Background of Investment strategy and portfolio management

This case study is about Daly Capital. In 2014, this UK mutual fund was established. The point to ponder regarding this mutual fund is the 6-year lock in period. For this period, the investors have been restricted from withdrawing their funds which also includes the selling of the units as a part. The funds inflow for Daly Capital is subject to the strong competition. As far as the investment is concerned, the investment pool of Daly Capital includes as given: UK equities (20%), Middle East equities (20%), Chinese equities (10%), UK corporate bonds (15%), European corporate bonds (11%), European government bonds (10%), UK government bonds (10%), and cash and short-term instruments (4%). As of 31st Mar 2019, the fund holds £600 million of assets.

Forecasts of Investment strategy and portfolio management

Daly Capital tends to forecast for the fund outflows to exceed (5% per annum) from the fund inflows from January 2020. This pattern will be followed for the next 6 years. This 5% figure can be interpreted as given:

5%= (fund outflows during year – fund inflows during year) / total assets as on 1/04/2019

Next meeting of investment committee of Daly Capital

The meeting of the investment committee of Daly Capital is to be held on 13 December, 2019. The agenda of this meeting is to discuss regarding the future investment strategies, strategic asset allocation and tactical asset allocation ranges. Just like any other organization, Daly Capital is to minimize the risk factor associated with the varying investments in different markets and the portfolio. Also, the profit maximization for the said investments is the most significant aim of the UK mutual fund. It is therefore required to hold the meeting for having discussions over the current performance and the comparison of what is achieved and what is expected by the mutual fund in a specified time period.

Daly’s objective of Investment strategy and portfolio management

Daly Capital (UK mutual fund) is established with the objectives as given:

A maximum possible diversification for achieving the balance between the asset investments. It thus helps to reduce the need for having the heavy amounts in order to maintain and manage the separate portfolio individually.

To preserve the original and the actual capital of the extinction.

To minimize the risks associated with the assets and the securities in order to obtain the maximum return on the investment.

To minimize the loss of capital for the purposes of the conversion of assets to the cash.

To ensure the continuity and the stability to the income levels.

To maintain the capital growth especially in the case where the capital growth is perceived to be the most significant and the important goal of the fund manager as well as the investor.

The professional management of the funds and the resources: This UK mutual fund is to provide the services for the professional management of the finance for those who may not have the enough time or the skills to manage their resources and the portfolio. The professional fund managers are to better serve these investors for managing their portfolio. It thus helps to reduce the costs associated with the individual funds and assets management (Cuthbertson, 2008).

The investments made in this mutual fund are very liquid investments. Other than the specified lock-in period, the investor’s funds are available to them at any point of time.

The need to wait for having the funds is reduced. It is so because the mutual fund is well-integrated with the banking system. It better helps to transfer the investors; funds to their accounts.

The investors are to be provided with the wide range of the options & the schemes for making investments. In case of the open-ended schemes they are to be given the advantage for both the investment and the withdrawals.

The investors are given the opportunity for having the less transaction cost. This benefit can better be availed by the investors of the UK mutual fund. It cannot be availed by an individual who directly enters the market.

 To provide the investors updated information regarding the market as well as the schemes. It can better be done by the use of factsheets, annual reports and offer documents etc. It is helpful for both the investors and the financial managers of the mutual fund.

References of Investment strategy and portfolio management

Cuthbertson, K. D. N. a. N. O., 2008. UK mutual fund performance: Skill or luck?. Journal of Empirical Finance, Volume 15, pp. 613-634.