When do agency problems arise? How to mitigate? (3)
What are the key agency problems? + Description (2)
What are ways to pay a financial advisor? What are some specific problems? (5)
Name types of regulated funds in the US (3) and in the EU (3).
US: Open-end funds, investment trusts, closed-funds
EU: UCITS, ETFs, AIFs
How big is the market for regulated open-end funds? What share have specific asset classes? (4)
about 70 trn. USD
equity 46%, bond 19%, money market 15%
Who regulates mutual funds in the US and the EU? (2)
What are some characteristics of mutual funds? (4)
shares bought via broker (no secondary market)
value is marked-to-market and reflects NAV
shares created upon demand
price paid is NAV plus fees
What is ‘liquidity transformation’? Why may it lead to inefficiencies? (1)
Name potential conflicts of interests in the context of mutual funds. (3)
What can you say about the outperformance of mutual funds? (2)
What does the Carhartt paper from 1997 say about mutual funds?
What drives flow between funds? (1)
What can you say about fees in regard of mutual funds/ETFs and different asset classes? (3)
What does the Berk, Green (2004) Model state about fund manager performance? (2)
What’s the scale of AUM of ETFs globally? (1)
Where are they traded? (1)
How often do they publish their holdings? (1)
How are ETF shares created/redeemed? (3)
What does creation/redemption ensure? Does that work well? (2)
What does the Pagano, Serrano, Zechner (2019) paper say how ETFs may impact systemic risk? (4)
Increased Co-movement of Asset Prices
Heightened Price Volatility
Arbitrage Mechanism Breakdown
Investors take large correlated positions
What are some obvious differences between mutual funds and ETFs? (4)
ETFs offer immediate liquidity. Mutual funds are “forward priced” daily
Mutual funds must hold cash (and in case sell securities) to pay off investors
ETF holdings are published daily, mutual funds disclose holdings less frequently
ETFs can be shorted, mutual funds can only be held long
Who does usually invest in hedge funds? (3)
Size of hedge fund market? (2)
What are typical examples for hedge fund strategies? (4)
Name the two fee components of hedge funds, how high? (2)
What are some difficulties of hedge fund return estimation? (2)
What can you say about Hedge funds’ performance relative to the market? (2)
Name some typical characteristics of Private equity. (5)
investments in privately held companies (do not trade on exchanges)
long horizon
high transaction costs
infrequent valuation
illiquid
What do private equity funds do? (2)
What are typical strategies? (3)
Pool capital and invest
horizon about 10 years
venture capital
buyout
infrastructure
How are Private Equity partnerships usually structured? (3)
investor (limited partner) provides capital for the PE manager (general partner), who acts as agent + compensation through fees
What are target date funds? (3)
asset allocation shifts over time (prespecified)
multi-asset class portfolio
rebalanced according to targets
Estimate of AUM of target date funds. (1)
3,5 trn USD -> 401k plans
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