Financial Markets

1. Assume you are an investment advisor. Your client is unsure what the   main benefits and reasons for investing in a Mutual Fund or an ETFs are o Explain the main differences and similarities   between each other o  Explain what the main   advantage and disadvantage of investing in mutual funds or ETFs are 

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o Explain the main difference between active   and passive management 
2. Go to o  What   information does the Morningstar Style Box® provide? 
o Morningstar assigns a Rating to each Mutual   Fund. What are the criteria they use to assign this rating? 
o Use the information provided above (style box   and ratings) to choose 5 different mutual funds/ETFs (5 funds/ETFs per each   portfolio) to prepare 3 portfolios for 3 different types of investors: 
1. Aggressive 
2. Moderate 
3. Conservative 
o In half a page for each portfolio, explain: 
1. The rationale behind   choosing the given funds/ETFs per each 
2. The criteria chosen   to build each portfolio 
3. Follow up the prices   for all 3 portfolios for a week. Calculate the return for each portfolio at   the end of the week. 
Explain your results. 


This activity must   meet the following formatting requirements: 
• Main document please   uploaded in pdf format. 
• It is mandatory to   submit an EXCEL file where you explain the different calculations you made. 
• To that effect, please   find 2 tabs in Turnitin submission point. 
• Calculation results   HAVE TO be explained and the calculation steps displayed. 
• Font size 12 
• Double-spaced 
• Harvard Referencing   System 
Due date 

Date: 7th   May 2021 at 14.00h CEST 
Weight towards final grade 

This activity has a weight of 60% towards the final grade. 6
The aim is that the student understands the advantages of mutual   funds and how they can be tailored to meet the investor’s risks profile. 


See the rubric on   the next page.