Finance/Accounting Please Help Endowment Analysis There is no minimum or maximum

Question

Finance/Accounting Please Help

Endowment Analysis

There is no minimum or maximum length answer required but be sure to provide all of the requested elements for each of the four parts within the allotted time Given your expertise in investment management, GIT's student newspaper, the Polytechnic ("Poly"), has asked you to analyze and make recommendations regarding the university's endowment assets. Below is the actual statement of investments from the 2017 GITfinancial statements. A definition of each asset category is included at the end of this examination. 5.Investments The Institute's investments are overseen by the Investment Committee of the Board of Trustees The fair value and cost of investments at June 30 is as follows 2017 2016 Fair Value Cost Fair Value Cost Cash and cash equivalents Fixed income Domestic equity Global equity Foreign equity Real assets Marketable alternatives S 22,598 $ 22,598$ 36,338 S 69,695 126,327 53,211 126,516 4,287 68,742 124,404 38,028 99,206 4,115 82,368 80,253 64,429 70,735 3,186 36,338 79,445 75,983 53,350 61,625 2,873 Fixed income Multi strategy Equity 33,098 9,634 16,677 25,764 8.368 14,737 28,363 28,479 13,393 18,864 16,392 15,179 Private investments Fixed income Real assets Equity 6,518 57,606 93,804 619,971 10,179 104,427 64,921 585,489 7,623 65,438 99.346 579,951 10,179 110,382 69,730 550,340 Subtotal

Explanation / Answer

Robo-advisors are online investment management sites like Wealthfront and Betterment that manages investments through unique algorithms

Expenses :

Investment advisors traditionally charge a 1.31% average fee, while the robotic alternative charges 0.15%-0.35% management fee. (Both companies also charge fees for the ETFs — about 0.15% per year.)

Transparancy:

Both Wealthfront and Betterment devote considerable real estate to explaining their fairly straightforward and transparent pricing structures on their websites. Wealthfront requires a minimum investment of $5,000; Betterment does not have a minimum.

Investment advisors, on the other hand, sometimes require a minimum portfolio value, and they can be unclear about how exactly they're charging you.

Risk and Return

Risk and Return go hand by hand hence it is very important to maintain balance between two.

Money invested conservatively will yield higher returns than money not invested at all so if it comes down to using a robo-advisor or not investing at all, robo is usually the wiser choice.

Investment advisors, on the other hand, certainly aren't guaranteed to outperform their robotic friends, but they have the perspective and context to adjust investments to our needs. An advisor's perspective is particularly useful if we have a large portfolio or a complicated financial situation. If we're going to spend high amount, we shouldn't be doing it with a robo-advisor.

Thus, one is not the exclusion of the other. First of all, humans and robots usually don't directly compete for the same clients (there's that minimum investment requirement, again). And as our investment needs change, so might our strategy as well as the help we enlist.

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