IM Questions Flashcards
What service would you use for Non-Equity exposure?
Alternative Allocation, Alternative Income, UK Fixed Income
Maximum sector allowance within Global Large Cap
30%
Minimum market cap for not covered/monitored investment -
$20 Billion or £10bn FTSE 100
What is the maximum exposure to an individual equity?
10%
What is the maximum equity allocation in a Cautious AIA ?
40%
Which AIA correlates to a medium NATR?
Balanced or Steady Growth
What is the minimum Fixed Income requirement for Cautious ?
50% of total portfolio has to be in Fixed income and that equates to £35,000 (min £70k for MIS)
Name the core stocks?
Unitedhealth, ASML, Alphabet, Linde, Danaher, Orsted, Nestle, Visa, Thermo Fisher, Costco, Amazon & Microsoft [AAACUNMOLDTV]
3 growth buckets in which our model portfolio equities fall into?
Fast Growth, Cyclical & Defensive
Economies of scale?
When a firm gets larger - costs decrease
FX Charge ?
0.5% for trades under £30,000 and 0.35% thereafter
Pricing power
The ability to raise prices without affecting demand (monoply in an industry) ASML, LINDE.
Operational Gearing
The effect that fixed costs can have on the relationship that exists between sales and your operating profits - good example - https://moneyterms.co.uk/operational_gearing/
What are the segregated services for MIS? N.B segregated services are now called INVESTMENT STRATEGIES All
Global Emerging Markets, Global Smaller Companies, Global Technology Innovation, Large Cap Global Equity, Global Mid Cap Equity, PMS, Sustainable PMS, Special Situations
Name 3 cyclical sectors?
Financials, Industrials, Materials
Name 3 defensive sectors?
Utilties, Consumer staples, Health care
Name 3 fast growth sectors?
Tech, Consumer discretionary, Communication services
Last time to trade?
LSE opens 8am to 4.30pm
What is systematic risk?
Is the risk inherent to the entire market, attributable to a mix of factors including economic, socio-political, and market-related events. N.B cannot be eliminated by diversification. e.g - inflation, interest rates, war, recessions, currency changes etc
What is un-systemic risk?
Is the risk that a company or industry level risk could trigger a huge collapse. N.B can be dwindled through diversification.
What form has to be completed by all US persons
W9
What is modified duration?
Modified duration is a formula used to express the change in value of a bond from a 1% change in interest rates, illustrating that bond prices and interest rates move in opposite directions- higher interest rates lower bond prices, and lower interest rates raise bond prices.
If interest rates rise, bond prices…
Fall
If inflation rises, fixed coupon bond yield will
Rise
Objective of Fixed Income Service
To provide a reasonable and predictable level of income with less risk of investing in direct equities
What is a callable bond
Is when the issuer can redeem the bond before maturity (it is just an option, not obligation)
Min investment for FI
£30K
What happens to corp bond yields if Gilt yield rise
Corp bond yield also rises
What is perpetual bond
No maturity date
What is the income yield
The annual income on a bond as a % of its price
Name three credit ratings
Fitch, Moody’s, S&P
Characteristics that make a bond more susceptible to movements in interest rates
Long maturity, low coupon
purpose of W8 Ben
purpose of W9 Ben
W8 Ben - UK Residents to claim back tax if they own US stocks
W9 Ben - US citizens, allows you to reclaim 15% tax
A client moves residency to the US from the UK. What documents do we need?
Change of circumstance form, W9-BEN, Passport, address confirmation
Do corp bonds have voting rights
No
Bond holder or shareholder rank first in liquidation
Bond holders
What is a derivative
Asset which derives value form price of another asset such as gold, or index
How many sectors are there
11
How many core stocks
12
