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  • CFA1 (2011) Alternative Investments

    Diunggah oleh

    Mạnh Tuấn Nguyễn
    127 tayangan5 halaman
    CFA LEVEL 1 STUDY SESSION 18 ALTERNATIVE INVESTMENTS Open-end vs. Closed-end NAV a. Investment company fees one-time fees ongoing annual fees Style Sector b. Strategies Index Global Stable Value definition mimic an index In-kind process Advantages price tax Diversification Exchange traded Better risk management Composition is known.

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    10. CFA1 (2011) Alternative Investments

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    CFA LEVEL 1 STUDY SESSION 18 ALTERNATIVE INVESTMENTS Open-end vs. Closed-end NAV a. Investment company fees one-time fees ongoing annual fees Style Sector b. Strategies Index Global Stable Value definition mimic an index In-kind process Advantages price tax Diversification Exchange traded Better risk management Composition is known.

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    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PDF, TXT atau baca online dari Scribd
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    127 tayangan5 halaman

    CFA1 (2011) Alternative Investments

    Diunggah oleh

    Mạnh Tuấn Nguyễn
    CFA LEVEL 1 STUDY SESSION 18 ALTERNATIVE INVESTMENTS Open-end vs. Closed-end NAV a. Investment company fees one-time fees ongoing annual fees Style Sector b. Strategies Index Global Stable Value definition mimic an index In-kind process Advantages price tax Diversification Exchange traded Better risk management Composition is known.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    dari 5

    CFA LEVEL 1 

     
    STUDY SESSION 18 
     
    ALTERNATIVE
    INVESTMENTS
    a
    Open- end vs.
    Closed- end

    NAV
    a. Managed investment
    companies (mutual funds) Investment
    company fees one-time fees
    ongoing annual fees

    Style

    Sector

    Index
    b. Strategies
    Global

    Stable Value

    Definition mimic an index

    In-kind
    price
    process Advantages
    tax

    Diversification
    74.1.
    Exchange traded
    Alternative
    Investments- Better risk management
    Part 1
    Composition is known
    Advantages
    Operating expense ratio

    No trading at a discount or premium

    Tax

    b,c. ETF Dividend

    Few indices

    Intraday trade
    Disadvantages
    Inefficient markets

    Larger investors

    Market risk

    Asset class/ sector risk

    Trading prices # NAV (depth and liquidity)


    Risks
    Tracking errors

    Derivative risks --> credit risk

    Currency and country risks


    Outright ownership
    a
    Leveraged equity position
    Types

    Mortgages

    Aggregation vehicles

    Characteristics

    d,e,f. Real Cost method


    Estate
    Investment
    Sales
    comparison
    method
    e,f. Approaches to the
    valuation of real estate
    Income
    method

    Discounted
    after tax cash
    flow model

    R&D
    Seed
    stage

    Initial marketing
    Start-up
    Formative financing
    stage
    74.2. Early
    stage
    Alternative Commercial production
    First stage
    Investments- financing
    Part 2 Stages Balanced
    stage Producing and selling products
    Second stage
    investing
    Expansion Not yet generating income
    stage
    financing
    Later Third stage Major expansion
    stage financing

    Mezzanine
    (bridge IPO
    g,h. Venture financing)
    capital
    investing
    Illiquidity

    Long term horizon

    Difficulty in valuation

    Limited data

    Characteristics Entrepreneurial /
    Management mismatches

    Fund Manager incentive mistakes

    Timing in the
    business cycle

    Requirement for extensive


    operations analysis

    h. NPV of a venture capital project


    Absolute return
    Limited partnership
    Forms a
    Limited liability corporation
    Offshore corporation

    Long/short funds
    Classifications Market-neutral funds
    Global macro funds
    Event- driven funds

    Leverage
    Illiquidity
    Potential for mispricing
    k. Counterparty credit risk
    i. Hedge Unique risks
    Settlement errors
    fund
    Short covering
    Margin calls

    Performance

    Self-selection bias
    Backfilling bias
    l. Survivorship bias
    Biases
    Smoothed pricing
    Option-like strategies
    Fee structures and gaming

    Effect of survivorship bias

    74.3. Fund to invest in


    Alternative hedge funds
    Investments- j. Fund of funds Benefits
    Part 3 investing Drawbacks

    m. How legal issues affect valuation

    m,n. Closely held n. Valuation Cost approach


    companies methods
    Comparable approach
    Income approach

    o1. Distressed securities investing

    o2. Compare VC with


    distressed securities
    investing

    Role as an investment vehicle


    Commodities
    Motivation for investing in
    Commodities derivatives
    p,q,r Commodities Commodity-linked securities
    Sources of return on
    Collateralized commodity
    futures position
    a. Relationship Contango a
    between spot
    prices and
    expected future Backwardation
    prices

    75. Investing Sources of return


    In
    Commodities b. Commodity Risk
    investment
    Effect on portfolio

    c. Commodity Active investment


    index strategy

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