Calculate the portfolio turnover ratio for each fund
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Considering the following trading and performance data for 3 different equality mutual funds from
JHancock asset management company for the year 2020:
Emerging market fund Principal Balance
Small Cap Fund
Income Fund
Average asset
(RM' Mill)
Security
310
655
520
40.1
570
575
Expenses ratio
0.35%
0.71%
1.65%
Pre-tax return, 3-year
10.2%
11.1%
15.2%
average
Tax-adjusted return,
9.5%
8.91%
13.4%
3-year average
i)Calculate the portfolio turnover ratio for each fund
ii) Which fund is most likely to be actively managed and which is most likely to be passively
managed?
iii) Calculate the tax cost ratio for each fund
iv) Determine which fund is the most and least tax efficient in their operations? Explain
v) Explain what expenses ratio is and which portfolio is considered expenses efficient.
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