UNIT 21: ASSET MANAGEMENT

LEAD IN (P97)
 If you had a large amount of money to invest, would you invest it yourself, or to get a
professional investment consultant to do it?
I would invest it on my own because I would have knowledge about the field I would
invest and I would want to challenge myself
 Would you like to invest and manage other people’s money?
No, I would not
 What are the different basic strategies of asset management?
I think the different basic strategies of asset management are funding, maintenance and
operations

LISTENING 1 (P97)
1. Paula Foley does not mention derivatives, interest and liabilities.
2.
1 b
2 c
3 f
4 e
5 g
6 a
7 d

LISTENING 2 (P98)
1. She mentions 3 styles: growth investment, value investment and the choice of large or
small companies
2. Growth investment means looking for growth or capital accumulation: companies that
will get bigger.
Value investment is investing in big, stable companies in conservative industries with
earnings that might grow slowly but won’t fall.
Large companies are generally stable and more reliable than small ones.
Small companies often grow more quickly than large ones, but are more difficult to get
information about.
Active management means you buy and sell quite frequently, adapting your portfolio to
your objectives and changing market conditions.
Passive investment means you don’t buy and sell frequently; you buy and hold until
bonds mature or the financial situations fundamentally changes.
Index-linked portfolios try to follow or copy the movements of stock or bind market
indices or indexes.
Even fund portfolios need to be managed as their managers can change, or their quality
and objectives can change.
3. Asset values
Capital accumulation
Conservative industries
Growth investment
 Growth industries
Investment management
Stable earnings

READING (P99)
1. People are getting angry with active money managers because they are not performing
better than passive managers, who simply invest in indexed funds
2. Indexed funds developed because people argued that it was impossible to consistently
do better than the markets
3. The efficient-market hypothesis is that a company’s share price always accurately
reflects all available useful information. Further analysis will not reveal any additional
information, so there is no way of knowing more than the rest of the market participants
4. George Soros argues that markets often over-or-undervalue things, and that high and
low share prices can make things happen which in turn have an effect on price
5. Peter Lynch found good companies that the market was undervaluing
6. Because most active managers do worse than the market average, and unlike passive
managers they also charge fees.

LANGUAGE FOCUS (P100)

1D
2A
3F
4C
5B
6E

WRITING (P100)
The Wealth Management Director March 3,2020
MGS Bank
23 Ladbroke Avenue
London W11 3PX

Dear Sir
I am writing to complain about the person who is directly responsible to my account, Mr Cullen.
As an investment advisor, he seems to know little about asset management, and he disregards
of everything I say to him. I would have thought his role would be listen to my request.
I have a lifetime of experience in finance, and could easily transfer my account to another bank
or even to another investment fund. Furthermore, I could easily trade stocks and currency online
without paying commissions to a bank.
Your advisor, Mr Cullen, does not seem to be competent to select stock and currency options
and commodity futures despite I precisely tell him what I want to do with my money. Therefore, I
would like someone more senior to take over responsibility for my account.
I am looking forward to hearing from you
Yours faithfully
CHAU
Ta Thi Minh Chau