B. is not a sophisticated man who would be able to understand the intricacies of creating and monitoring a traditional portfolio of stocks and bonds.
Given the investment parameters and lifestyle needs of the client, we will look for a mutual fund that is primarily invested in domestic corporate bonds. Mr. B. is unwilling to take any large losses in his portfolio, so safety of principle will important. He needs a good return to provide monthly income and supplement his social security, and is willing to erode the principle somewhat over the next twelve years of his life expectancy. Accordingly, our fund search will focus on bond funds, as there is no need to consider higher risk investments in the international or growth stock sector. Since Mr. B. has neither the risk tolerance level nor the need to grow his portfolio, we will search for a managed bond fund that has low expenses. As for tax consideration, Mr. B. is currently in a low tax bracket and is looking for his money to provide the highest dependable return. Accordingly, he does not require a sophisticated tax strategy using municipal and other tax-advantaged investments.
The screening criteria are: High-yield bond, average manager tenure for the category, no-load funds only, category average fund expenses, four or five star rating from Morningstar, and a Morningstar risk level of below average (Morningstar, 1). This search returned ten funds: Buffalo High-Yield (BUFHX); Fidelity Advisor High Income (FHIAX); Fidelity Advisor High Income Instl (FHNIX); MassMutual Premier High Yield (DHLHYX); Northeast Investors (NTHEX); Regions Morgan Keegan Select Hi Inc A LW (MKHIX); Regions Morgan Keegan Select Hi Inc I (RHIIX); T. Rowe Price High-Yield (PRHYX); T. Rowe Price High-Yield Adv (PAHIX); and Wells Fargo Advantage High Income I (SHYYX)(Morningstar, 1). We have chosen Northeast Investors for Mr. B. because of its higher yield, relatively low expense ratio, and its large asset base.
Cite this document
(“Finance Investor constraints and mutual funds Essay”, n.d.)
Retrieved from https://studentshare.net/miscellaneous/316805-finance-investor-constraints-and-mutual-funds
(Finance Investor Constraints and Mutual Funds Essay)
“Finance Investor Constraints and Mutual Funds Essay”, n.d. https://studentshare.net/miscellaneous/316805-finance-investor-constraints-and-mutual-funds.
Cited: 0 times
B is a widowed, sixty-nine year old retired machinist. His primary source of income is his social security check and interest earned on the $ 200,000.00 he has saved over his lifetime; which is currently in a savings account at his local bank. He is looking for a good…
Furthermore several international mutual fund markets were reviewed for the sole purpose of learning and adopting from the performance surveys of several countries, such as developed markets like those of the US, UK, Hong Kong and Singapore, which are active participants of industry associations of investment professionals in the promotion and evaluation of mutual funds.
Mutual Funds Introduction With the increasing risk of the financial markets brought on by the American recession and the European Sovereign Debt Crisis investors have increasingly looked to safe havens for their money. One of the most prominent and conservative means of investment diversification has been the mutual fund.
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.
Rather than benefiting in terms of a specific dividend payment or bond interest, the investors benefit by receiving a proportionate share of the mutual fund's investment return or suffer by absorbing a proportionate share of the mutual fund's investment loss.
Basically we define each of them so that understanding of the whole concept of mutual funds become much easier. So a stock represents shares of ownership in a public company. Few of the companies which can be called public companies are Accenture, IBM and Ford etc.
The author states that the Defamation Act of 1996 falls short in addressing the problems created by the globalized context. Especially the provision called “Justification” puts the entire burden of proof on the defendant. In 1997, The Sunday Times tried to prove the truth of report about Albert Reynolds, the former Priminister of Ireland.
With due respect to the skills of the incoming managers, still the funds which are already in transition suffers from some common problems-Hedge funds and other traders try to guess what positions might be sold. Sometimes investors in a fund jump ship en masse, forcing
Islamic Sharia does not permit the interest therefore the traditional banking and financial system may be considered as in the direct conflict with the laws of Islamic Sharia. Thus an alternative system of finance based on Islamic