Securities Weight (%)

Unit Trust 32
Money Market Instrument 15
Bonds/ Sukuk 10
Stocks 43
Total 100

(a) Explain the objective(s) of your investment plan and assign a name to you fund.

An investment is made because it serves some objective for an investor. Depending on the
life stage and risk appetite of an investor, my main objectives of my investment plan is
growth as I am an aggressive and risk-taking investor. I assign my fund as named ‘Bullet
fund’ and this fund is suitable for investors seeking a growth-oriented portfolio and willing to
assume a potentially high level of risk for potentially greater returns. When it comes to
reaching your long-term goals, appropriate risk is beneficial and serves a valuable purpose.
The more risk you’re willing to take, the greater potential returns you may receive. This fund
is suitable for young or rich people but it is not suitable for old people or retired people as
this fund does not bring stable income for them. This fund bring higher return for the investor
so it can attract young and rich people as they are aiming for higher return and they just don’t
care about the risk. Young people can start over again and earn back the money if they lost
the money on investment because they are still young and able to work. Unlike old and
retired people, they have no time or energy to earn it back if they taking the high risk and lost
all the money. This fund is focus on helping the young people to make more money as they
need it to improve their standard of living and have a better life for themselves and also for
their family. Smart Investment Bhd. can make profit in short time and help investor achieve
their goal and can increase the profit of company with a huge amount of money and of course
the risk will be higher. As I mention before, this investment plan have a higher risk so most
of the investor with financial background will invest with this plan so they will know what
are we doing and can prevent losses. I can see that ‘Bullet fund’ will gain our company,
Smart investment Bhd. a very good profit in short period of time because many young and
rich people will attract to this plan and invest on it.

Page | 27
(b) Allocate weightage to each of the security and justify your answer.

As the Chief Investment Officer for Smart Investment Bhd., I will allocated 43% for stocks,
10% for bonds, 15% for money market instrument and 32% for the unit trust securities. The
way I divvy the percentage for these securities is because my target is young and rich people,
and they are willing to accept and take a higher risk in order to receive a greater potential and
higher return. Thus this type of investor is consider as a risk-taking investor, which is mean
by they want higher return even though the risk is extremely high.

I allocated the most percentage on stocks which is 43% is because stocks can make most
profit compare to other securities but the risk is also higher than other securities. I am sure
that the investors are willing to take the risk to get back tons of profit with the concept of
high risk, high return. For example, investor can buy the stocks of AirAsia Bhd. and the share
price increased, the shareholders get a total return of 40.53% from the company. Stocks
market has the most growth potential, some young people save their money and try to avoid
the stocks market but they don’t know that stocks market has the high growth potential and
they will miss the chance. By investing in stocks, investors have to take the market risk,
purchasing power risk and business risk. The average return of stocks in Malaysia is 26.91%.
I will get a total of 11.57% of expected return by investing 43% of my weightage in stocks.

I have allocated 32% on unit trusts security. Unit trust is managed by professional fund
manager and this is good for those who don’t have any financial background because the
decision is made by the investment professional with lots of experienced. Unit trust is
portfolio diversification the professional use our money invest in different type of securities
and will lower down the risk and lower down the losses. Trustee will govern the professional
so we do not have to worry about the investment, if one investment is affected by certain risk
the others will not be affect except for market risk. As an aggressive investors, we aim for
long-term growth, therefore we will more focus on capital gain and NAV. Malaysian unit
trusts provide an important investment tool and make a great contribution to the Malaysian
economy so I allocated 32% for unit trust and expect to get a return of 4.57%.

Page | 28
10 % of the weightage are allocated for bonds as a cover for the losses from stocks and unit
trust. Bond give investor interest payment and capital gain as their return over specified
period of time. I allocated only 10% on bonds is because it only bring low return. The last
portion is 15% which is allocated for money market. Money market instrument bring
investors the lowest return but the risk is also low. Money market instruments is easy to
convert it to money without losing much of it value. The maturity date for money market is
less than a year, investors can easily collect back principal from bank and don’t need to be
afraid of them running away from you.

The expected return among all of the investment of securities is 17.19% which is quite high
for the investors. Young and rich people must accept the higher risk to receive a higher
return.

(971 words)

Page | 29