Mr Filou has invested Rs 1 000 000 on the first of January 2005 in the following units managed by the Penny Investment Associates: Table 1: Mr Filou's portfolio Benchmarks Correlation of the investment with its respective benchmark Value of portfolio at 1January 2005 Number of Units in the portfolio at 1 January 2005 All Equities Local +9% Index Fixed Income Index Growth Fund All Equities Local Index Growth Fund Income Fund +5% 0.85 Jan 1-15 January 15January - 2006 31January 2006 +13% 400 000 Mr Coin, the financial analyst of Penny Investment Associates, reports the following movement in the selected benchmarks of the respective investments: Table 2: Movements of selected benchmarks Jan 1 - 15 January 2005 17 525 Buy 850 Units Buy 3750 Units +2.2% Income Fund Fixed Income Index 15January - 31January 2005 Buy 1770 units Sell 1255 Units 0.90 600 000 Table 3 reports transactions carried out by Penny Investment Associates on behalf of Mr Filou. Table 3: Transactions carried out 12 360 +3.8% Feb 1-15 February 2006 +7% Feb 1-15 February 2005 Sell 2150 Units Buy 790 Units 2.1 Calculate the value of each unit as at 15 February 2005. [10 marks] Hence, calculate the value of Mr Filou's portfolio as at that date, clearly indicating the proportion of each investment in his global portfolio. Comment on the reported proportion. [5 marks] Calculate the global rate of return of Mr Filou's investment. [2 marks] Write down the equations to calculate the internal rate of return of each investment (Growth Fund and Income Fund). [3 marks] 2.2 2.3 2.4 2.5 Open-ended mutual funds are highly beneficial to individual investors. Discuss. [10 marks]