Portfolio Weight of Investment Vehicles

Portfolio Weight of Investment Vehicles

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Portfolio Weight of Investment Vehicles

The primary definition of portfolio weight is the composition in percentage of the investment vehicles that build the portfolio (Maginn, 2007). Varied approaches that can be used/employed to determine the portfolio weight of a specified holding inclusive of the division of the security dollar value by the dollar value of the entire portfolio.

Considerably, the weight is not only determined through investment security. Investment strategy gives a pointer into the determination of a portfolio weight that may be varied to include geographical regions, sector and even the index exposure (Aït-Sahalia and Hansen, 2010).


Ford has an incredible 75% rate of return that averages across the past five years. That is an encouraging and luring factor for the security considering that it largely benefits from the bankruptcy of rivals GM and Chrysler. The ability of the company to outcompete rivals in the market has taken its stock value to the average of 15.69 in the past 52 weeks.

However, the return rate of the company compared to what has significantly dropped from a 306.50% in 2009 to 16.89% in 2013. That is an indicator that decries its reducing value with time. A recovery from -35.91 in 2011 is insignificant because the company is yet to hit its highs again.

Considering the stock value of the company, it would make a total of 4.08% of the portfolio.

Home Depot

The merger expansion of the industry has seen it beat odds since the world economy plunged into a decline in 2008. In 2013 alone, the industry made a considerable 5.4% increase in sales from the previous year. The company statistics give the indication that it has surpassed the industry standards as they are quite impressive. The company has engaged in exemplary activities that have increased their inventory turnover and inventory sales.

The previous 52 weeks has given the company an average of 90.475$ value in the stock market. It would hence earn 23.51% of the portfolio.

Microsoft Inc.

Microsoft has not successfully outcompeted rivals compared to some investment vehicles in this portfolio. It has however done remarkably well in the competition market as a resultant of diversified business ideals and a remarkable trading enthusiasm (Maginn, 2007). The company’s average total return of 12.34 in the past 5 years beats its closest rival by slightly past 4. That is a positive indicator that the company has done well in as much as it offers a low industry volatility rate (Aït-Sahalia & Hansen, 2010). Moreover, the company has an average stock 52-week stock value of 42.34$.The stock value of Microsoft Inc. earns it a value of 11.00% in the portfolio.


The consistence dominance of the UPS company over rivals, though slight and its unimaginable cumulative return over the past 5 years are impressive. The pattern of growth has been stable and convincing and calls for a significant percentage in the portfolio. Factor to that is the prediction that the company will continue thriving as a result of its creative expansion. The company has a whooping average of average stock value of 103.145$ in the past 52 weeks. Considering all these factors, UPS earns a value of 26.80% in the portfolio.

WalmartOver the past three years, the Walmart business model has registered steady growth in its sales and returns. The company has employed marketing schemes that have seen to its return average steadily increase from -1.56 in 2008 to 16.69 in 2013. The international retail company has an average stock value of 81.47 in the past 52 weeks. As such, we consider that Walmart gets 21.17% in our portfolio.


The reputable business structure of the business company has witnessed its rise in the insurance market/trade. Its net income and assets’ value makes it a safe investment vehicle. It has a 52week average stock value of 51.795. The company is hence allocated 13.46%.


We have made the portfolio weight of the investment vehicles subject to their stock value. Key to the total percentage of the portfolio is the summation of all the stock values of the respective companies. The stock value is determined largely by the success rate of the company and its returns. A consideration, to give larger percentages of the portfolio to the companies valued at high rates, is the stock market has been made.


Aït-Sahalia, Y., & Hansen, L. P. (2010). Handbook of financial econometrics. Amsterdam: North-Holland/Elsevier.

Maginn, J. L. (2007). Managing investment portfolios: A dynamic process. Hoboken, N.J: John Wiley & Sons.