Mutual Fund Project Research Paper
PROJECT RULES READ FIRST!THIS IS NOT A GROUP PROJECT! DO YOUR OWN WORK. Do not share your work with anyone else. Whoever shares or uses another persons work in their project will receive a zero for the project. The project should be done in Microsoft Word or equivalent. You will print out the project and turn it in on the assigned date. In addition to printing out and turning in the project in class, you are to e-mail your document to me Use single-spaced, 12-point Arial font type.THE PROJECTCongratulations! You just landed your first career job out of college. Even better, your new employer has awarded you a signing bonus that is worth $10,000 after-tax. You have decided to invest it rather than spend it. You decide to forego a financial planner and invest in mutual funds and/or ETFs on your own.The instructions are below, but in general your assignment is to create a well-rounded portfolio by selecting four mutual funds and/or ETFs in which to invest your $10,000.You may allocate your money among the four funds as you wish.Consider all of the different types of funds (money market, stock, bond, real estate, commodities, international, global) and decide which ones will be best for your portfolio.You need to consider all of the things we discussed in class, e.g., a funds objectives and strategies, fund managers, historical returns, minimum investment, loads, expenses, etc.You should look at several mutual fund families and/or ETF organizations. You will select your funds from the list of mutual fund companies that appears at the end of the instructions. If you have a real-life 401-k plan, you are allowed to consider up to two of the funds available in that plan. Just let me know thats the case.You should assume that any interest, dividends, and capital gains/losses from your investments are taxable events. The only affect this has on your selections is that it opens up municipal bond funds as a viable investment if you choose to use them.All the information you need can be found on-line, at the fund websites, and from class presentations.Charts, tables, etc. do not count toward the number of pages listed below.INSTRUCTIONSUsing a maximum of three pages, discuss your personal investment process. Consider all of the steps we discussed in class, e.g. what is your starting point? What is (are) your goal(s)? Discuss your risk tolerance and the type of risks you are willing to take and why. Think through and discuss thoroughly your investment process! (20 points)After going through your investment process, begin to select your four funds. You can select no more than two funds from any one mutual fund company. Discuss and describe the following five points for each fund; use a new page for each fund discussion. Try to limit yourself to one page per fund choice. (14 points for each fund)State the name of the fund you select and its symbol. Tell what kind of fund it is, its objectives, and how the fund achieves its objective(s). Be sure to look at each funds risks, history of returns, expenses, manager(s), strategy, holdings, etc. Discuss the three most important reasons that made you decide to include this particular fund in your portfolio. Discuss any similar funds you considered for this choice and why you rejected them. Tell how much of your money you are putting into this fund and why. (Assume the funds have no required minimum investment.)After your individual fund discussion, and beginning on a new page, describe how each of your selections results in the best portfolio you can have based on your investment process. (20 points)Finally, on another new page, answer this question: After going through this process, are you comfortable enough to continue to invest on your own, or would you consider using a financial planner or robo-advisor to help you? Remember: when using a real person planner, there may be loads, fees, and/or commissions that may cost you anywhere from 1% to 6% upfront or over time. (4 points)YOUR MUTUAL FUND COMPANY CHOICES (for mutual funds and ETFs)American Century BlackRock Eaton Vance Federated Fidelity Franklin Templeton Ivy Funds MFS Oppenheimer PIMCO State Street (especially for SPDR ETFs) T. Rowe Price Vanguard
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