Title: Formulate an equity portfolio and measure its performance against the FTSE/JSE Top 40 (J200) and the FTSE/JSE MID-CAP indices and another South African equity fund of your choice.

You are required to formulate a portfolio using at least five different JSE shares and evaluate the performance of the formed portfolio against the JSE TOP40 and MID-CAP indices and any South African equity fund of your choice, using various risk-adjusted performance measures.

Your assignment should have four distinct sections (a, b, c and d as given below) and should address but not be limited to the points listed under the sections.

a) A clear introduction b) Theoretical review of portfolio management and the risk adjusted measures Conceptualisation of portfolio formation and management including the discussion on the benefits and limitations of equity portfolios relative to the other types of portfolios; and a; Clear explanation of risk-adjusted methods used in measuring portfolio performance. c) A clear review of empirical literature Review the empirical evidence (previous studies) on equity performance. d) Analysis: An application of the investment portfolio optimisation process to construct your equity portfolio and use of the risk adjusted performance measures to assess its performance against the bench mark (TOP 40 and MID-CAP indices) Identify the equity shares (from different sectors) to be included in your portfolio, determine the appropriate weight for each share and construct the portfolio. Use Jensens alpha, Treynor ratio, Sharpe ratio, T2 and M2 measures and any other relevant measures to evaluate the performance of your constructed portfolio in relation to the JSE TOP 40 and MID-CAP indices and an additional benchmark (equity fund) of your choice. e) Conclusion and recommendation A clear conclusion and relevant recommendations based on your findings