Required: Discuss the following in your essay (approximately 1,000 words and no more than 1,500 please): What each of the above actually refers to and what it means. What is your view, giving a...

TOM PONDERS MANAGED FUNDS
Req: 1
What types of managed fund investments would you set for Tom? Include in your answer some discussion of the types of funds you would consider, the investment objectives you would set, and any investment services (eg, withdrawal plans) you would seek. Explain.    Comment by PlagScan: Possible sources: PlagScan document 2024859 PlagScan document 2025030 PlagScan document 2024939
Ans:-
As discussed in the case, TOM intends to make a long term investment of $ 10,000 lumsum initially and want to deposit $ 150 at the end of each quarter till the time he reaches to superannuation. The main aim of his plan is to save a sufficient funds for his life after retirement to meet his family needs and to get rid off from wo
ies for his children without looking forward for any support from any agency.     Comment by PlagScan: Possible sources: PlagScan document 2025030 PlagScan document 2024859 PlagScan document 2025052 PlagScan document 2025144 PlagScan document 1997751 PlagScan document 2001452 PlagScan document 2025137 PlagScan document 2007243    Comment by PlagScan: Possible source: PlagScan document 2036178    Comment by PlagScan: Possible source: PlagScan document 2025030    Comment by PlagScan: Possible source: PlagScan document 2025123
After hearing his financial information and future plans and objectives, we discussed different investment options available in the investment market with Mr. Tom. We discussed the following fund investment opportunities:-     Comment by PlagScan: Possible sources: PlagScan document 2024859 PlagScan document 2024939
1. Capital protected managed fund
2. Childs education saving fund.
3. Geared investment managed fund.
4. Ethical investment managed fund
5. Hedged managed fund.
6. Indexed managed fund.
7. Managed investment account fund.
8. Property trust managed fund
9. Investment bonds managed fund
As the requirement of Mr. TOM was to meet the financial needs after retirement of his family and his children education, so Child’s education savaing fund was discussed in detail.    Comment by PlagScan: Possible source: PlagScan document 2034964    Comment by PlagScan: Possible source: PlagScan document 2034964
Child’s Education Saving Fund
This fund is designed and managed to provide opportunity to low and middle income group people to save for the future requirement of their children education. The Govt provide incentives on long term investment in Child Education Saving Funds in the form of tax rebates. So investment in this fund will be tax effective for TOM.     Comment by PlagScan: Possible source: PlagScan document 2025030    Comment by PlagScan: Possible source: http:
onlinehelp.microsoft.com/en-us/msn/azinvestglossary.aspx
Tax Incentives
Any investment made in Child’s Education Saving fund and earning from this fund is not to be reported in the tax return of the investors. So the earning from this funds remain in the accounts of the investors and grows gradually.     Comment by PlagScan: Possible sources: PlagScan document 2024859 PlagScan document 2025144    Comment by PlagScan: Possible source: PlagScan document 2024859    Comment by PlagScan: Possible sources: PlagScan document 2024859 PlagScan document 2025144
Further that investors can withdraw money from this funds at any time, however, as discussed this fund is basically to meet the educational expenses of the children under care, investors will have to pay penalty tax for utilization of money for other than educational expenses.
Who can invest in Child Saving Education Fund
Any person having age more than 16 years can investment in the Child education saving fund at any time for the education of their children. The investors of this fund can be parents, grandfather, grandmother, uncle aunts.
Method of Investment
Investors can invest in this fund either in lumpsum or a regular monthly or quarterly instalment. Any change in original plan can be made without any penalty or fee. The maximum limits of this plan per child is $ 3,65,000 per child. This limit is reviewed annually according to rises in cost of child education expenses.
Capital Protected Management Fund
The next investment proposal suitable for TOM is investment in capital protected managed fund. This fund guarantee for payment of 100% initial investment even if the fund has performed poorly and in this way is considered as risk free investment. For example, if investors has deposited $ 10,000 initially, he will receive atleast$10,000 at the time of expiry of term even if the fund performs very poorly and suffer losses. Investor will not bear any loss of his capital investment.     Comment by PlagScan: Possible sources: http:
www.morningstar.com.au/NewPort/images/Msta
NewDataDefs/DataDefinition.aspx?Mode=PORT http:
quote.morningstar.com/fund/fundDefinitions.htm http:
onlinehelp.microsoft.com/en-us/msn/azinvestglossary.aspx PlagScan document 2024859 PlagScan document 2025052 PlagScan document 2024888 PlagScan document 2025144 PlagScan document 2025030 PlagScan document 1997819 PlagScan document 1997927 PlagScan document 1999006    Comment by PlagScan: Possible sources: PlagScan document 1997751 PlagScan document 2001452    Comment by PlagScan: Possible sources: http:
quote.morningstar.com/fund/fundDefinitions.htm http:
www.morningstar.com.au/NewPort/images/Msta
NewDataDefs/DataDefinition.aspx?Mode=PORT http:
onlinehelp.microsoft.com/en-us/msn/azinvestglossary.aspx PlagScan document 2024859
It is imperative to note that protection varies from proposal to proposal depending on the size of the investment. It is therefore necessary that investor should read product disclosure statement to understand the full details of the fund.    Comment by PlagScan: Possible source: PlagScan document 1845743    Comment by PlagScan: Possible sources: https:
scs.fidelity.com/global/search/content/glossary.shtml http:
quicktake.morningstar.com/DataDefs/FundSnapshot.html http:
www.morningstar.com.au/NewPort/images/Msta
NewDataDefs/DataDefinition.aspx?Mode=PORT PlagScan document 2024859 PlagScan document 2025052 PlagScan document 2025030 PlagScan document 1997751 PlagScan document 2001452 PlagScan document 1997819 PlagScan document 1997927 PlagScan document 1999006 PlagScan document 2024908 PlagScan document 2007243 PlagScan document 1845743 PlagScan document 1953282 PlagScan document 1953783 PlagScan document 1952997 PlagScan document 1952998 PlagScan document 1953003 PlagScan document 1953007 PlagScan document 1953017 PlagScan document 1953019 PlagScan document 1953022 PlagScan document 1953034 PlagScan document 1953036 PlagScan document 1953040 PlagScan document 1953208 PlagScan document 1953209 PlagScan document 1953217 PlagScan document 1953231 PlagScan document 1953740
Types of Capital Protected Funds
In the past, Capital protected funds have grown as they have limited losses in case falling markets worth of the fund portfolio. These funds remain available at different interval of the financial years.
The capital guarantee of the fund can be achieved as under:-    Comment by PlagScan: Possible source: PlagScan document 2025052
1. A simple guarantee where the fund managing authority uses hedging to cover the fall in the market worth of the fund portfolio.    Comment by PlagScan: Possible sources: PlagScan document 2025052 PlagScan document 1845743
2. Fund Managing authority can invest portion of original investment in different secure bonds that will pay off original capital at maturity.
3. By obtaining portfolio insurance coverage
Inflation Facto
It should be kept in mind that capital protected funds guarantees for original investment on the expiry of contracted tenure. No doubt, the contract will be expire after long time and due to inflation real value of money will be suffer due to inflation factor. This factor is not covered under guarantee.    Comment by PlagScan: Possible sources: PlagScan document 2024859 PlagScan document 2025052 PlagScan document 1997751    Comment by PlagScan: Possible source: PlagScan document 2024859
Req 2.
Consider the ratings and rankings of blend medium share funds reviewed by Morningstar. Nominate three you would recommend to Tom.
Ans:-
Morningstar has categorized investors and investment manager and professional to make a rationale comparison between investment funds. These categorizations are based on the securities of each investment.     Comment by PlagScan: Possible sources: https:
scs.fidelity.com/global/search/content/glossary.shtml http:
onlinehelp.microsoft.com/en-us/msn/azinvestglossary.aspx
The risk involved in each portfolio can be identified and fund can be ranked according to performance. Morningstar has placed funds in different categories according to the performance of portfolio statistics on the bases of performance over the past history.    Comment by PlagScan: Possible sources: PlagScan document 2024859 PlagScan document 2025144    Comment by PlagScan: Possible sources: PlagScan document 2024859 PlagScan document 2025144
This ranking is changed on the basis of the performance. Morningstar has ranked the investment funds as under:-     Comment by PlagScan: Possible source: PlagScan document 2025144    Comment by PlagScan: Possible source: PlagScan document 2007243
Domestic Stock Funds
70% of total funds invested in domestic stocks are known as domestic stock funds. Based On this investment style, Morningstar has categorized domestic stock fund in one of the following nine categories;-     Comment by PlagScan: Possible source: http:
quicktake.morningstar.com/DataDefs/FundSnapshot.html    Comment by PlagScan: Possible source: http:
onlinehelp.microsoft.com/en-us/msn/azinvestglossary.aspx
· large growth, large blend and large value    Comment by PlagScan: Possible sources: http:
quicktake.morningstar.com/DataDefs/FundSnapshot.html http:
quote.morningstar.com/fund/fundDefinitions.htm http:
portfolios.morningstar.com/fund/portfolio http:
www.morningstar.com/InvGlossary/morningstar_category.aspx http:
ibd.morningstar.com/quicktake/standard/docs/datadefsnap.html?ticker= http:
www.morningstar.com.au/NewPort/images/Msta
NewDataDefs/DataDefinition.aspx?Mode=PORT http:
quicktake.morningstar.com/DataDefs/FundCategoryRating.htm    Comment by PlagScan: Possible sources: http:
quicktake.morningstar.com/DataDefs/FundSnapshot.html http:
quote.morningstar.com/fund/fundDefinitions.htm http:
portfolios.morningstar.com/fund/portfolio http:
www.morningstar.com/InvGlossary/morningstar_category.aspx http:
ibd.morningstar.com/quicktake/standard/docs/datadefsnap.html?ticker= http:
quicktake.morningstar.com/DataDefs/FundCategoryRating.htm
· medium growth fund, medium blend fund, medium value fund
· Small growth, Small blend and small value
International Stock Funds
Funds investing 40% or more in foreign stocks are known as International Stock Funds and are grouped in International stock category.     Comment by PlagScan: Possible sources: http:
quicktake.morningstar.com/DataDefs/FundSnapshot.html http:
quote.morningstar.com/fund/fundDefinitions.htm http:
portfolios.morningstar.com/fund/portfolio http:
www.morningstar.com/InvGlossary/morningstar_category.aspx http:
ibd.morningstar.com/quicktake/standard/docs/datadefsnap.html?ticker= http:
www.morningstar.com.au/NewPort/images/Msta
NewDataDefs/DataDefinition.aspx?Mode=PORT...