Investment Portfolio Management Market Place Exhibit

Question: Describe about the Investment Portfolio Management for Market Place Exhibit. Answer: 1. Identification and outlining of the main asset classes we talk about the investment and outlining of a characteristic of each asset class in regards to investment purposes. Asset class signifies the financial instruments that behave similarly in marketplace. Exhibit to different main asset class they are outlined as securities, equities, and fixed income. Equities- It generates higher returns in the long term than other type of investment and help meeting longer objectives. Here the value fluctuates thereby increasing and decreasing the fund prices[1]. Fixed Income- These are usually loans that are taken out by government or company paying at fixed interest rate over an assigned period of time. The investors get a more predictable income offer after comparing to riskier asset classes like equities. Securities- This is a traditional economic function of the purchase and receives income and achieving capital gain. It offers higher rate of interest than bank deposits. Here the interest payment gets missed and creditors take control of the company to recover the investment. 2. Meaning of Capital and Income and an example of each. Capital is defined as the assets that trustees receive with the initiation of the trust like land, property investment and cash. Whereas as capital investment is the fund invested in a firm or enterprise in order to strength the objectives of the business. For example capital is purchased to help a company produce goods or service providing like goods including buildings, furniture, equipment machines and fixtures[2]. Income is the regular return that has a rise on a capital asset. Income investing aims to pick companies who render steady stream commonly the fixed income securities such as bonds. For example profits on trading activities, dividend paid by company, etc. 3. Identification and explanation of the various costs, fees and charges that an investor would be subjected to when buying and selling investments through a managed fund investment. There is regular charging in fund holding and these ongoing charges pay the running of fund. 4. Explanation of what is meant by diversification within asset classes and provide an example. Diversification reduces risk through investing broad range of assets. Multi manager funds work and achieve diversification using the benefit that exist asset classes. It is typically confined with allocation of capital within those asset classes and involves distribution of assets and reduces risks within each asset class[3]. It is also a process focused on the return and risk characteristic of individual securities. This is irrespective of how the return correlate with each other. An example to show diversification working within asset classes is a long short equity fund with that to long cyclical stocks. Here funds go short as well as long and look for the benefit from share prices. 5. The main Derivative Contracts traded in Australia. Interest rate swaps are a standout amongst the most generally exchanged subordinate items in the Australian monetary business sector with over $10 trillion in notional worth executed in 2013. ASX's deliverable swap fates (DSF) contracts are an inventive arrangement of items firmly coordinating the qualities of OTC financing cost swaps. References DeFusco, Richard Armand, Quantitative Investment Analysis (Wiley, 2007). Levy, Haim, Stochastic Dominance (Springer, 2006)