Facebook Pixel Code
x
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Investment Management Essay Example

Show related essays

Investment Management

This is a preview of the 10-page document
Read full text

This portfolio is diversified in the following distinct holdings such as M&G Index Tracker Fund and Ordinary shares in a constituent of the FTSE-350 (M&G Investments, 2015).The existing portfolio of Dr. Foster holds M&G Index Tracker Fund and ordinary shares of FTSE-350. Such construction of portfolio indicates that it is highly equity oriented. Thus it is severely exposed to risk with an expectation of high return. Considering M&G Index Tracker Fund, it is an equity oriented mutual fund that replicates the index movement of London Stock Exchange. In fact, it has chosen FTSE All-Share Index. Therefore, movement and return of the fund highly depends on the fluctuation and return of FTSE Index (FTSE, 2015). One positive aspect of selecting index fund is that such funds include passive fund management. In other words, the investor does not need to rely on the potential and capabilities of the fund managers. Hence, only market risk is associated with such investment, no risk related to the fund managers’ decision can affect the return possibility of the investment (M&G Investments, 2015). Therefore, the fund management charges and brokerages for churning the fund tends to be low as compared to any other equity funds. As the investment horizon for this fund of Dr. Foster is not known, it is assumed that Dr. Foster had kept the money into the fund for either 1 year or 5 years.Considering that, Dr. Foster had invested for 1 year, from the above graph it is evident that the fund has encountered high fluctuations over the period of time and has been able to generate a return of 6.6% which is almost similar to the returns of dent funds. Whereas, over a long period of 5 years the same fund has grown, sharply generating a return of more thn 11% (FTSE, 2015).In general, it has been noticed that though the idex fund takes the opportunity of upside trend of market, there is no scope for downside protection when the market is falling steadily. In fact, the scope for churning the portfolio is very less. For instance, in a balanced fund, when the porfolio manager suspects that the marekt is going to be bearish, he shift certain amont from the fund to some debt instuments so that the fixed return can be obtained and the aggregate porfolio does not show a negative return. Therefore, by investing in the M&G Index Tracker Fund, Dr. Foster has to forgo as such possibilities

This is a preview of the 10-page document
Open full text

Reference

List

Financial Times, 2015. FTSE 350 IDX. [Online] Available at: <http://markets.ft.com/research/Markets/Tearsheets/Summary?s=TRINMX:FSI> [Accessed 3 March 2015].

FTSE, 2015. FTSE UK Index Series. [Online]. Available at: <http://www.ftse.com/products/indices/uk> [Accessed 3 March 2015].

Kendall, G. L. and Rollins, S. C., 2003. Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed. London: J. Ross Publishing.

M&G Investments, 2015. Index Tracker Fund. [Online] Available at: <http://www.mandg.co.uk/investor/funds/index-tracker-fund/gb0031110843/overview/> [Accessed 3 March 2015].

Marston, R. C., 2011. Portfolio Design: A Modern Approach to Asset Allocation. New York: John Wiley & Sons.

Maude, D., 2010. Global Private Banking and Wealth Management: The New Realities. New York: John Wiley & Sons.

Morningstar, 2015. M&G Index Tracker A Inc. [Online] Available at: <http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR04SAD> [Accessed 3 March 2015].

Pompian, M., 2011. Behavioral Finance and Wealth Management: How to Build Optimal Portfolios That Account for Investor Biases. New York: John Wiley & Sons.

Reilly, F. and Brown, K., 2011. Investment Analysis and Portfolio Management. Boston: Cengage Learning.

The Telegraph, 2014. The best foundations for a solid portfolio. [Online] Available at: <http://www.telegraph.co.uk/finance/personalfinance/investing/10323642/The-best-foundations-for-a-solid-portfolio.html> [Accessed 3 March 2015].

United Kingdom Debt Management Office, 2012. Auction of £2,500,000,000 5% Treasury Stock 2025. [PDf] Available at: <http://www.dmo.gov.uk/docs/gilts/public/prospectus/prosp240112a.pdf> [Accessed 3 March 2015].

Zwecher, M. J., 2010. Retirement Portfolios: Theory, Construction and Management. New York: John Wiley and Sons.

Close ✕
Tracy Smith Editor&Proofreader
Expert in: Finance & Accounting, Marketing, Management
Hire an Editor
Matt Hamilton Writer
Expert in: Finance & Accounting, Macro & Microeconomics, Human Resources
Hire a Writer
preview essay on Investment Management
WE CAN HELP TO FIND AN ESSAYDidn't find an essay?

Please type your essay title, choose your document type, enter your email and we send you essay samples

Contact Us