Pension Fund Portfolio Management

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1.0 Objectives of Pension Fund Manager: A pension fund manager cannot set objectives unless he knows the relevant characteristics of his clients or beneficiaries. These characteristics include their appetite of risk, desired level of return, details of their existing income, liquidity requirements, tax positions and future liabilities. Once the firm’s investment manager have established the objectives of the investor or fund, they can set about planning the most suitable investment strategies. A pension fund manager may have the objectives of meeting a specified set of future liabilities at minimum overall cost. Investment portfolio policies can be categorized as either active or passive investment strategies. It is essential to all active strategies for the requirement of expectations about the factors, which is influenced on the performance of an asset class. In this case active equity management, this may include of future earnings, dividends and price-earnings ratio. In relations to active bond strategies, it may involve forecasts of future interest rates, interest-rate risk and yield spreads, and involving in foreign securities will require forecasts of future exchange rates. However, passive strategies can be classified minimum expectation output and one common type of this strategy is indexing, which objective is to replicate the performance of a preset index fund or benchmark. 2.0 Rationale of Choosing Fund The firm fund manager may set up that invest in a particular country or geographical region such as Canada, UK, France and Sweden or Asian emerging markets; Japan. Singapore, South Korea. It may also establish funds to invest in particular segments, for example mixed asset allocation, technology, infrastructure and ... ... middle of paper ... ...o-Example.htm [Accessed 17-12-2013] Jones, C.P., 2010. Investments- Principle of Concepts. 11th Edition. Asia – John Wiley &Sons. P-329 Jones, C.P., 2010a. Investments- Principle of Concepts. 11th Edition. Asia – John Wiley &Sons. P-360 Jones, C.P., 2010b. Investments- Principle of Concepts. 11th Edition. Asia – John Wiley &Sons. P-360 IMF, 2013. World Economic Outlook Database. Available at: http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx [Accessed 18-12-2013] Rutterford, J. and Davison, M., 2007. An Introduction To Stock Exchange Investment. New York- PALGRAVE MACMILLAN. P.185 Rutterford, J. and Davison, M., 2007a. An Introduction To Stock Exchange Investment. New York- PALGRAVE MACMILLAN. P.566 Trading Economics, 2013. Japan Stock Market (NIKKAI 225). Available at: http://www.tradingeconomics.com/canada/unemployment-rate [Accessed 20-12-2014]
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