Question

Imagine you are the manager of a pension fund that invests large
amounts of money in companies, most of which are listed on the
London Stock Exchange. Returns on your investments provide the
funds to pay the pension beneficiaries. State the proportions of fixed
interest securities (i.e. debentures, preference shares, etc.) and
ordinary shares you would choose with a view to minimising the risk
to funds and maximising returns. State briefly the reasons for your
investment strategy.

(ii) State a source from which you would get information on which to
base your investment strategy.

(iii) State a possible consequence of other fund managers thinking in a
similar vein to yourself.

(iv) Select 5 listed London Stock Market companies from different
sectors (such as Banking, Information Technology, Media,
Chemicals, Construction, Retailers, Transport, Mining, Oil & Gas,
Pharmaceuticals, Property, etc.) in which you intend to invest
substantial amounts of capital with a view to seeking a return on your
investment. Briefly give reasons for your selections.

Answer 1

As the pension fund needs to give the normal wage to their individuals. Some time the profits from the settled salary speculation is not as much as the required rate of return. So chief needs to discover the method for getting the arrival from the dangerous speculation to make the rate of return equivalents to the required rate of return.

Directors additionally needs to make the arrangement for capital safeguarding with the goal that fund can manage the fund required resources under point of confinement.

Pension funds are the wellspring of wage for the individuals with the goal that directors can not put bigger resources in the unsafe resources. In the event that the speculation lose its esteem then the fund would be lacking to meet the installment commitments.

Book: Analysis of venture and portfolio administration. Ms:

Each fund supervisors contribute by keeping the topic of the fund as the requirements. so if the other fund directors have a similar kind of the fund then they will likewise put resources into the market specific resources might be extraordinary yet the benefits class will continue as before. That will build the upper side development in showcase that thus will expand the profits of the speculation..

Ans:

Select the organizations by your own and investigation the arrival and hazard prerequisite by keeping in the mind real requirements:

1. Chronicled less vacillated share value that implies more secure speculation.

2. Bond with higher rating like AM. M to stay beyond any doubt secure pay.

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Hope this answer your query.

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