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Advance Fund Management, Alternate Asset, Index, WEEK 6- Analyse a fund7\,…

- - - - Firm with lower CAP
        
        WHEN INVEST, share price move higher than larger cap -> less alpha
- - - - Growth
        
        EPS growth rate
        
        Internal growth ratre
        
        Longer term basis
      - Value
        
        BV/P
        
        E/P
        
        Dividend /Price
        
        Short term basis
      - Economic crisis
        
        Growth generally do better
        able to renovate
      - Economic rising
        
        Value performed better
        as Firms comes out of distress
- - - - barbell outperform
    - - bullet outperform
  - - - Upward sloping
      - Longer time yield > shorter time yield
      - Economic condition
        
        Economic Growth
        
        High inflation
    - - Downward sloping
      - Long term yield < short time yield
      - Economic condition
        
        Often seen as a recession indicator
        
        Future economic slowdown
        
        Lower future interest rates
    - - Steepening curve favors short duration
      - Flattening curve favors long duration
      - Curve inversions often benefit government bonds
  - - - Longer duration = Higher price volatility
- - - - based on bond valuation or weighting
      - NOT PERPETUAL
- - - - TA <2 = PASSIVE INVESTMENT 2.5%< TA<7.5% - LOW ACTIVE INVESTMENT TA > 7.5% HIGH ACTIVE INVESTMENT
- - - - Constraint
        
        α =0
        
        α = extra ordinary return (actual)
        
        Consider consistency and significance
        
        β =100%
        
        β - Expected return
        
        CAPM
        
        0
      - S = style
    - - CONSISTENCY
        
        significance at 10% -> 9/10 will perform above critical region
- - - - Constructed base on investor's objectives and constraints
        
        Risk vs return
        
        In Absolute vs Relative
        
        Absolute
        
        Return at x%
        With or without inflation
        
        Risk
        
        Absolute at risk
        
        Maximum drawndown
        
        Sharpe ratio
        
        Relative
        
        Vs BM
        Vs other relative fund
        
        Risk
        
        2 more items...
        
        Return
        
        Performance RATIO
        
        Correlation of asset/Subasset
  - - - TRACKING ERROR
- - - - May include Sponsors
      - May include Advisor team member
      - Dependent Board member
        
        Management team
      - Independent board member
    - - Align with Investor
        
        Regulate and monitor CEO
        
        Decide Compensation
- - - - due to concentration
    - - Due to poor past performance
    - - Higher net outflow relative to peer
        
        Poor performance
- - - - Operarate similar to traditional firm
      - Can have leverage
      - Can have short position (limited )
      - Advantage
        
        Liquidity (provided if there is enough buyer/seller)
      - PASSIVE VS ACTIVE
        
        Premium vs discount
        
        Passive fund
        
        Price at value
        
        Active fund
        
        Price below NVA
        
        Reflected arbitrage
        
        Price of FUND =8, Price of asset =10
        
        1 more item...
  - - - No leverage
      - No short position
- - - - Purchase power
      - Opportunity cost
      - Benefit or yield spread
      - The spread is the transaction cost
  - - - Trade size (compared to the asset)
      - Socratic method
  - - - Positive relationship
        
        Impose Market Impact cost -> impose opportunity cost
        
        IF TRADE -> TRANSACTION COST
        IF NOT TRADE -> OPPORTUNITY COST