Compare Salignac Gestion’s Opportunities Fund and PMStanley’s
(1) Calculate Parity Pricing for passively managed funds.
(2) Compare Salignac Gestion’s Opportunities Fund and PMStanley’s Growth Replication Index Fund from a cost perspective over a 20-year horizon, assuming a $10,000 initial investment, and annual returns of 10%. Which of the following answers is the correct one: a) investors would earn 63% more with Salignac; b) investors would earn 63% more with PM Stanley; c) the results would be the same.
(3) You work for a fund management company that plans to launch an actively managed fund with a so-called Quality Pricing strategy. What is the annual management fee of this fund if it plans to charge 0.75% above Parity Pricing?