Writing Assignment #2 Can be done individually or in groups of two or three students Must be submitted electronically The endowment of a medium-size public University is looking for qualified individuals to advise on portfolio allocation of its financial assets. The selection is done on competitive basis. The second part of the application is to write a research report that is at least 1,000 worlds in length on the subject of country investing. One can easily and cheaply invest in a passively managed index-based highly diversified fund consisting of stocks in all major ex-US countries such as Vanguard Total International Stock ETF (ticker: VXUS). Alternatively, one can choose an active investing strategy while overweighting stocks in some countries and underweighting in some others. Consider the following list of 10 country ETFs: iShares China Large-Cap (ticker: FXI), iShares MSCI Brazil Capped (ticker: EWZ), iShares MSCI Canada (ticker: EWC), iShares MSCI Germany (ticker: EWG), iShares MSCI India (ticker: INDA), iShares MSCI Japan (ticker: EWJ), iShares MSCI Mexico Capped (ticker: EWW), iShares MSCI South Korea Capped (ticker: EWY), iShares MSCI United Kingdom (ticker: EWU), VanEck Vectors Russia (ticker: RSX). The research note should provide a compelling analysis on justifying a selection of three countries to overweight and another three countries to underweight in the endowment’s international equity portfolio relative to a passively managed index-based highly diversified fund for an investment period of 12 months. The analysis should perform comparison of all 10 country ETFs to provide convincing rationale for your selections. Simply saying that former outperformers will keep outperforming and former underperformers will keep underperforming does not require much effort or even a college degree and will not get you a contract with our endowment.
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