Case Motivation For Zeus
Business and Economics
Case motivation: Zeus Asset
Management
Go8
Learning objectives
Consider different types of investors with different risk preferences and how their investments differ as a result
Examine how different mutual fund investments might allow individual investors to invest in portfolios otherwise not within their reach.
Understand how fund performance is estimated and the caveats associated with a focus on returns without taking into account the risks associated with generating them.
Be capable of determining the best risk-adjusted measure of return for a particular investment.
2
Case Synopsis
This case centres around Zeus Asset Management Inc. Zeus is an asset management firm with both individual (high net worth) investors and institutional investors. Zeus is known for its relationship-orientated client services and has a conservative, risk-averse quality-oriented approach to investment management. Given their diverse client base and their individual needs, Zeus is interested in improving their measures of fund performance, which to date has consisted mainly of holding period and benchmarked returns. Zeus is particularly interested in obtaining risk-adjusted return measures.
3
Case Synopsis continued
Key questions for consideration
1. How does Zeus differ from its main competitors
2. Why is estimation of risk-adjusted returns of particular interest to
Zeus?
3. Discuss the advantages and disadvantages of the risk-adjusted return measures employed.
4
Potential questions to address in your report
Discuss the alternative performance measures and mention the merits for each of them.
Discuss why absolute or relative returns may not reveal the entire truth about performance.
Examine the choice of appropriate benchmark for each of Zeus’s mutual funds. Estimate performance measures for each of mutual funds for Zeus as well as for the appropriate comparison index.
5
Submission (Case: Zeus)
You may work in groups but document and
Case motivation: Zeus Asset
Management
Go8
Learning objectives
Consider different types of investors with different risk preferences and how their investments differ as a result
Examine how different mutual fund investments might allow individual investors to invest in portfolios otherwise not within their reach.
Understand how fund performance is estimated and the caveats associated with a focus on returns without taking into account the risks associated with generating them.
Be capable of determining the best risk-adjusted measure of return for a particular investment.
2
Case Synopsis
This case centres around Zeus Asset Management Inc. Zeus is an asset management firm with both individual (high net worth) investors and institutional investors. Zeus is known for its relationship-orientated client services and has a conservative, risk-averse quality-oriented approach to investment management. Given their diverse client base and their individual needs, Zeus is interested in improving their measures of fund performance, which to date has consisted mainly of holding period and benchmarked returns. Zeus is particularly interested in obtaining risk-adjusted return measures.
3
Case Synopsis continued
Key questions for consideration
1. How does Zeus differ from its main competitors
2. Why is estimation of risk-adjusted returns of particular interest to
Zeus?
3. Discuss the advantages and disadvantages of the risk-adjusted return measures employed.
4
Potential questions to address in your report
Discuss the alternative performance measures and mention the merits for each of them.
Discuss why absolute or relative returns may not reveal the entire truth about performance.
Examine the choice of appropriate benchmark for each of Zeus’s mutual funds. Estimate performance measures for each of mutual funds for Zeus as well as for the appropriate comparison index.
5
Submission (Case: Zeus)
You may work in groups but document and