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Risk Management of Img-A

Autor:   •  August 8, 2017  •  Essay  •  543 Words (3 Pages)  •  169 Views

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Risk assessment

According to the allocation of the fund, there are some risks can be found:

  • In the fund, managers invest heavy percentage on ETF, world UCITS ETF D and Japan UCITS ETF occupied 10.20% and 3.50% of TNA. Even though ETF funds are convenient for fund managers to transact and manage. However, these are also facing strong market risk, because the net value of fund will be affect by the price fluctuation of stocks which they are observing.
  • In the asset allocation, equity asset reached 96.27% especially in UK and US equity market, which means the fund aim to invest in equity area, it is a aggressive equity fund. Although invest a large amount of money on equity market will obtain decent return, they may also under high risk because the price fluctuation of stocks and the change of equity.
  • In the sectors of the fund, regional funds small companies and global fund rank the first position which arrived at 61.70%. Small companies even have high speed of growth and high rate of return, on the other hand, it also facing strong potential of development and debt risk. Furthermore, global fund may also have unstable income and complex invest situation.

Investment assessment

There are some aspects might should to be take into consideration when assess the fund invest strategy. Investors’ preference whether similar with the invest strategy of fund, the fund managers whether provide the largest return to their investors, the invest methods whether suit for their investors.  

The standard deviation was 9.41, as writer mentioned before, fund managers may prefer to allocate money in small companies, even though the investment strategy may gain high level of return, it still under higher risk. Sharp ratio is a way to take risk and return into consideration. The financial report revealed that only reached 0.21, which indicated that  the fund cannot balance the risk and return. Therefore, the fund might suit for investors who are trying to high risk and high return.

Aside from that, in the fund overview, the actual annual management fee was1.500% and the geographical focus was global. The fund invest other transferable securities, cash and near cash( which includes money market instruments and deposits) and other exchange traded, the fund aim to find a more safe and stable way to allocate money in the secondary market. The risk and return ratio reported that only reached 0.24, which indicated that is low risk fund. However, it also obtained low return. Therefore, the fund managers may change their investment strategy to increase their investors’ income.

Furthermore, the historical total net assets of the fund during the past one year, even though it was fluctuation, it increased slowly. TI - LCI Mixed Asset GBP Bal - Global, FM - FTSE WMA Stock Market Growth TR and Investec Managed Growth A Acc Net obtained high YTD, which arrived 17.18, 15.10 and 12.52 respectively. However, the YTD of RF - LIBOR GBP 3 Month only reached 0.46. The fund prefer to invest money in the fixed asset in UK, it also received high return. On the contrary, the LIBOR GBP 3 Month had the lowest return. It is suggested that fund manager managers may choose to invest another securities instead of it .


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