WBS is a pension fund that is managed professionally by an expert fund manager who investe in a range of investiments. You are a fund manager looking to buy into mutual funds and exchange traded funds (ETF\’s) on half of the pension fund
To facilitate the decision making you will be analysing the performance of mutual funds in the last three years. You need to choose three mutual funds and three ETF\’s based on their performance. (Data to be downloaded from bloomberg)
a) Prepare a report setting out:
The rational of choosing the mutual funds and ETF\’s
Set out objectives – growth or income, combination of both and/or any other relevant objectives (Investment Policy Statement)
Constraints for the investment manager
b) Use fundamental analysis (the top-down approach) to select and analyse the funds world-ride. And provide and analysis of the economy and various markets (equities and bond) and give reasons as to whether or not it is favourable to invest taking into account the macroeconomic and chosen market conditions. (Take global events into account and explain how they affect the market. Brexit and the USA elections for example
c)Analyse the performance of the funds, compute the risk adjusted measure (sharpe ratio)
adjust the returns from Bloomberg for expensas (returns-expenses)
Sharpe ratio= (TRp-RF)/SDp
Calculate the portfolio sharpe ratio, the market sharpe ratio and the benchmark sharpe ratio
d)Compare and contraste your results (from part c) on the performance of ETF\’s and Mutual Funds. Comment on the findings and justify your answers
e)In the concluding portion of the report, students are required to summarize the purpose and findings. Students may provide a discussion of the major points and drawbacks, and a forecast of how the funds would perform with possible assumptions if required. (Summary of findings, limitations and recommendations and prediction of future performance of the funds).
The assignment should be produced in microsoft word and excel
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