University Investment Analysis: Managed Funds Report

This report analyzes managed funds and investment strategies, focusing on the factors investors should consider. It emphasizes the importance of understanding risk tolerance and return expectations before investing. The report differentiates between secured assets (like bonds and money market funds), which offer lower returns but reduced risk, and unsecured assets (like shares), which offer higher returns but involve greater market risk. It also suggests a balanced approach through mixed asset funds to optimize returns while managing risk. The report provides real-world examples, such as Australian bonds and Telstra shares, to illustrate potential returns and the importance of considering market volatility. The report references sources like ASX mFund and Bloomberg.com to support its analysis, offering insights into making informed investment decisions.

Running head: INVESTMENT
Investment
Name of the Student:
Name of the University:
Author Note:

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INVESTMENT
Answer:
There are several factors, which investors should consider while investing in managed
funds among which the most important factor is the risk taking and the return-earning
propensity of the investor. The investors before investing in any particular managed fund
should check the type of fund. They should find out whether the fund manager or the fund
management company is going to invest in secured, unsecured assets or mixed assets.
The secured assets are prone to lower market volatility and can give more secured
return. They include assets like certificate of deposits, bond funds or money market funds.
These assets are secured but give lower rate of return. For example, a treasury bond in
Australia coded as GSBA18 yields 5.5 percent semi-annually. This means if an investor
invests $50000 he would get an interest of $1375 half yearly or $ 2750 annually on flat rate
(ASX mFund. 2017).
The unsecured assets consist of shares, which are prone to high market risks. They are
good investment options if the propensities of the investor to take risks are high because they
give high returns. For example, the market price of a share of Telstra is $3.52 as on October
13, 2017 at 4.10 pm and can give dividend of 8.81 percent annually. Thus, an investor would
earn a dividend of $ 4405 on investing $50000, which is greater than the interest of $ 2750
yielded by the Australian bond (Bloomberg.com. 2017).
The third investment asset, which an investor can opt for, is a combination of both
secured and unsecured or mixed asset funds. This would allow the investor to balance his risk
and enhance his return. He can invest a portion of his investment in bonds which would yield
him secure returns and the other portion in shares which would give him more returns
(Cholakova and Clarysse 2015).

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INVESTMENT

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INVESTMENT
References:
ASX mFund. 2017. Factors to consider when choosing a managed fund. [online] Available
at: http://www.asx.com.au/mfund/news/factors-to-consider-when-choosing-a-managed-
fund.htm [Accessed 15 Oct. 2017].
Bloomberg.com. 2017. TLS:ASE Stock Quote - Telstra Corp Ltd. [online] Available at:
https://www.bloomberg.com/quote/TLS:AU [Accessed 15 Oct. 2017].
Cholakova, M. and Clarysse, B., 2015. Does the possibility to make equity investments in
crowdfunding projects crowd out reward‐based investments?. Entrepreneurship Theory and
Practice, 39(1), pp.145-172.