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 30 months (August 2016 to August 2019). In addition, use the following
criteria in your selection:
a. A-REITS: Use the first alphabet in your last name to select the A-REITS with the same
alphabet. i.e. if you name is Mitchell, then you could select either MPS, MGR or MIX. If your
name is Horne 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
20% 15% 55% 10%
Question (i) (15%, 500 words)
1. Identify the two largest infrastructure 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 If the fund only owns one physical asset, such as Sydney Airport, list the
two divisions which contribute the most revenue.
2. (i) Provide some justifications to your selection the fund from the list in (c).
(ii) Identify three potential factors that might influence the performance of this fund over the
next 12 months.
• 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 37 months (from DatAnalysis or Yahoo!
Using ASX S&P200 as the benchmark of your portfolio’s return, measure the performance of the
return of your portfolio:
1) Calculate excess return of your portfolio.
2) Calculate the absolute tracking error of your portfolio over the period.
3) Discuss your observation from (1) and (2) above.