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James and Nadia, aged in their early 50's, own their own home worth $950,000 and each have a car worth approximately $30,000 each. They have
James and Nadia, aged in their early 50's, own their own home worth $950,000 and each have a car worth approximately $30,000 each. They have the following investment assets: Item Amount Ownership Investment Property $750,000 Tenants-In-Common Cash at bank $20,000 Joint Term deposit - 2 year fixed $35,000 Nadia Shares - Australian, blue-chip shares acquired in 2009 for $40,000 $80,000 James Managed fund - Aust. Shares acquired in 2008 for $65,000 $50,000 James Superannuation (both have binding death nomination clauses) $350,000 James $125,000 Nadia . The couple's superannuation accounts are invested in a growth fund with the following allocations: Cash 5%; Fixed interest 25%; Aust shares 35%, Property 10%; International shares 25%. James earns $105,000 p.a. and Nadia earns $35,000 p.a. working part-time. The couple have 2 . children. The couple's risk profile has been determined as conservative. Required a) Determine the couple's overall investment asset allocation using the following table format. Note that your Excel spreadsheet needs to be 'embedded' into your report. (9 marks) Cash Name of investment Total Fixed interest Property Australian shares International shares Total - $ Total - % b) is the couple's current asset allocation consistent with their risk profile? If not, what would be your suggestions as to an appropriate asset allocation for the couple? If you decided that the couple's portfolio was overweight in a particular asset class, what problems might be encountered in re-balancing? (max. 300 words) (8 marks) c) Comment on the ownership of the couple's investments and provide some recommendations and limitations. (max. 150 words) (6 marks)
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