Financial market

Answer the following questions related to Mutual Funds.

Much has been written about the rise of passive (“indexed”) mutual funds over the years and the accompanying decline of active (“managed”) mutual funds.

Explain the recent changes in popularity between ‘passive’ mutual funds and ‘active’ mutual funds.

State the case for investing in passive mutual funds.

State the case for investing in active mutual funds.

Where do you see the future of the ‘passive vs. active’ debate heading? Explain.

Select three mutual funds to compare/contrast. The funds you choose should be:

One target/retirement fund using your expected retirement date (active/managed).

One passive/index fund.

One additional active/managed fund of your choosing

Find the following information for each fund. It is probably easiest to create this in a table format (17 rows x 4 columns).

Fund name & company

Asset class

Fund objective & strategy

Risk level (be descriptive; how risky is it?)

Beta

Net asset value (NAV)

NAV 12-month range (high & low)

Total net assets of fund

Top 5 holdings in the fund with % held

Asset allocation

Load type/amount

Expense ratio

Other fees

1-year performance

5-year performance

10-year performance

Portfolio managers

If you were going to start saving for retirement and had to choose to allocate your retirement contributions to these three funds, how would you choose to do it? You are free to allocate all of the money to one fund or split it out into two or three of the funds as you see fit.

Most importantly, thoroughly explain your choices. Address why you chose the fund(s) you did, your allocation percentages, and why you excluded any funds. What were the most/least important factors in your decision?

SUBMISSION GUIDELINES

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ANSWER CONTENT

Alongside the SIE material, we typically have an Activity or set of Case Questions in each chapter. These extension activities are designed to get you to think more deeply and critically about the course content. It is this kind of reflection that ultimately leads to learning, which is my #1 goal as an instructor.

With that in mind, please make sure your answers are robust. Students that offer weak, unsubstantiated answers will receive grades reflective of their effort. Take some time and BS (“build support”) through your answers. Be thorough!