Group 6

INVESTMENT MANAGEMENT - Also known as asset management or

portfolio management, is the professional management of various
securities (such as stocks and bonds) to meet specified investment goals
for the benefit of investors.
Investment Objectives and
policies
 Defining investment goals and risk tolerance

INVESTMENT GOALS - Investment goals are specific

financial objectives that guide an investor's decisions and
strategies. They help determine the appropriate asset
allocation, risk tolerance, and time horizon for investments.

Three categories:
Three categories:
1. Short-Term Goals (1-3 years)
2. Medium-Term Goals (3-10 years)
3. Long-Term Goals (10+ years)
RISK TOLERANCE -Risk tolerance refers to the
amount of loss an investor is prepared to handle
while making an investment decision.

Factors that Influence Risk Tolerance

1. Timeline - Each investor will adopt a different time horizon based on
their investment plans. Generally, more risk can be taken if there is more
time.
2. Goals - Financial goals differ from individual
to individual.
3. Age - Usually, young individuals should be able to
take more risks than older individuals.
4. Portfolio size - The larger the portfolio, the more
tolerant to risk.
5. Investor comfort level - Each investor handles risk
differently.
Developing an investment policy statement

-An investment policy statement (IPS), a document drafted between a portfolio

manager and a client, outlines the rules and guidelines that the portfolio manager must
follow when considering asset allocation in the client’s portfolio. In other words, an
investment policy statement outlines how a portfolio manager is to manage the client’s
money.
Money market instruments
instrument

- Are short-term financial instruments that are highly liquid and have low risk. They
are used by governments, financial institutions, and corporations to raise short-term
funds.
 Here are some common types:

1. Treasury Bills (T-Bills) – Short-term debt securities issued by

the government with maturities ranging from a few days to one
year. They are sold at a discount and redeemed at face value.

2. Commercial Paper – Unsecured, short-term debt issued by

corporations to finance short-term liabilities. It typically has
maturities of up to 270 days.
Bonds - Are fixed-income securities that represent a loan made
by an investor to a borrower, typically a government, corporation,
or municipality.

Types
TypesofofBonds:
Bonds:

1. Government Bonds – Issued by national governments (e.g., U.S.

Treasury bonds, UK Gilts, Japanese Government Bonds). They are
generally low-risk but may offer lower returns.

2. Corporate Bonds – Issued by companies to raise capital. These offer

higher yields than government bonds but come with higher risk,
depending on the company's creditworthiness.
• Equities - Commonly known as stocks, represent ownership in a
company. When you buy a stock, you own a share of that company and
become a shareholder.
Types of Equities:

Common Stocks - Offer voting rights and potential dividends

but have higher risk.

Preferred Stocks - Typically provide fixed dividends and have

priority over common stock in case of liquidation but usually
don't have voting rights.
☆ Portfolio Management ☆

3..
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• Diversification Strategies - Are business growth strategies in which a
company expands into new markets, industries, or product lines to reduce risk
and increase profitability. These strategies help businesses avoid over-reliance
on a single market or product.

There are three main types of diversification strategies:

1. Concentric Diversification – Expanding into a related industry where the

company can use its existing expertise (e.g., a car company starting an electric
bike division).

2. Horizontal Diversification – Adding new, unrelated products or services to

the existing customer base (e.g., a smartphone company launching a
smartwatch).
 3. Conglomerate Diversification – Entering entirely different
industries with no direct connection to the existing business (e.g.,
a clothing brand starting a finance company).
 ☆Performance Measurement and evaluation ☆

Performance Measurement - Is the process of collecting, analyzing,

and reporting data on an individual's, team's, or organization's
activities to assess progress toward specific goals. It involves using key
performance indicators (KPIs), metrics, and benchmarks to quantify
efficiency, effectiveness, and outcomes.

Performance Evaluation - Goes beyond measurement by interpreting

the collected data to assess strengths, weaknesses, and areas for
improvement. It includes qualitative and quantitative assessments,
feedback, and comparisons against standards or objectives to make
informed decisions, enhance performance, and achieve strategic goals.
Investment reporting - Refers to the process of compiling, analyzing,
and presenting data related to an investment portfolio. It provides
insights into portfolio performance, asset allocation, risk exposure, and
other key financial metrics. Investment reports help investors, fund
managers, and financial advisors make informed decisions by tracking
progress against financial goals
Member:
Cabang, Jullie Ann
Orillaneda, Jhastil
Porras, Nataniel
Remitar, Divine
FUNDING STRATEGIES
FOR PHILIPPINES
COMPANIES
Elective 304: Treasury Management
FUNDING STRATEGIES
A PLAN OF ACTION USED CREATED TO ENSURE THAT
BY A BUSINESS TO THE BUSINESS IS ABLE TO
IDENTIFY AND SECURE SUCCESSFULLY MEET ITS
SOURCES OF FUNDING. GOALS.

THE PURPOSE OF FUNDING STRATEGIES IS TO

ENABLE BUSINESS EXPANSION AND OPERATIONAL STABILITY.
 SHORT-TERM FUNDING
BANK LOAN LINES OF CREDIT COMMERCIAL
A money that the bank A flexible loan from a
PAPER
gives to an individual or bank that allows a Consists of well-
organization with the borrower to access a set established firms’
expectation that it will amount of money as unsecured
be paid back. needed. The borrower promissory notes
• Personal loans can repay the amount sold primarily to
• Business loans used, or the entire other businesses.
• Car loans
• Consumer loans
amount, and then borrow
• Mortgage again.
• Government loans
 LONG-TERM FUNDING
• BOND ISSUANCES
It is when a government or business sells bonds to borrow
money. The issuer is the borrower, and the buyer of the bond is
the lender.
Two Types of Bonds Issued in the Philippines
Government bonds Treasury bills, Treasury notes, Retail Treasury
bonds, Fixed-rate Treasury notes
Corporate bonds
 LONG-TERM FUNDING
• EQUITY FINANCING
It is used when companies need to raise capital. It is
accomplished by selling a portion of the equity in a company
through shares.
Equity Financing in the Philippines
- Venture capital - Angel investors
- Private placements - Initial public offering (IPO)
 LONG-TERM FUNDING
• PROJECT FINANCE
It is a method to fund long-term infrastructure, industrial
projects, and public services.
Uses of Project Finance in the Philippines
- Infrastructure development - Energy facilities
- Environmental projects - Agriculture sector
CAPITAL STRUCTURE DECISIONS

• OPTIMAL MIX OF DEBT AND EQUITY

It is a mix of company's debt financing (loans) and equity
financing (shareholder investments) that maximizes a
company's market value while minimizing its cost of
capital.
CAPITAL STRUCTURE DECISIONS

• COST OF CAPITAL AND ITS IMPACT ON FUNDING DECISIONS

The return a company needs to achieve in order to justify
the cost of a capital project, such as purchasing new
equipment or constructing a new building.

It can impact the investment decisions, capital structure

decisions, and risk assessment.
 REPORTERS
SAMON, VILMA JOY
NARTE, RHEALYN
DELAURO, JESAMAE
ABRAO, LUSTRIAN JOHN
Elective 304: Treasury Management