Goal diggers: Patriot Investment Strategies

You are beginning your new job with Patriot Investment Strategies, a mutual fund family managing approximately $100 billion in assets. Patriot has a variety of funds with various objectives. You, as a group, have been assigned to manage a portfolio benchmarking an existing index and to create at least one new fund based on your interesting and reasonable ideas. Since Patriot has also hired several young bright newly graduates like you, the management of the company decides to initiate a mutual fund competition.

It should include at least the:

1. name of the fund – The Goal Diggers

2. objective – We want to use a strategy for younger people, with high risk. Our objective is to have a higher risk in the posibility of having higher return

3. trading/investment strategy – Traditional investment strategies in the mutual fund industry mainly refer to asset allocation decisions (i.e., how much to invest in different asset classes).To some extent, investment strategies also include decisions regarding passive vs. active and top-down vs. bottom-up asset allocation strategies.But note that his project is not about replicating or implementing what real mutual funds do in the real world.Rather, you are encouraged to exercise your imagination in this project.Thus, in addition to traditional investment strategies, you could also implement some strategies you might have in mind.For example, your strategy could be market timing, following certain newsletters, choosing stocks according to analyst recommendations … and so on.The only requirement is to make sure your strategies are consistent with your mutual fund objective(s).

4. style – Mutual fund companies use styles to summarize the main stock compositions of the funds.Two major categories of styles are (1) aggressive growth, growth, blend (growth and value), and value, and (2) small, medium, and large market capitalizations.To a broader term, there are other styles such as global, emerging markets, regional markets, sectors, corporate bonds, government bonds (long-term, intermediate, short-term), and balanced (stocks and bonds).You could also combine several different styles or even have your own styles.Obviously, your styles should be consistent with your investment strategies.

5. fund formation (investment process) – This refers to the techniques that you will use to form your fund.For example, will you use short selling, margin trading, or limit orders?Again, the techniques you use are to assist you to meet your fund styles and ultimately, the objective(s) of your fund.

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