Stock Trak Simulation Project
Team: RELDTraders
Members: Rose Ewatame & Laura Dujmovich
FINA 5319
Investments
Dr. Debby Su

Revised Investment Policy Statement
Introduction
The RELDTraders Fund (the “fund”) was created to promote wealth for the portfolio’s investors. The fund managers are Rose Ewatame and Laura Dujmovich who both have minimal trading experience. The purpose of this policy statement is to establish guidelines under which the portfolio will be managed. Such guidelines include accountability standards and monitoring of the portfolio’s development. The investor’s current goals are capital appreciation partnered with current wealth preservation.
Investment Objectives & Spending Policy
The objective of the fund will be to earn short-term capital gains due to the minimal investment period of ten weeks. The current assets of the portfolio are $1,000,000. We will attempt to keep our cash holdings under 20% of our portfolio. The fund managers anticipate a return of 4.8% and the worst case scenario 3-month loss limit is -10.0%. The assets of the portfolio will be allocated as follows; 30% Bond Market, 30% Mutual Funds, 40% Stocks. Investments in bonds will be equally distributed between corporate and government bonds. We will invest in risky mutual funds such as ProFunds and high yield bond funds to offset the low-risk characteristics of our equity holdings. All of our stock holdings will be long equity positions that we expect to gradually appreciate therefore we will hold most of them for the entire duration of the investment period. The portfolio’s benchmark index will be the S&P500 since it is comprised of large-cap U.S. equities which resemble the majority of our portfolio’s holdings. Measurable goals of the portfolio include having a positive alpha, a Sharpe ratio consistently around 1.0 or higher, and a beta also around 1.0. Because our