Market中文3在全球市場(chǎng)選擇投資工具(不講)ppt課件

1、Lecture Presentation Software to accompanyInvestment Analysis and Portfolio ManagementSeventh Editionby Frank K. Reilly & Keith C. BrownChapter 3.Chapter 3 - Selecting Investments in a Global MarketQuestions to be answered:Why should investors have a global perspective regarding their investments?.C

2、hapter 3 - Selecting Investments in a Global MarketQuestions to be answered:What has happened to the relative size of U.S. and foreign stock and bond markets?.Chapter 3 - Selecting Investments in a Global MarketQuestions to be answered:What are the differences in the rates of return on U.S. and fore

3、ign securities markets?.Chapter 3 - Selecting Investments in a Global MarketQuestions to be answered:How can changes in currency exchange rates affect the returns that U.S. investors experience on foreign securities?.Chapter 3 - Selecting Investments in a Global MarketQuestions to be answered:Is the

4、re an additional advantage of diversifying in international markets beyond the benefits of domestic diversification?.Chapter 3 - Selecting Investments in a Global MarketQuestions to be answered:What alternative securities are available? What are their cash flow and risk properties?.Chapter 3 - Selec

5、ting Investments in a Global MarketQuestions to be answered:What is the historical return and risk characteristics of the major investment instruments?.Chapter 3 - Selecting Investments in a Global MarketQuestions to be answered:What is the relationship among returns for foreign and domestic investm

6、ent instruments? What is the implication of these relationships for portfolio diversification?.Reasons for the expansion of investment opportunitiesGrowth and development of foreign financial markets2.Advances in telecommunications technology3. Mergers of firms and security exchanges.The Case for Co

7、nstructing Global Investment PortfoliosIgnoring foreign markets can substantially reduce the investment choices for U.S. investorsThe rates of return on non-U.S. securities often have substantially exceeded those for U.S.-only securitiesThe low correlation between U.S. stock markets and many foreign

8、 markets can help to substantially reduce portfolio risk.Relative Size of U.S. Financial MarketsThe share of the U.S. in world capital markets has dropped from about 65 percent of the total in 1969 to about 48 percent in 2000The growing importance of foreign securities in world capital markets is li

9、kely to continue.Relative Size ofU.S. Financial MarketsOverall value of the total investable capital market has increased from $2.3 Trillion in 1969 to $63.8 Trillion in 2000 and the U.S. portion has declined to less than half.This trend is likely to continue.The Case for Global InvestmentsRates of

10、return available on non-U.S. securities often exceed U.S. Securities due to higher growth rates in foreign countries, especially the emerging markets.The Case for Global InvestmentsDiversification with foreign securities canhelp reduce portfolio risk because foreignmarkets have low correlation with

11、U.S. capitalmarkets.Global Bond Portfolio RiskMacroeconomic differences cause the correlation of bond returns between the United States and foreign countries to differThe correlation of returns between a single pair of countries changes over time because the factors influencing the correlation chang

12、e over time .Risk of Combined Country InvestmentsDiversified portfolios reduce variability of returns over timeCorrelation coefficients measure diversification contributionCompare correlation of return among U.S. bonds and stocks with returns on foreign bonds and stocks.Global Bond Portfolio RiskLow

13、 positive correlation Opportunities for U.S. investors to reduce riskCorrelation changes over timeAdding non-correlated foreign bonds to a portfolio of U.S. bonds increases the rate of return and reduces the risk of the portfolio.Global Equity Portfolio RiskLow positive correlationOpportunities to r

14、educe risk of stock portfolio by including foreign stocks.Summary on Global InvestingRelatively high rates of return combined with low correlation coefficients indicate that adding foreign stocks and bonds to a U.S. portfolio will reduce risk and may increase its average return.Global Investment Cho

15、icesFixed-income investmentsbonds and preferred stocksEquity investmentsSpecial equity instrumentswarrants and optionsFutures contractsInvestment companiesReal assets.Fixed-Income InvestmentsContractual payment scheduleRecourse varies by instrumentBondsinvestors are lendersexpect interest payment an

16、d return of principalPreferred stocksdividends require board of directors approval.Savings AccountsFixed earningsConvenientLiquidLow riskLow ratesCertificates of Deposit (CDs)- instruments that require minimum deposits for specified terms, and pay higher rates of interest than savings accounts. Pena

17、lty imposed for early withdrawal.Money Market CertificatesCompete against Treasury bills (T-bills)Minimum $10,000Minimum maturity of six monthsRedeemable only at bank of issuePenalty if withdrawn before maturity.Capital Market InstrumentsFixed income obligations that trade in secondary marketU.S. Tr

18、easury securitiesU.S. Government agency securitiesMunicipal bondsCorporate bonds.U.S. Treasury SecuritiesBills, notes, or bonds - depending on maturityBills mature in less than 1 yearNotes mature in 1 - 10 yearsBonds mature in over 10 yearsHighly liquidBacked by the full faith and credit of the U.S.

19、 Government.U.S. Government Agency SecuritiesSold by government agenciesFederal National Mortgage Association (FNMA or Fannie Mae)Federal Home Loan Bank (FHLB)Government National Mortgage Association (GNMA or Ginnie Mae)Federal Housing Administration (FHA)Not direct obligations of the TreasuryStill

20、considered default-free and fairly liquid.Municipal BondsIssued by state and local governments usually to finance infrastructural projects.Exempt from taxation by the federal government and by the state that issued the bond, provided the investor is a resident of that state Two types:General obligat

21、ion bonds (GOs)Revenue bonds.Corporate BondsIssued by a corporationFixed incomeCredit quality measured by ratingsMaturityFeaturesIndentureCall provisionSinking fund.Corporate BondsSenior secured bondsmost senior bonds in capital structure and have the lowest risk of defaultMortgage bondssecured by l

22、iens on specific assetsCollateral trust bondssecured by financial assetsEquipment trust certificatessecured by transportation equipment.Corporate BondsDebenturesUnsecured promises to pay interest and principalIn case of default, debenture owner can force bankruptcy and claim any unpledged assets to

23、pay off the bondsSubordinated bondsUnsecured like debentures, but holders of these bonds may claim assets after senior secured and debenture holders claims have been satisfied.Corporate BondsIncome bondsInterest payment contingent upon earning sufficient income Convertible bondsOffer the upside pote

24、ntial of common stock and the downside protection of a bondUsually have lower interest rates.Corporate BondsWarrantsAllows bondholder to purchase the firms common stock at a fixed price for a given time periodInterest rates usually lower on bonds with warrants attachedZero coupon bondOffered at a de

25、ep discount from the face valueNo interest during the life of the bond, only the principal payment at maturity.Preferred StockHybrid securityFixed dividendsDividend obligations are not legally binding, but must be voted on by the board of directors to be paidMost preferred stock is cumulativeCredit

26、implications of missing dividendsCorporations may exclude 70% of dividend income from taxable income .International Bond InvestingInvestors should be aware that there is a very substantial fixed income market outside the United States that offers additional opportunity for diversification.Internatio

27、nal Bond InvestingBond identification characteristicsCountry of originLocation of primary trading marketHome country of the major buyersCurrency of the security denominationEurobondAn international bond denominated in a currency not native to the country where it is issued.International Bond Investi

28、ngYankee bondsSold in the United States and denominated is U.S. dollars, but issued by foreign corporations or governmentsEliminates exchange risk to U.S. investorsInternational domestic bondsSold by issuer within its own country in that countrys currency.Equity InvestmentsReturns are not contractua

29、l and may be better or worse than on a bond.Equity InvestmentsCommon StockRepresents ownership of a firmInvestors return tied to performance of the company and may result in loss or gain.Classification of Common Stock Categorized By General Business LineIndustrial: manufacturers of automobiles, mach

30、inery, chemicals, beveragesUtilities: electrical power companies, gas suppliers, water industryTransportation: airlines, truck lines, railroadsFinancial: banks, savings and loans, credit unions.Acquiring Foreign Equities1. Purchase of American Depository Receipts (ADRs)2. Purchase of American shares

31、3. Direct purchase of foreign shares listed on a U.S. or foreign stock exchange4. Purchase of international mutual funds.American Depository Receipts (ADRs)Easiest way to directly acquire foreign sharesCertificates of ownership issued by a U.S. bank that represents indirect ownership of a certain nu

32、mber of shares of a specific foreign firm on deposit in a U.S. bank in the firms home countryBuy and sell in U.S. dollarsDividends in U.S. dollarsMay represent multiple sharesListed on U.S. exchangesVery popular.Purchase or Sale of American sharesIssued in the United States by transfer agent on beha

33、lf of a foreign firmHigher expensesLimited availability.Direct Purchase of Foreign SharesDirect investment in foreign equity markets- difficult and complicated due to administrative, information, taxation, and market efficiency problems Purchase foreign stocks listed on a U.S. exchange limited choic

34、e.Purchase International Mutual FundsGlobal funds - invest in both U.S. and foreign stocksInternational funds - invest mostly outside the U.S.Funds can specializeDiversification across many countriesConcentrate in a segment of the worldConcentrate in a specific countryConcentrate in types of markets

35、.Special Equity InstrumentsEquity-derivative securities have a claim on common stock of a firmOptions are rights to buy or sell at a stated price for a period of timeWarrants are options to buy from the companyPuts are options to sell to an investorCalls are options to buy from a stockholder.Futures

36、 ContractsExchange of a particular asset at a specified delivery date for a stated price paid at the time of deliveryDeposit (10% margin) is made by buyer at contract to protect the sellerCommodities trading is largely in futures contractsCurrent price depends on expectations.Financial FuturesRecent

37、 development of contracts on financial instruments such as T-bills, Treasury bonds, and EurobondsTraded mostly on Chicago Mercantile Exchange (CME) and Chicago Board of Trade (CBOT)Allow investors and portfolio managers to protect against volatile interest ratesCurrency futures allow protection agai

38、nst changes in exchange rates.Investment CompaniesRather than buy individual securities directly from the issuer they can be acquired indirectly through shares in an investment companyInvestment companies sell shares in itself and uses proceeds to buy securitiesInvestors own part of the portfolio of

39、 investments.Investment CompaniesMoney market fundsAcquire high-quality, short-term investmentsYields are higher than normal bank CDsTypical minimum investment is $1,000No sales commission chargesWithdrawal is by check with no penaltyInvestments usually are not insured.Investment CompaniesBond funds

40、Invest in long-term government, corporate, or municipal bondsBond funds vary in bond quality selected for investmentExpected returns vary with risk of bonds.Investment CompaniesCommon stock fundsMany different funds with varying stated investment objectivesAggressive growth, income, precious metals,

41、 international stocksOffer diversification to smaller investorsSector funds concentrate in an industryInternational funds invest outside the United StatesGlobal funds invest in the U.S. and other countries.Investment CompaniesBalanced fundsInvest in a combination of stocks and bonds depending on the

42、ir stated objectives.Real Estate Investment Trusts (REITs)Investment fund that invests in a variety of real estate propertiesConstruction and development trusts provide builders with construction financingMortgage trusts provide long-term financing for propertiesEquity trusts own various income-prod

43、ucing properties.Direct Real Estate InvestmentPurchase of a homeAverage cost of a single-family house exceeds $100,000Financing by mortgage requires down paymentHomeowner hopes to sell the house for cost plus a gain.Direct Real Estate InvestmentPurchase of raw landIntention of selling in future for

44、a profitOwnership provides a negative cash flow due to mortgage payments, taxes, and property maintenanceRisk from selling for an uncertain price and low liquidity.Direct Real Estate InvestmentLand DevelopmentBuy raw landDivide into individual lotsBuild houses or a shopping mall on itRequires capita

45、l, time, and expertiseReturns from successful development can be significant.Low-Liquidity InvestmentsSome investments dont trade on securities marketsLack of liquidity keeps many investors awayAuction sales create wide fluctuations in pricesWithout markets, dealers incur high transaction costs.Anti

46、quesDealers buy at estate sales, refurbish, and sell at a profitSerious collectors may enjoy good returnsIndividuals buying a few pieces to decorate a home may have difficulty overcoming transaction costs to ever enjoy a profit.ArtInvestment requires substantial knowledge of art and the art worldAcq

47、uisition of work from a well-known artist requires large capital commitments and patienceHigh transaction costsUncertainty and illiquidity.Coins and StampsEnjoyed by many as hobby and as an investmentMarket is more fragmented than stock market, but more liquid than art and antiques marketsPrice list

48、s are published weekly and monthlyGrading specifications aid salesWide spread between bid and ask prices.DiamondsCan be illiquidGrading determines value, but is subjectiveInvestment-grade gems require substantial investmentsNo positive cash flow until soldCosts of insurance, storage, and appraisal.R

49、eturns of Stocks, Bonds, and T-BillsIbbotson and Sinquefield (I&S) examined nominal and real rates of return for seven major classes of assets in the United States1. Large-company common stocks2. Small-capitalization common stocks3. Long-term U.S. government bonds4. Long-term corporate bonds5. Intermediate-term U.S. Treasury bills6. U.S. Treasury bills7. Consumer goods (inflation).Derived Series: Historical Highlights (1926 - 2001)I & S computed geometric and arithmetic mean rates of returnThey derived four return premiums1. Risk p