Reasons for investing in a Mutual Fund

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1. Assume you are an investment advisor. Your client is unsure what are the main benefits and reasons for investing in a Mutual Fund or in an index fund with an ETFs.
a. Explain the main differences and similarities between each other
b. Explain what are the main advantage and disadvantage of investing in mutual funds or ETFs versus investing in Equity Stocks.
c. Explain the difference between investing in fixed income and an ETF that follows the S&P 500.
d. Explain the main difference between active and passive management
e. Explain what is the difference between investing in value companies or in growth companies.

2. Go to https://www.morningstar.com

a. What information does provide the Morningstar Style Box®?
b. Morningstar assigns a Rating to each Mutual Fund. What are the criteria they use

to assign this rating?
c. Use the information provided above (style box and ratings) to choose 3 different funds (10 different assets per fund) to prepare 3 portfolios for 3 different types of investors:
i. Aggressive
ii. Moderate
iii. Conservative
d. In half a page for each portfolio, explain:
i. The rationale behind choosing the given funds per each portfolio
ii. The criteria chosen to build each portfolio
iii. The total amount to invest in each portfolio is 1.000.000€.
e. 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 and show them graphically. Compare in the same graph the development of the three portfolios you have chosen and the development in the same period of the S&P500 index. Explain your conclusions.
f. Explain how much is your return in this period, and compare it to an investment in the S&P 500 index.

 

Sample Solution

Mutual funds and exchange-traded funds (ETFs) are both created from the concept of pooled fund investing, often adhering to a passive, indexed strategy that tries to track or replicate representative benchmark indices. Both mutual funds and ETFs offer investors pooled investment product options. Mutual funds have more complex structuring than ETFs with varying share classes and fees. ETFs typically appeal to investors because they track market indexes, mutual funds appeal because they offer a wide selection of actively managed funds. Main difference: With a mutual fund, you buy and sell based on dollars, not market price or shares. And you can specify any dollar amount you want—down to the penny or as a nice round figure, like $3,000. With an ETF, you buy and sell based on market price—and you can only trade full shares.

Cancer that is a heterogeneous disease have wide-range variety in same type of cancer. Every individuals response differently to the treatment. These differences are interest era of personalized medicine. A clinical applications of personalized medicine has wide influence fields. These applications involve diagnosis, screening, prediction, prognosis of treatment efficacy, control of patient after surgery to detect recurrence earlier and classification of patient into the small subgroups.

These subgroups favourably lead to choose targeted therapies. Targeted therapies provide high efficiency to respond rate to the therapy and survival consequences.(8) There are some current test for the varied aspects of personalized medicine (Table 1). Also personalized medicine contribute to the pharmaceutical companies. Because they waste o lot of money for the drug design. (9)

Cancer screening

Genetic and environmental factors are both contributor of the predisposition of cancer (10). Knowing the nature of these contributers is important to prevent the diseases ( adapting lifetstyle and behavior to the conditions). Sometimes genetic factors and cancer that are associated with each other affect significantly clinical intervention. For instance, as mentioned before if mutations occur at breast cancer susceptibility gene 1 and 2 (BRCA1,BRCA2) and at the same time if mutations occur at tumor suppressor genes , there is higher risk to develop the breast, ovarian, hematologic and prostate cancers(11). For these reason, regular screening, surgical measures and receive adjuvant therapies would undergo to prevent. Also genetic tests are used to analyse the inherited mutations DNA mismatch repair genes. Risk of advencing of colon cancer is high at the MLH1 and MSH2 genes(12). Under the light of this information cancer can be precluded with early screening colonoscopy to early detect and treat for cancer. Cancer databases that are about mutation types and polymorphisms are updated for public. These resources can be used to identify new biomarkers for screening.(13)

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