Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your clients, Zitu and Gita Ganguly, met with you a week ago because they were seeking some advice regarding how to invest a sum of

Your clients, Zitu and Gita Ganguly, met with you a week ago because they were seeking some advice regarding how to invest a sum of money that is maturing from a GIC in two weeks. At that time you established that they did not want to invest in individual stocks, bonds, and money market instruments, but wanted the entire amount invested in mutual funds. Although you explained to them that they should select mutual funds from various different companies, they told you that they only wanted to use Mackenzie mutual funds because Gita has an administrative position at that company. They have informed you that they are seeking similar investment advice from at least one other financial advisor at another financial institution, and they are willing to invest with you if you produce the best proposal. You have had a chance to do some research and now you are about to present your recommendations.
Your clients currently have the following financial assets and major personal use assets:
a house worth $800,000, with a $400,000 mortgage
a joint $140,000 GIC maturing in two weeks at a competitors financial institution (this money was originally inherited )
a joint $40,000 non-redeemable GIC maturing in 3 years at your financial institution
each of them has a savings account with a balance of $25,000
Zitu RRSP has $60,000 in a 3-year non-redeemable GIC at a competitors financial institution
Gitas RRSP has $70,000 in a 5-year non-redeemable GIC at your financial institution
neither spouse has a pension plan where they work and each earns approximately $80,000/year
they are both in their late 50s, and their adult children are fully independent
both spouses have invested in various types of guaranteed and equity investments in the past. Given the information above, create a portfolio of mutual funds for their non-registered account using the entire amount that is maturing from the GIC in two weeks.
Ensure that the portfolio meets their suitability requirements.
Create the mutual fund portfolio using only 5 different Mackenzie mutual funds.
Your proposed portfolio should include the fund name, fund code, amount invested, and percentage of portfolio occupied by each of the mutual funds.
2. Asset allocation is known to be an important component of portfolio management. Approximately what percentage of your proposed portfolio is invested in:
a. equities
b. fixed income
c. money market / cash
Show how you calculated those values. You may need to access various infotn sources beyond the Fund Facts documents to help you.
3. Explain why the 5 funds chosen are the ideal combination for this family at this time in their lives. Emphasize those features that make your selected funds stand out. Issues such as various measures of rates of return, level of volatility, management expense, portfolio managers investment philosophy, as well as other relevant issues, should all be addressed in your discussion.
4. Produce the Fund Facts sheets for each of the five funds in your proposed portfolio, as well as any other supporting documentation

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Handbook Of Alternative Assets

Authors: Mark J. P. Anson

2nd Edition

047198020X, 978-0471980209

More Books

Students also viewed these Finance questions

Question

what is computer keyboard

Answered: 1 week ago