"1200 WORDS"

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Part (1) (5%) The Australian Security Exchange (ASX) boasts one of the biggest Exchange Traded Funds (ETF) in the region.

Go to ASX website 1 and select 1 fund from each of the following category: A-REITS, Infrastructure Funds plus 2 funds from ETF & ETCs. Make sure these funds have been in the market for at least 2 years (July 2015 to July 2017). In addition, use the following criteria in your selection:

a. A-REITS: Use the first alphabet in your first name to select the A-REITS with the same alphabet. i.e. if you name is Michelle, then you could select either MPS, MGR or MIX. If your name is Henry and there is no fund starting with "H" on the list, then go to the next alphabet in the sequence. i.e. you could choose either IEF, IOF or ILF.

b. Infrastructure Fund: Any fund of your own choice.

c. Australian ETF: select one from either Australian Broad Based ETFs or the Australian Sector ETFs category

d. International/Strategy ETF: select one from either: International ETFs, International Sector ETFS, Cash & Currency ETFs, Fixed Income ETFs or Commodity ETF & ETCs.

Form a portfolio and apply the following allocation (a) A-REITS (b) Infrastructure (c) Australian ETF (d) International/Strategy ETF (e) Cash 20% 10% 30% 35% 5%

Question (i) (20%, 500 words) 1. Identify the top 3 assets invested by the infrastructure fund and the profit distribution of the infrastructure fund for part (b) over the last 2 financial years. These are usually available from the annual reports or DatAnalysis 2.

(i) Justify your decision to your selection of fund for parts (c) Australia ETF and (d) International ETF. Why have you decided to select these particular funds over the others?

(ii) Identify three potential factors that might influence the performance of the fund over the next 12 months.

Download their monthly closing prices for the last 2 years (from DatAnalysis or Yahoo! Finance).

(a) Calculate the performance (return) of your portfolio and compare it against the return of the benchmark ASX S&P200 index, that is:

i. Using ASX200 as your benchmark calculate excess return of your portfolio.

ii. If ASX S&P200 if your portfolio's benchmark. Calculate the absolute tracking error of your portfolio over the period.

iii. Discuss your observation from a (ii) above. 1 http://www.asx.com.au/products/managed-funds-product-list.htm F IN30016 A ssignment 2 201 7 Page 3

(b) Investigate over the last 2 years, how much your investment portfolio is influenced by i. The return and volatility of the AUD/USD exchange rate? ii. Return of the equity market in UK, using FTSE as the market benchmark.