Financial Markets the Management Team Is the Research Paper

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Financial Markets

The management team is the author, who will act as the fund manager. Yours truly will need to hire an assistant, or two, in order to help gather information about the different companies around the world that would make good investments.

The fund is designed on the basis of long-term targets. The long-run expectation is that the fund can earn a CAGR of 10% over the course of 30 years. Some of these gains may be back-end loaded as the transition away from carbon becomes more complete. The one-year and two-year targets are actually less important, as this fund is being marketed to investors with a long time horizon. The one- and two-year returns are targeted at 5% and 7% respectively, but the fund manager recognizes that returns in the short-run are highly dependent on the price of oil. Many stocks in the category will decline in value when the price of oil declines, as investor sentiment shifts away from companies involved in things like alternative energy. Should the price of oil go back up strongly in the next year or two -- a factor almost entirely dependent on the Saudi government -- the fund's returns will reflect that. Short-term objectives are therefore less important for the fund because of the inherently volatility in this category over the short-run.

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The fund will be open-ended. As this fund is going to be run through a major bank, the fund will need to be open-ended, to continue to draw in new capital. A closed-ended fund is one where the initial investment is raised, and no new money can be added to the fund after this initial fund-raising period. That is not the model this fund needs -- new monies are going to be required in order to pursue new opportunities, and that implies the need for an open-ended fund.

The fund is specialized, and will invest around the world where technology leaders operate. Thus, the fees will need to be higher, in order to compensate for the cost of researching globally, but also to cover the transaction fees associated with investing around the world. The MER for the fund is likely to be in the 2.50-2.75 range. This is how the fund will make money. A lot of the research will be done by the fund manager, and technology lowers research costs, but the incremental transaction costs associated with trading….....

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https://www.aceyourpaper.com/essays/financial-markets-management-team-2149389
   

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