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Case Study example - Hewlett Foundation
Finance & Accounting
Pages 4 (1004 words)
The report will evaluate the decision process that the committee uses. An asset allocation decision involves an evaluation of a portfolio. The analysis of each portfolio helps an investor in making a decision when investing. …
Extract of sample
The asset allocation policies are formulated by the foundation, internally managed but uses external manager to invest the portfolio. The external managers can either invest 100% of the asset in indexed instruments or invest partially depending on the allocation method. There are four methods that the foundation uses in evaluating the performance of its portfolio. To begin with, it uses a benchmark with which it compares the performance of each asset. If the portfolio outperforms its benchmark, then it is a worth portfolio to invest in. on the other hand, if its performance is less than that of the benchmark, then it’s not a worth portfolio. The second is comparing the performance of HF ‘composite benchmark’ with that of U.S stocks and bonds. The other method is by comparing performance of its portfolio relative to that of other tax-exempt institutions. Finally, accessing whether the return on assets exceeds the rate of inflation. ...
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