Much has been written about the rise of passive (“indexed”) mutual funds over the years and the accompanying decline of
active (“managed”) mutual funds. While we have touched on these differences in class, there is much more to the story. In
part one of this assignment, your task is to research the ‘passive vs. active’ mutual fund debate.
Using a minimum of three Wall-Street Journal articles as sources, answer the following questions:
1. Explain why passive mutual funds have risen in popularity compared to active mutual funds.
2. State the case for investing in passive mutual funds.
3. State the case for investing in active mutual funds.
4. Where do you see the future of the ‘passive vs. active’ debate heading? i.e., Do you think the flow of investment
will continue to accelerate toward passive funds, or do you think active funds will make a comeback?
Part Two – Mutual Fund Research – 25 points
Select three mutual funds to compare/contrast. The funds you choose should be:
One target/retirement fund using your expected retirement date (active/managed).
One passive/index fund.
One additional active/managed fund of your choosing.
Your selected funds can all come from the same parent company, but they do not have to. Find the following information
on your chosen funds.
– Fund name & company
– Asset class
– Fund objective & strategy
– Risk level (descriptive)
– Beta
– Net Asset Value (NAV)
– NAV 12-month range
– Total net assets of fund
– Top 5 holdings w/% held
– Asset allocation
– Load type/amount
– Expense ratio
– Other fees
– 1-year performance
– 5-year performance
– 10-year performance
– Portfolio managers
– URL for fund
Record your findings in a four-column table in Microsoft Word. Example…
Fund Name & Company Fund 1 – Company Fund 2 – Company Fund 3 – Company
Asset Class Balanced Stock – Large-cap blend Bond – Long-term State Muni
Fund Objective & Strategy etc… etc… etc…
Below your table, answer the following question: If you were going to start saving for retirement and had to choose to
allocate your retirement contributions to these three funds, how would you choose to do it? You are free to allocate all of
the money to one fund or split it out into two or three of the funds as you see fit.
Most importantly, thoroughly explain your choices. Address why you chose the fund(s) you did, your allocation
percentages, and why you excluded any funds you chose to exclude. What were the most/least important factors in your
decision?
Assignment requirements:
Submitted as a Word Document.
Double spaced text; no page minimum, but word/length minimums below
o Standard 12-point font, 1” margins, etc.
o Part one: 450-600 words
o Part two: table, plus 250-350 words
Minimum three (3) citations from the Wall-Street Journal for part one.
o Use footnotes (not endnotes) for your citations.
o DO NOT use MLA/APA citations; simply include a link to the article/source in the footnote.
Address all of the questions above, identifying each question along the way (but do not include the questions
themselves in your paper).
o Ex.: Type “1.”, then your answer; “2.”, then your answer, etc.
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