Examining the manager's comments and the comments in the annual report, it appears as though fund management is generally reactive to trends rather than proactive. The discussion centers on what happen in the economy and to the fund, rather than any discussion on what the fund is going to do to exploit opportunities.
The fund's heavy concentration in the French market has left it particularly vulnerable to shocks emanating from that market. For example, in the first quarter of 2007, the inflation index in France moved sharply lower, which was not anticipated by the fund managers. In the second quarter, the risk of a hike in VAT increased the volatility of French securities, in particular the short-range maturities. The result of this high level of exposure to the French market was that the fund suffered over this period as a result of these shocks. The lack of diversification in the fund should be viewed as a concern in light of management's inability to generate profit from their strong position in the French fixed-income market.
It should be remembered that this is a new fund. It bears more than the Barclays' Index on account of its exposure to Italy and Greece, and is therefore riskier. The indexed performance...
The problem is that the market has been very poor since the inception of the fund. The fund, however, has probably declined more in that time period than it should have based on its risk level. This can be attributed to its high level of exposure to a volatile French market. There have been, however, few examples of superior performance.
The Pictet Funds Euro Inflation-Linked Bonds Fund has, as yet, failed to achieve its stated objectives. However, it is early in the fund's life, and the Index has also performed poorly over this short time period. Therefore, it is unreasonable to render a final verdict on the performance, and by extension the strategy and composition, of this fund.
Works Cited
PF (Lux) EUR Inflation Linked Bonds Fact Sheet, October 2008.
Pictet Funds (Lux) 2007 Annual Report, p.31, 199-200.
PF (Lux) EUR Inflation Linked Bonds Manager's Comment, October 2008
PF (Lux) EUR Inflation Linked Bonds Fact Sheet, October 2008.
PF (Lux) EUR Inflation Linked Bonds Manager's Comment, October 2008
Pictet Funds (Lux) 2007 Annual Report, p.31,…
2.5. Limitations of the study At the level of the limitations, these refer to the usage of secondary information, as opposed to the collection of primary data through the direct analysis of the Chinese market. This limitation is nevertheless addressed through the integration of multiple sources of valid and verifiable information, leading as such to the creation of solid, relevant and reliable findings. The second limitation is one common to all research
" 2 Apr. 2004. Federal Reserve Bank of San Francisco. Retrieved November 21, 2006 from Web site: http://www.frbsf.org/publications/economics/letter/2004/el2004-08.html Ranson, David. "Inflation." The Concise Encyclopedia of Economics." Retrieved November 21, 2006 from Web site: http://www.econlib.org/library/Enc/Inflation.html Inflation." Wikipedia. Retrieved November 21, 2006 from Web site: http://en.wikipedia.org/wiki/Inflation#The_role_of_inflation_in_the_economy Svensson, Lars E.O., "Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others." Dec. 2003. Retrieved November 21, 2006 from Web site: http://www.princeton.edu/svensson/papers/jep2.pdf Inflation." Encyclopedia of American History.
Conclusions There is no generally accepted theory of inflation. The causes that generate it are numerous and include economic, psychological, social, political, internal, and external factors. Inflation is based on numerous partial causes, which correlated determine the inflationist process. Inflation is generally considered an unbalance between money and goods, consisting in the existence of excessive money supply in relation with the volume of goods subjected to transactions, resulting an excess of unsatisfied total demand. Given the processes that determine
"..most importantly, we find that inflation has a dramatic negative impact on the profitability of banks." (2006) Boyd and Champ additionally state that: "The world has seen a dramatic decline in inflation rates in recent decades, but concerns about inflation may still be warranted, especially in some countries. Evidence is mounting that inflation is harmful to economic activity even at fairly modest rates of inflation because of the way it
The clarification of the timeframe before the inflation will return to the level that has been targeted following the shock of employment rate shifts is "the horizon of the policy rule." (McDonald, nd; 73) Inflation rates grew for two years while interest rates were rising and yet unemployment was lowering during this time. In the United States, it can be noted as well that while unemployment rates grew inflation
The Federal Reserve should be able to control and measure the demand and supply on the market and correlate the two indexes. Also, and probably most importantly, the Reserve should constantly supervise and regulate the monetary system, assuring correspondence between the amount of money in coins and bills on the market and their coverage in gold and in the total quantity of goods and services produced. The economic practice has concluded