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Asset Allocation, Funds Of Hedge Funds, And Due Diligence Case Solution & Answer

Asset Allocation, Funds Of Hedge Funds, And Due Diligence Case Solution 

Ans no.1

The Schlinder’s statement summarizes the principles prevailingin the investment policy of the scheme and the activities accepted by the Trustees to ensure the effective application of the main beliefs. The Executors have identified their investment policy in such a way that addresses the risks set out. To help moderate the impact of the risks; the Executors have:

  • Introduced a lifestyle plan as a default option, which shifts the members’ assets from higher-risk to lower-risk investments as they approach their retirement.
  • Offered a variety of self-select funds across different classes of assets.

The Trustees will go through the investment approach from time to time, and make changes where needed and appropriate.

The most important role of investment trustees is to design, maintain and adhere to the fund’s investment policy, which serves as a guide for everyone involved in the investing process. The formulation of an investment policy statement is one of the most fundamental and underappreciated investment principles. The CFA Institute considers the investment policy to be so vital that it has a number of readings on the subject. Essentially, the investment policy statement aids the money manager by outlining the investor’s goals and limits when putting together his or her investment portfolio. These goals and limits enable the money manager to customize the portfolio to the demands of each individual.The investment policy statement also acts as a contract between the money manager and the customer, protecting both the parties by outlining the investment strategy to be used. An investor’s goals serve as the foundation for developing a strong financial strategy. The investor’s objectives must be clearly stated. Making as much money as possible is a broad objective for a money manager or investor to create a competent financial plan. Indeed, broad aims like these may drive a money manager to invest a client’s money in an improper manner. The investor’s return and risk preferences make up the objectives (Schindler pension funds, 2019)

Investor’s objective is not clearly stated and is missing. The risk and return of investor must be clearly visible. The objective helps manager to make money with the help of broader objectives to create a competent financial plan. The information that has been added is maintenance of investment policy which acts as a guidance principle for everyone. The investors also introduced the lifestyle plan as a default option.

Ans no.2

ThePension Fund’s objective is occupational pension provision within the framework of Swiss occupational pension legislation (BVG) and its implementing provisions for the employees of its affiliated companies, as well as their dependents and survivors. It ensures them against the financial consequences of old age, disability and death. It may offer benefits above and beyond the minimum prescribed by the BVG legislation.

The Board of Trustees issues Rules covering benefits, as well as the structure, management, funding and administration of the Pension Fund. These rules set out the Pension Fund’s relationship to the employers, to the ensured and other entitled claimants. The Rules and their amendments must be submitted to the supervisory authority for review.

The Pension Fund achieved a pleasing performance of +9.8% in 2019 (2008: -1.91%). This resulted in an income surplus of CHF 78.3 million for the financial year as a whole (2018: expenditure surplus of CHF 77.5 million). This surplus income as a result of the Fund’s assets performance…………….

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