Project – Fund Comparison Harvard Case Solution & Analysis

Project – Fund Comparison Case Solution 

Technology Select Sector SPDR ETF (XLK)

FUND OBJECTIVES

The objective of the SPDR is to provide investors with easy and affordable way to invest in the technology sector of the equity market. The funds aim to provide investors with option regarding asset allocations as per their needs and goals. The fund claims to follow the price and yield performance of a public listed company whose core business is related to technology.

STYLE OF INVESTMENT

The fund follows a passive strategy and is close ended. To fulfill its objective of tracking the performance of an index, the management applies replication strategy in which the fund tries to maximize its scope by investing in all companies that are included in that index while maintaining the same proportion in the portfolio as in the real world index.
The fund usually invests all of its assets in common stocks, but at least 95% is always invested of the public listed companies trading in the technological sector of the market. As the fund invests in one particular sector of the market, therefore it can be said that the fund is not diversified.

HOLDINGS

The index followed by the fund typically includes companies performing business in following fields; hardware, software, telecommunication services, internet services and etc. The major holding for the fund currently is common stocks of following companies; Apple Inc., Microsoft Inc. and Facebook Inc.

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T. Rowe Price Global Technology

FUND OBJECTIVES

The main objective of the fund is to add value to its investors’ wealth. The fund targets those investors who want long term return and are accepting higher risks. As the fund only trades in the technological sector of the economy therefore, its investors are faced with increased risks. The fund has expressed its objective to earn long term value by investing in common stocks of companies that are expected to grow rapidly due to the advancements in technological sector. The fund has accepted its risk and is less diversified and trades only in technological companies globally......................

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