NO.PZ202301040900001002
问题如下:
(2) Recommend a new investment approach based for the Whatsit’s pension plan that is most likely to outperform the market. Justify your response and identify one advantage and one disadvantage of this approach.
选项:
解释:
Whatsit should use the endowment model.
Justification (either two of these is acceptable):
Long time horizon
High risk tolerance
Relatively small liquidity needs
Stuart’s experience with external managers to help with investment
Advantage:
Ability to capture alpha and outperform the market over a long-time horizon, that is, high value-added potential.
Disadvantages (either one of these is acceptable):
The endowment model is costly because of high alternative exposure, active management and outsourcing compared to a passive approach.
Difficult to implement if fund has large asset size.
1、 endowment model
2、To enhance the return,the fund can allocate some alternatives.
The average age of the workforce remains low. employees currently taking distributions from the fund represent approximately 5% of the total workforce. the investment horizon can be very long so they can investment in alternative.
3、The advantage is that it has a high value-added potential
The disadvantage is that it is expensive.