After graduating from Johns Hopkins University, you were hired as an analyst by a pension fund that invests in different funds with different managers. You have been asked by the Chief Investment Officer (CIO) to evaluate the historical performance of an open-end core fund called Metta Fund that they are considering for investment. The fund was created in 2013. You have not been told exactly what your boss wants, but you know that he wants to know how their properties performed relative to the NCREIF Property Index (NPI) in terms of risk and return.
The CIO would like to know how well they did in allocating funds to different property sectors and how their allocations to those sectors have differed historically from the allocations in the benchmark NPI. He is also wondering if you can provide some insights as to how well their acquisition team was doing in acquiring and managing properties in each of the sectors.
The fund invests in the main property sectors of apartment, industrial, office, and retail. The marketing manager for the fund has provided you with an Excel spreadsheet which has the historical returns and supporting data for each property sector and the totals for all property sectors combined (national) for the fund.
You want to apply as much of what you learned in your course at JHU to provide the CIO with an analysis of the fund’s historical performance to impress the CIO and help determine if they should invest in the fund.
The data on the fund’s historical performance is on Canvas in a “Case” module called “Metta Fund.xlsx”. The data for the NPI is also included in the spreadsheet.
Prepare a writeup of your analysis and recommendation as to whether you would invest in the fund and why or why not. Include the results of any spreadsheet analysis as exhibits in your report. Do not submit a spreadsheet. (If the CIO needs to see any backup work, he can ask for it.) There is no required minimum or maximum number of pages for the report. The important thing is to present useful information that will help evaluate the fund as a potential investment based on the information available. In practice, the next step would be to bring the manager in to make a presentation and answer your questions. Your report could mention any questions you think you would ask in a follow up meeting based on what you are concluding from your analysis.
You can work in groups of three or less and pick your own group. Your report is due at the start of the last class period.