Mutual Fund Analysis

Mutual Funds provide individual investors the opportunity to enter the market through diversified and professionally built portfolios. With little prior knowledge, an individual investor can put money into mutual funds and receive a far greater return than a typical savings fund, with less risk than buying individual securities. Given the opportunity to invest $100,000, we would use it to save for buying a house in 10 years. Our goal is to have at least $300,000 in ten years. Using metrics such as manager tenure, historic return, and sharpe ratio, we narrowed down our portfolio to 6 different funds. We then allocated the money with consideration given to fund style, volatility, and return. The portfolio can be seen in the appendix.

The first fund that we chose was Ivy Asset Strategy. Ivy Asset Strategy is classified as a Large Growth style fund in the World Allocation category. This means that they mainly invest in large companies that they believe have strong growth potential, not only in the United States but also around the world. This is one of the main reasons that we gravitated toward Ivy Asset Strategy. We felt that for a long-term investment we want one of the cornerstones of our portfolio to be a fund that searches for the best growth opportunities, regardless of country or security type. Ivy’s top holdings include gold bullion; a Hong Kong based Entertainment Company, and CBS Corporation. In an ever increasingly global economy, it’s becoming more important that the cornerstone of your portfolio is a company that invests in the whole global economy. The funds manager has been on the job for 17 years. This is a good quality because it means that the manager has had a role in every holding that the fund has, and it maximizes his ability to execute his own strategy. 2012 and 2013 were especially good years for Ivy Asset Strategy, returning 19.33% and 24.32% respectively. They also only lost 25% of their value in 2008, which compared to other Large Growth...