Asset fund management

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Asset fund management

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant information relating to Asset fund management (performance measurement and evaluation). The activity of asset management encompasses a number of key areas including portfolio and fund administration, investment decisions, records and valuation of assets, assessment of the risk, reporting and control measures etc. In this study, we will conduct an analysis of investment decision to be made by Alliance Pension Fund.

Discussion

This study will analyze the investment policies of four different investment managers:

Global Investment Managers (GIM)

Index funds UK (IFU)

City Gilt Managers (CGM)

Enhanced Performance Managers (EFM)

Global Investment Managers (GIM)

GIM is focused to provide conservative investment policy. The management charges are relatively low as compared to other investment managers. They also claim to have high class investment analyst who will examine each and every aspect of the enterprise before deciding to invest. The conservative investment strategy has several benefits, but it also has some demerits. If Alliance pension fund wants their funds to be managed by Global Investment Managers (GIM), they should forgo the expectations of gaining high returns. This is due to the fact, that investment policy followed by GIM is focused to keep the risk to a minimal level, this means that returns would also be at minimal level (Pope, 2007).

Index funds UK (IFU)

The Index funds UK has claimed to provide the performance similar to that of FTSE 100 Index. The manager invests in stock market action, Index funds UK aims to assess the risk / return profile of its portfolio, as well as differences in risk (tracking error) and profitability compared to the benchmark. This phenomenon gives them a competitive edge over other investment managers (Guerrieri & Kondor, 2009).

City Gilt Managers (CGM)

City Gilt Managers (CGM) offers a stable and stationary return for the next five years. This is due to the fact that organization adapts effective bond management technique to extract high returns and keeping the risk at the lowest level. The manager invests primarily in fixed income securities. He is thus led to appreciate the maturity of investments (duration), changes in interest rates (range of yield curve compared to normal) and the rating of its corporate bonds (Dempster, et al., 2009).

Enhanced Performance Managers (EFM)

Enhanced Performance Managers (EFM) claims to offer high returns through hedge funds. Primarily invested in unlisted shares, the manager focuses on the economic soundness of the companies in which it invests and the terms of entry and exit of capital of the company. Hedge funds are characterized by low binding statutes and less automatic use the of the leverage, two points that differentiate them from "Mutuals funds" or "pension fund". However, the vast majority of "hedge fund" investors are having no recourse to short selling and whose investment horizon is between 2 and 5 years, which brings them closer to these types of investors. The fact remains that "hedge fund" will allow short selling and arbitrage transactions of short-term ...