0347137
-0.0379435
0.04041967
0.06394628
0.01821747
0.03100728
0.0415017
0.03922411
0.04358704
-0.0410211
-0.0252886
-0.0076038
-0.0264374
0.01941838
-0.0820158
0.00187815
0.05417244
0.04678974
-0.0020951
0.03618501
-0.0230108
0.05115699
-0.0778867
0.02928716
-0.0459089
-0.016491
-0.1017628
0.07258466
0.05040829
0.01400746
0.02577604
-0.0282438
-0.0075548
0.01074303
-0.0098563
-0.0388385
0.03090079
-0.0283735
0.00899202
-0.0136415
0.06852579
0.01169619
-0.0078784
Date
Portfolio
UKX
Tracking Error
Date
Returns
Returns
Returns
31-07-2017
1
1
31-08-2017
1.028232391
1.007951709 `
29-09-2017
1.028899827
1.000103093
-0.007137589
31-10-2017
1.02630782
1.016424308
0.01380033
30-11-2017
0.992214089
0.993851058
-0.055428281
29-12-2017
1.009575374
1.042833695
0.06678321
31-01-2018
0.974283448
1.021913999
-0.055017631
28-02-2018
0.923715302
0.980997016
-0.091942466
30-03-2018
0.967402132
0.957217851
0.023054898
30-04-2018
1.000603555
1.018624525
0.098471388
31-05-2018
1.03480511
1.04153554
0.056673036
29-06-2018
1.029254858
1.03593733
-0.01073853
31-07-2018
1.094771791
1.051106891
0.078298042
31-08-2018
1.096252033
1.008195876
-0.039472496
28-09-2018
1.077289922
1.018746609
-0.006832256
31-10-2018
1.0667105
0.966915355
-0.060697877
30-11-2018
1.090380716
0.946858383
0.00144666
31-12-2018
1.0525296
0.912660065
-0.070831339
31-01-2019
1.012592991
0.945313348
-0.002165311
28-02-2019
1.053521667
0.9596758
0.055612996
29-03-2019
1.120890462
0.987410472
0.092846327
30-04-2019
1.141310251
1.006269669
0.037317123
31-05-2019
1.176699183
0.971474498
-0.003571091
28-06-2019
1.225534196
1.007274824
0.078353231
31-07-2019
1.27360468
1.029134563
0.060925969
30-08-2019
1.329117334
0.977642431
-0.006447366
30-09-2019
1.274595475
1.004911829
-0.013128085
31-10-2019
1.242362751
0.983231145
-0.046863304
29-11-2019
1.232916036
0.996545035
0.005937127
31-12-2019
1.200320976
1.023119913
0.00022964
31-01-2020
1.223629267
0.988335594
-0.0145799
28-02-2020
1.123272338
0.892649213
-0.178831474
31-03-2020
1.125382014
0.769392295
-0.136201753
30-04-2020
1.186346703
0.800489691
0.094590567
29-05-2020
1.241855556
0.824281063
0.076510762
30-06-2020
1.23925375
0.836915355
0.013232555
31-07-2020
1.284096156
0.800021704
-0.007897888
31-08-2020
1.254548133
0.808948725
-0.011852282
30-09-2020
1.318727038
0.795727075
0.034812752
30-10-2020
1.216015714
0.756547748
-0.127123862
30-11-2020
1.251629355
0.849998644
0.152809954
31-12-2020
1.194168397
0.876359197
-0.01489646
29-01-2021
1.174475308
0.869161693
-0.024704009
26-02-2021
1.054957454
0.879466902
-0.089906272
31-03-2021
1.131531186
0.910693163
0.108090561
30-04-2021
1.18856974
0.94544357
0.088566486
31-05-2021
1.205218583
0.952605806
0.021582989
30-06-2021
1.236284347
0.954621541
0.027892063
30-07-2021
1.20136699
0.953920239
-0.02897843
31-08-2021
1.192290938
0.965775909
0.004873596
30-09-2021
1.20509975
0.96126153
0.006068672
29-10-2021
1.193221914
0.981764786
0.011473219
30-11-2021
1.146879023
0.957603093
-0.063448921
31-12-2021
1.182318487
1.001701031
0.076951117
31-01-2022
1.148771922
1.012529843
-0.01756312
28-02-2022
1.159101702
1.011699674
0.008172125
31-03-2022
1.143289774
1.019489962
-0.005941339
29-04-2022
1.221634613
1.023406131
0.072367096
31-05-2022
1.235923081
1.031966902
0.020061166
30-06-2022
1.226185959
0.972501356
-0.065501921
0.003967317
6.32%
Geom. RM
Geom . RY
-1
-1
Value at Rsik
VaR
-0.056813081
0.050471391
Var G
-1.220773666
25
Appendix 2 – Unilever Plc
The aforementioned graph (figure 12) illustrates how the rise in revenue has been overstated
due to numerous ups and downs based on rising trends in revenue estimating when compared
to other businesses. Additionally, the aforementioned graph shows Unilever's five-year
revenue increase, showing that 2017 saw the company's highest revenue (Ali et al. 2021,
p.38). However, it saw a major dip in 2018 before rebounding in 2019 but saw a significant
surge in 2021 during Covid 19. This is good news for the organization since it shows how
easily it can continue operating in the sector.
Appendix 3 – AstraZeneca Plc
The graph (figure 13) depicts AstraZeneca's revenue growth using advanced procedures and
producing equipment to enhance industrialization in the UK and many other firms. The
company's revenue growth was remarkable since it was fairly low in 2017, but it began to rise
after 2018 owing to an increase in global demand for pharmaceutical items. Furthermore, the
company's revenue was at its pinnacle in 2021, indicating that the company's performance
was relatively high in 2021 owing to the high sale of pharma items throughout the world.
Appendix 4 – Lloyds Banking Group Plc
The graph (figure 14) above depicts the increasing patterns of revenue growth toward
increasing productivity and market price. This is due to the fact that significant interest rate
discounts are being offered in order to improve consumer efficiency. The banking group's
income fluctuated throughout the years owing to fluctuations in their business's revenue
(Davies et al. 2018, p.12). The company's revenue peaked in 2017, however, it has decreased
considerably since then owing to the onset of the Covid-19 epidemic. However, after the
pandemic's impact was reduced slightly in 2021, sales increased significantly again.
``
FINANCIAL INVESTMENT IN PRACTICE
26