Equinox Asset Management Case Study

Since its inception, Vanguard has offered multi-channel services to all investors. This includes deferred compensation/benefit plans (401K, 403B, 457, pension), plans for children (529, UGMA/UTMA, ESA), and individual savings accounts (retail, IRA). Strategically, it does not offer high cost products like annuities and transactional funds. This is because these investments tend to be expensive for the client recurring commissions are paid to the broker who sold the products. In addition, they are difficult for the client to understand the fees and payout. As part of its commitment to all investors, which includes low income and finance illiterate individuals, Vanguard only offer products that it feels adds value to all types of portfolios.

Often funds are 10 year closed-end funds in which it is expected that all investments will be exited and the fund wound up in

Moderate risk; mutual funds can earn significantly more money but can also potentially lose more.

• Managed growth or capital growth funds—structured to maximise the return from capital growth, that is, an appreciation in the value of the assets held. Less emphasis on income receipts. Higher risk profiles within an investment portfolio; therefore, will usually hold a higher percentage of funds in equity investments and a much smaller portfolio of fixed interest investments.

A pension is a regular payment made during a person's retirement from an investment fund from which that person

REITs plays a very important role in pension funds because it offers both income and upside. Further, it also provides an opportunity for pension funds to increase both liquidity and returns, and decrease volatility that will attract them so as to boost their investments in REITs.

possible. So let it be known that bonds and mutual funds are safer and have less risk than

5.) What is your recommendation as to whether HVC should commit the additional $100,000 in the first year?

For the majority of working Americans, the most common vehicle for owning mutual funds is through their employer's retirement plan, but very few people are making the most of this mainstay of retirement planning.

3. How does the ACM approach affect the recruiting, training, and management of ACM partners?

Our company has been providing their employees with a pension plan for many years. However, these benefits plans have to be reviewed and possibly revised after the recent acquisition of XYZ Company. Through the use of a funding agency, payments are invested so that periodic payments can be made to the employee during retirement. Defined contribution and defined benefit are the two most common types of pension plans.

BP America had a different defined contribution plan. The company offered employees the opportunity to buy shares of company stock, invest in a stable income fund managed internally and seven public mutual funds. The mutual funds included three active funds on US equities, one active fund on international equities, two active balanced funds that invested on bonds and stocks, and one index fund. Plan assets were valued at $2 billion, and the plan had 12,892 participants, making it smaller to Amoco’s. In contrast to Amoco’s plan, only 16% of the assets were invested in company stock, and 51% of the assets were invested in the stable income fund. The rest of the assets were invested mostly in one of the equity funds. Each participant on average had assets of $156,800 in the plan, and made annual contributions of about

The Financial System Inquiry (FSI) released a recommendation stating “Seek broad political agreement for, and enshrine in legislation, the objectives of the superannuation system and report publicly on how policy proposals are consistent with achieving these objectives over the long term”. This phrase was directed at the government with respects of them agreeing with the intent of the superannuation system for providing income within retirement instead of relying entirely on the age pension. However, that isn’t the only objective of the superannuation system, the objectives branch off into multiple subsidiary objectives such as

Pension funds are any plans, funds or schemes which provide retirement income. The money in them varies from some offering very little making it not worthwhile for their holder to retires, whilst others pay more than the employee has earned in his lifetime. Examples of the former are the present-day crisis with Chicago teachers who have found that their pension is giving them as little as 42,000 per year ((NYT Times (September 19, 2012) Next School Crisis for Chicago: Pension Fund Is Running Dry). Examples with the latter are the absurd instances of Yonkers, where policemen in their 40s are retiring on $100,000 pensions (more than their top salaries), or in California, where payments to Calipers, the biggest state pension fund, soared while financing for higher education was cut (ibid). The largest 300 pension funds collectively hold about $6 trillion in assets (Global Investment

Unlike mutual funds who only charge a management fee, much of the hedge funds compensation structure is linked to the fund performance. To avoid cases of managers charging the investor performance fees twice for the same returns, there is a prescription that managers should not charge any fee for a fund that has lost ground (Boyson, 2010). However, when the performance surpasses the previous performance level known as a ?high water mark?, the manager can charge the performance fees once again. Furthermore, many funds may also carry out a hurdle rate that managers must achieve before they charge any incentive fees (lecture notes).