Financial Markets

1. Assume you are an investment advisor. Your client is unsure what the   main benefits and reasons for investing in a Mutual Fund or an ETFs are 

o Explain the main differences and similarities   between each other o  Explain what the main   advantage and disadvantage of investing in mutual funds or ETFs are 

o Explain the main difference between active   and passive management 

2. Go to https://www.morningstar.com o  What   information does the Morningstar Style Box® provide? 

o Morningstar assigns a Rating to each Mutual   Fund. What are the criteria they use to assign this rating? 

o Use the information provided above (style box   and ratings) to choose 5 different mutual funds/ETFs (5 funds/ETFs per each   portfolio) to prepare 3 portfolios for 3 different types of investors: 

1. Aggressive 

2. Moderate 

3. Conservative 

o In half a page for each portfolio, explain: 

1. The rationale behind   choosing the given funds/ETFs per each 

portfolio 

2. The criteria chosen   to build each portfolio 

3. Follow up the prices   for all 3 portfolios for a week. Calculate the return for each portfolio at   the end of the week. 

Explain your results. 

Format 

This activity must   meet the following formatting requirements: 

• Main document please   uploaded in pdf format. 

• It is mandatory to   submit an extra document file where you explain the different calculations   you made. 

• To that effect, please   find 2 tabs in Turnitin submission point. 

• Calculation results   HAVE TO be explained and the calculation steps displayed. 

• Font size 12 

• Double-spaced 

• Harvard Referencing   System 

Due date 

Date: 7th   May 2021 at 14.00h CEST 

Weight towards final grade 

This activity has a weight of 60% towards the final grade. 6