Executive Summary Most businesses rely on capital and investments to initiate and grow their businesses. These businesses rely on different sources of capital income in undertaking their business needs. Some of the common forms of investment include bonds, stocks, certificates and Exchange Traded Funds…
Download file to see previous pages...
Most of these investors turned to government bonds, certificates and private or corporate bonds from reputable firms (Madura, 2008, p.13). This trend led to the emergence of special funds which allowed small investors to pool funds and investment in a number of securities or stocks. These funds are managed by fund managers which became popular with huge companies like insurance firms and banks. However the costs of managing these funds were high and some investors looked for other options to invest. This led to the emergence of Exchange Traded Funds (ETFs), which allowed investors to put their money on investment funds to be traded on stock exchanges (Abner, 2010). ETF investment funds incorporate an array of assets such as stocks, commodities or bonds and trades at a price close to the net value of these combined investments. For the many years it has been in existence, EFT’s have been successful with current stock markets due to its flexibility and low risk. Table of Contents Executive Summary 1 Table of Contents 2 Introduction 3 Individual Analysis 3 EFT Analysis 5 Swiss Based ETFs 5 Other Managed Funds (ETFs) 6 Personal Asset Allocation 8 The art of investing requires careful planning in asset allocation since the way you allocate your assets reflects the return on your investment. For instance, if you have $ 100, 000, you should invest in a number of investment options. Time factor is one of the most crucial factors to watch out while investing. Looking at the Swiss market, we witness that the some mutual funds have been performing very well compared to some ETFs. Therefore, it not easy to conclude that mutual funds are better than ETFs or vice-versa, the most important factor is tracking these investments over a suggested period of time (Ferri, 2011). A look at ComStage Stoxx Europe 600 ETF Household goods based product we notice that this ETF tracks household goods stocks in the Swiss market. This ETF has performed well over the past two years returning 40.2% compared to the ComStage Stoxx Europe 600 Food & beverages ETF which returned only 24.1% as witnessed by table 4 in the appendix. In comparison to the United States of America where there is a mid cap fund that has returned over 41.87%. This performance is better than the ETF based investment option in Switzerland (Wagner, 2008). This mutual fund is known as the JB holdings fund and it has invested in different segments based on a selected benchmark. A list of investments in the JB holdings fund is shown by table 5 in the appendix. Based on the analysis of the different ETFs and funds listed above, it is difficult to choose the best investment option by solely choosing and ETF or fund based investment (Madura, 2008). The best investment decision to undertake when investing in an ETF or fund is to analyze the industry or benchmark used in implementing the fund or ETF product. Time factor is also very important since most ETFs or funds take a minimum of three years for the investment to make marginal gains. 8 Current Investing Trends 8 References 12 Appendix 14 Introduction The art of investing is very difficult and challenging and many a times, people find it difficult to invest. Several investment options are available to potential investors interested in making profits. Investing is a risky venture and many people prefer to invest in low risk investments. As a result, many investment banks and
...Download file to see next pagesRead More
Cite this document
(“Money Management - Portfolio of funds or ETF Essay”, n.d.)
Retrieved de https://studentshare.org/business/1392704-money-management-portfolio-of-funds-or-etf-using
(Money Management - Portfolio of Funds or ETF Essay)
“Money Management - Portfolio of Funds or ETF Essay”, n.d. https://studentshare.org/business/1392704-money-management-portfolio-of-funds-or-etf-using.
Simon had selected the companies himself and had chosen well known British companies such as Tesco. Simon’s stockbroker is Louis who does not believe in making unnecessary changes to portfolios. Apart from some rebalancing after the initial impact of the credit crisis to make each of the ten holdings approximately equal in value at the time the portfolio has been largely unchanged for several years.
In order to make investments, first of all it is required to examine own risk profile in order to evaluate overall acceptance to take risk which is influenced by numerous factors such as current financial situation, personal needs and goals, time horizon, structure of my current investment, risk tolerance attitude, investment goals and objectives, liquidity, age and income and degree of familiarity with investment issues.
In their endeavour, these researchers and academicians have used various methods and techniques to test the market efficiencies and have therefore come up with different results. It is however important to note that these tests have been able to provide results that are generally similar.
es, and derivatives where an investor invests his or her money to mitigate the risk of holding a particular asset through diversification. Diversification of investment spreads the risk over many assets. The concept of simple portfolio diversification is that some securities may not perform as anticipated but other assets might exceed in performance making the actual return of the portfolio reasonably close to anticipated return.
Money market mutual funds aim at limiting losses incurred because of market, liquidity, and credit risks. They preserve the principal in the investment and bring in modest dividends. Though there is fluctuation in the interest rates, the Net Asset Value of the funds remains at a $1 per share constant.
Stocks on the other hand are funded finances that stand as a sign of one's ownership with regards a particular company. Within the scope of this financial thread, it could be noticed how the different financial assets of the business organizations are being planned and managed.
Trading in ETFs is at some degree different to trading in a particular stock and even to mutual funds. An ETF is like an umbrella that scopes a group of stocks in specific investing theme, as opposed to a mutual fund that is merely some group of
In effect a weighted average of sub period internal rates of return between cash flows is generated. But this method has a drawback of having to capture all the data at the point of each cash flow and in
2 Pages(500 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic Money Management - Portfolio of funds or ETF for FREE!