WM Lect 5 Wk 6 Managed Funds_Jessica

WM Lect 5 Wk 6 Managed Funds_Jessica - Wealth Management...

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Wealth Management FINS2643 Lecture 5 Tutorial 6 Managed Funds Lecture 5 Summary NAV = (Assets – Liabilities)/ # Shares Beginning Price Average X-year return = [(1+r1)(1+r2)…(1+rx)]^(1/x) - 1 Sharpe Index = (R – rf)/ σ Jensen α = RP – rf – β(Rm – rf) A managed fund is organised as a separate trust and is owned by the unit holders, not by the firm that runs it. The fund is by a “single responsible entity” which invests and manages money and looks after the rights of investors. Management company – run the fund’s daily operations, sell fund units Investment/Portfolio manager – buys and sells shares/bonds and oversees the portfolio Trustee (or custodian) safeguards the securities and other assets of the fund without taking a role in investment decisions 70% super funds: 15% tax on earnings 10% on capital gains Listed v Unlisted Unlisted funds Listed funds Open-ended funds (issues new units) Closed-ended funds (no longer accept new money) Closed ended with fixed number of units Trade at premium or discount (more often) to NAV Suits investment in illiquid or difficult to access assets Exchange traded funds (ETFs) Primary market for unit creation and redemption operating in conjunction with a secondary market, traded on the exchange Ensures price parity between traded unit price on secondary market and NAV Units Fund divided into units of equal value JESSICA YANG 1
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Super and insurance are nearly always open Units valued daily/weekly; listed funds valued on share market Types of Managed funds By assets: o Cash management trusts o Fixed interest o Property trusts o Share or equity trusts o Diversified funds o Index funds o Ethical funds o Mortgage funds o Hedge funds o Exchange traded funds By strategy o Active funds (Higher feeds and trading) o Index funds (Lower fees, lower trading)
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WM Lect 5 Wk 6 Managed Funds_Jessica - Wealth Management...

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