Investment Management Case Study

1292 Words Mar 23rd, 2013 6 Pages
Beta Management Company | |
|Investment Management case study |

Table of contents

Backgrounds……………………………………………………….……1
Strategies………………………………………………………………...1
Background of California R.E.I.T and Brown Group Inc……………2
Return and risk…………………………………………………….....…2
Summary………………………………………………………………...4
Appendix………………………………………………………………...5

Background:
Beta Management Company is a small investment management company based in a Boston suburb founded in 1988. As the company developed, they had roughly 25 million dollars in the 1991. The goal of the company is to enhance returns but reduce risks for
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Another reason is well-diversified portfolio and good proxy for the S&P 500 Index, which is itself a proxy for the market portfolio.

The new strategy being considered by Sarah Wolf is to add individual stocks to its equity portfolio in the early 1991. If the company did not set up the new strategy, it will lose potential clients who preferred stocks. From the case study, it is clear to see Sarah Wolfe decide to choose smaller companies. The first reason is that larger and high-liquidity stocks are carefully analyzed and therefore, the probability of making excess profits is lower because of efficient arbitrage, Secondly, smaller companies will offer better diversification as Beta Management Company has already exposed to big companies through the Vanguard Index.
According to the investment behavior, she is a contrarian investor. When take a look at both of the company’s stocks invested by Sarah Wolfe it is easily to find that the two stocks were eroded over the past two years and she bets on the market value going up.

Background of California R.E.I.T and Brown Group Inc

California R.E.I.T was a real estate investment trust that made equity and mortgage investments in income-producing properties. Beta Management Company considered that the price of this stock is unduly depressed due to the “World Series” earthquake. However, it should be noted that the earthquake affected…