The Australian Security Exchange (ASX) boasts one of the biggest Exchange Traded Funds (ETF) in the region.  Go to ASX website 1 and select 1 fund from each of the following category: A-REITS, Infrastructure Funds plus 2 funds from ETF & ETCs. Make sure these funds have been in the market for at least 2 years (December 2015 to December 2017). In addition, use the following criteria in your selection: a. A-REITS: Use the first alphabet in your first name to select the A-REITS with the same alphabet. i.e. if you name is Michelle, then you could select either MPS, MGR or MIX. If your name is Henry and there is no fund starting with “H” on the list, then go to the next alphabet in the sequence. i.e. you could choose either IEF, IOF or ILF. b. Infrastructure Fund: Any fund of your own choice. c. International/Strategy ETF: select one from either: International ETFs, International Sector ETFS, Cash & Currency ETFs, Fixed Income ETFs or Commodity ETF & ETCs.  Form a portfolio and apply the following allocation (a) A-REITS (b) Infrastructure (c) International/Strategy ETF (d) Cash 30% 20% 35% 15% Question (i) (15%, 500 words) 1. Identify the top 3 assets owned by the infrastructure fund selected from part (b) over the last 2 financial years. This information available from the annual reports of the fund or DatAnalysis 2. (i) Justify your decision as to why you have selected the fund from the list in (c) International ETF. What makes you choose this fund over the others? (ii) Identify three potential factors that might influence the performance of the fund over the next 12 months. Note:  There are thousand and one events happening in the market every day and financial markets are closely integrated. The factors you have selected must have a direct impact to the fund of your choice. Otherwise one could relate the typhoon in Brisbane is set off by the flap of Butterfly’s wings in Brazil. Question (ii) (10%, 400 words) Download their monthly closing prices for the last 2 years (from DatAnalysis or Yahoo! Finance). Calculate the performance (return) of your portfolio and compare it against the return of the benchmark ASX S&P200 index, that is: 1) Using ASX200 as your benchmark calculate excess return of your portfolio. 2) If ASX S&P200 if your portfolio’s benchmark. Calculate the absolute tracking error of your portfolio over the period. 3) Discuss your observation from a (ii) above. 

Question (iii) (15%, 400 words) Investigate over the last 2 years, how much your investment portfolio is influenced by  The return and volatility of the AUD/USD exchange rate?  What is the best allocation across these 3 funds if you wish to lower your overall return to total risk by 1%?