Harvest Fund is a mutual fund that seeks to maximise investors total return. Thefund focuses on the domestic stock market and invests at least 80 per cent of its totalassets in the companies that are listed on the London Stock Exchange.The fund s objective is long-term growth, with the aim of outperforming the FTSE AllShare Index on an annual basis (after fees). The fund takes a focused approach andhas an investment mandate that limits it to holding no more than six stocks.The fund managers review the portfolio periodically. While the fund follows a longtermbuy and hold strategy, the fund managers will sell existing holdings, buy newstocks or change the portfolio weighting, if necessary, to improve the portfolio s futureperformance.The key details of the existing fund are outlined below:Investment name Number of sharesVodafone Group 2,000,000AstraZeneca 500,000BP 3,000,000Imperial Tobacco Group 1,000,000Barclays 3,000,000Aviva 2,000,000Note: Assume that the fund is currently fully invested in equities and levies anannual management fee of 1 per cent, which is taken on 1 January eachyear.Required:As an assistant to the Lead Fund Manager, you are asked to write a report to:(a) measure and analyse the investment return and risk performanceof each holding, and the portfolio as a whole, for the last 12months against relevant benchmarks; (15 marks)(b) critically discuss the major events that had material impact on theperformance of each holding and the portfolio as a whole; and (15 marks)(c) review the past performance of each holding and the portfolio as awhole and make suggestions as to how the portfolio performancecan be improved in the future. (20 marks)Note: Your recommendations should be focused on the fund s key investmentindicators highlighted in the information and table above.(Total 50 marks)Word count: Maximum 4,000 words including quotations and in-text citations.
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