Purpose of this assignment: Learn to (1) understand the basics of portfolio construction (2) understand the characteristics of mutual funds and ETFs (3) develop critical thinking skills during the analysis.
Your boss has just asked for a recommendation on the stock mutual fund or ETF that will be used for clients in your firm. Evaluate the quality of these investments and provide reasoning for your selections.
For this assignment:
1. Choose 2-3 stock mutual funds or ETFs that you think are good investment options for clients at your firm.
2. Develop a 1-2 page report (no shorter than 1 full page, no longer than 2 full pages, single spaced) explaining the importance of these mutual funds or ETFs to your boss and the investment committee. Why are these funds good for clients?
3. Assume it is a taxable account.
Things to look at (but not limited to):
Fund size, turnover, taxation issues, fund style, share class, sale load, expenses, fund composition, fund sectors, cash holdings, risk and return, performance relative to the peers and benchmark, etc... Why would any of these matters?
How your project is evaluated
Your project will be evaluated in the following area and by the respective weight
•Understanding of Concepts25%
•Accuracy of your analysis25%
•Completeness of your analysis25%
Client Investment Options: The Exchange Traded Funds (Etf)
Length: 2 pages (550 Words)
Client Investment Options: The Exchange Traded Funds (ETF)
Active investing involves a lot of risk and wastage of time and effort with no guaranteed results even when done by professionals. Passive investing, on the other hand, eliminates the risk. Passive investing can be done through dealing in Exchange Traded Funds (ETF). Holding ETF’s will save the company time and it will lead to higher returns for the clients of the enterprise. The three ETFs to be invested in by the company are The Vanguard Total Stock Market ETF (VTI), the iShares Core US Aggregate Bond ETF (AGG) and the Vanguard FTSE Emerging Markets ETF (VWO).
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