You have been given a client whose “conventional” investor profile matches your own. In your StockTrak account you have access to $1,000,000. Half of this amount or $500,000 represents the client’s portfolio. As a start choose 8-12 mutual funds that will match the Broad and Narrow asset allocations you defined from your Investor Questionnaire.
Your selection of mutual funds should match the broad and narrow asset allocation from the investor questionnaire. In order to do that, take the following steps:
1. Calculate approximate percentages and dollar amounts you will invest in the broad category of stocks/bonds/cash. 100% = $500,000
2. Calculate approximate percentages and dollar amounts you will invest in the subcategories listed in the sample asset allocation table from the questionnaire. (i.e. large equities, high yield bonds…) Again, 100% = $500,000
Your selection of mutual funds should also demonstrate an understanding of the risk return criteria select and purchase the first 8 to 12 mutual funds.
Use the Morningstar database (Fund screener) to choose funds.
To get into the Morningstar go and search rivier.edu then on the right hand side on top you will see library/ERC click that and then you will see ResearchDatabase/Journal on left hand side click that and you will see bunch of subject click on Business and Economic and then you will see Morningstar Investment Research center click that and they will ask for 9 digit number type this number 000036086 and then you should be able to look for the mutual funds.
When you have selected the fund from the fund screener,
Create an excel file to track the mutual funds you purchased on Stock-Trak.
Include your client’s initial position in the fund. The client’s initial position in the fund is the initial purchase amount of each fund on StockTrak.
Identify which asset (broad and narrow) category the fund matches.
Identify each Benchmark you will use to evaluate each fund’s performance.
Include in the excel sheet or in a separate word document a brief explanation of the decision process for each fund selection. That is, what criteria did you use to select each mutual fund for your initial purchases.