Case 1:
Bond Funds presentation and analysis

1. Introduction (0,5 p)
In this project, we have analyzed 184 bond funds classified according to the following variables * Type : intermediate government or short-term corporate * Expense ratio: ratio of expenses to net sales * Fees: Sales charges * Return 2009: twelve months return in 2009 * Three-years return: annualized return 2007-2009 * Five-years return: annualized return 2005-2009 * Risk: risk of loss factor of the mutual fund (bellow average, average, above average)
In order to do the analysis, we have used several representations of the data and computed different measures that give indication of the variation as well as the central tendency. 2. Analysis (3,5 p) 3.1 Analysis by Fees
Table 1: Funds measures per fees | Expense Ratio | Return 2009 | 3-Year Return | 5-Year Return | | Fees No | Fees Yes | Total | Fees No | Fees Yes | Total | Fees No | Fees Yes | Total | Fees No | Fees Yes | Total | Mean | 0,63 | 0,92 | 0,71 | 7,27 | 6,92 | 7,16 | 4,61 | 4,80 | 4,66 | 3,99 | 3,99 | 3,99 | Median | 0,60 | 0,95 | 0,70 | 6,75 | 5,55 | 6,40 | 5,10 | 5,30 | 5,10 | 4,25 | 4,30 | 4,30 | 1st Quartile | 0,50 | 0,85 | 0,53 | 3,60 | 2,93 | 3,48 | 4,13 | 3,70 | 4,05 | 3,63 | 3,40 | 3,60 | 3rd Quartile | 0,73 | 1,00 | 0,90 | 11,10 | 8,98 | 10,73 | 6,10 | 5,98 | 6,10 | 4,90 | 4,68 | 4,90 | Range | 1,82 | 0,73 | 1,82 | 40,80 | 34,50 | 40,80 | 22,70 | 13,90 | 23,20 | 13,70 | 8,30 | 14,10 | Interquartile range | 0,23 | 0,15 | 0,38 | 7,50 | 6,05 | 7,25 | 1,98 | 2,28 | 2,05 | 1,28 | 1,28 | 1,30 | Variance | 0,06 | 0,02 | 0,07 | 32,96 | 47,78 | 37,10 | 6,86 | 5,15 | 6,33 | 2,45 | 1,64 | 2,21 | Standard deviation | 0,24 | 0,14 | 0,26 | 5,74 | 6,91 | 6,09 | 2,62 | 2,27 | 2,52 | 1,57 | 1,28 | 1,49 | Coef of Variation | 39% | 15% | 36% | 79% | 100% | 85% | 57% | 47% | 54% | 39% | 32% | 37% |

3.2.1 Fees for Expense Ratio

Figure 1: Expense ratio % distribution * The expense ratio represents the ratio of expenses to net sales. Therefore, the lowest is the expense ratio, the better is the performance of the fund (because using less expenses per sales) * According to Figure 1, we can see that the funds without fees tend to have the lowest expense ratio and the funds with fees tend to have the highest expense ratio * According to Table 1, funds without fees have more variability than funds with fees (Range, Variance, SD, CV). * In order to take a decision on which funds to invest in, a closer look has to be made on the return of investments

3.2.2 Fees for 2009 Return

Figure 2: 2009 return % distribution * According to Table 1 and Figure 2, on average funds without fees had a higher return in 2009 than funds with fees (7.27 vs. 6.92) * According to Table 1, funds without fees have less variability than funds with fees (Range, Variance, SD, CV). This means that less risk is associated with funds without fees

3.2.3 Fees for 3 years return

Figure 3: 3-YR return % distribution * According to Table 1 and Figure 3Figure 2, on average funds without fees had a lower return from 2007 to 2009 than funds with fees (4.61 vs. 4.80) * According to Table 1, funds without fees have more variability than funds with fees (Range, Variance, SD, CV). This means that between 2007 and 2009 more risk is associated with funds without fees 3.2.4 Fees for 5 years return

Figure 4: 5-YR return % distribution

* According to Table 1 and Figure 4Figure 3Figure 2, on average funds without and with fees had the same return from 2005 to 2009 * According to Table 1, funds without fees have more variability than funds with fees (Range, Variance, SD, CV). This means that between 2005 and 2009 more risk is associated with funds without fees

3. Analysis by Intermediate government and short-term corporate | Expense Ratio(%) | Return 2009 | 3Y Return | 5Y Return | | IG | STC | IG | STC | IG | STC | IG | STC | Mean | 75.78 | 67.05 | 4.45 | 9.60 | 5.60 | 3.82 | 4.56 | 3.47 | Median | 75.00 | 66.00 | 4.40 | 9.10 | 6.00 | 4.60 | 4.70 | 3.90 | First Quartile | 55.00 | 52.00 | 0.90 | 5.90 | 5.10 | 3.30 | 4.15 | 3.10 | Third Quartile | 96.00 | 81.00 | 6.45 | 12.90 | 6.40 | 5.40 | 5.15 | 4.40 | Range | 182.00 | 96.00 | 33.40 | 40.80 | 9.50 | 22.70 | 5.60 | 13.70 | Interquartile Range | 41.00 | 29.00 | 5.55 | 7.00 | 1.30 | 2.10 | 1.00 | 1.30 | Variance | 904.45 | 405.92 | 28.74 | 32.34 | 2.47 | 8.34 | 0.96 | 2.78 | Standard Deviation | 30.07 | 20.15 | 5.36 | 5.69 | 1.57 | 2.89 | 0.98 | 1.67 | Coefof variation | 39.69 | 30.05 | 120.39 | 59.26 | 28.03 | 75.62 | 21.50 | 48.04 |

4. analysis by risk | Return 2009 | 3-Year Return | 5-Year Return | | BA | A | AA | BA | A | AA | BA | A | AA | Mean | 6.31 | 6.87 | 8.31 | 4.75 | 5.01 | 4.17 | 4.11 | 4.2 | 3.62 | Median | 6.1 | 6 | 7.9 | 4.95 | 5.4 | 5.5 | 4.1 | 4.4 | 4.3 | 1st Quartile | 4.95 | 3.5 | 0.8 | 3.9 | 4.5 | 2.8 | 3.58 | 3.7 | 2.85 | 3rd Quartile | 8.13 | 10.8 | 13.85 | 6.1 | 6 | 6.25 | 4.9 | 4.9 | 4.8 | Range | 12.8 | 17.5 | 40.8 | 7.7 | 6.9 | 23.2 | 4.3 | 4.7 | 14.1 | Interquartile range | 3.18 | 7.3 | 13.05 | 2.2 | 1.5 | 3.45 | 1.33 | 1.2 | 1.95 | Variance | 7.33 | 19.27 | 85.36 | 2.46 | 2.36 | 14.48 | 0.87 | 0.92 | 4.84 | Standard deviation | 2.71 | 4.39 | 9.24 | 1.57 | 1.54 | 3.81 | 0.93 | 0.96 | 2.2 | Coef of Variation | 42.88 | 63.89 | 111.13 | 32.97 | 30.64 | 91.33 | 22.74 | 22.9 | 60.8 |

* According to table1,the above level risk have highest standard deviation and variance but lower standard deviation and variance among average risk level and below risk level. Therefore ,in the short term ,the risk above average level funds have higher profits but have more fluctuation at same time .the other two group are more solid. * According to table1 and figure1,all three groups show the central tendency in the graphic. The shape of risk below average is more symmetric than other two shape, but the risk below average have less variability than risk average level funds and risk above average level funds .

According to this figure, the shape of risk average level funds are generally higher and more smooth than other two groups, which means the return of average risk level funds are stable between 2005-2007.

Question? According to this figure and table 1, there are more risk blow average funds obtained higher return in long term 5 years. Considering the risk-profits level , below average group have better overall performance(Range, Variance, SD, CV ,more higher return )compare to average risk group and above higher risk group between 2005-2009

4. Conclusion (1 p)
The funds without fees tend to have the lowest expense ratio but more variability than the funds with fees
On average funds without fees have a higher return and less risk in a short term period (1 year horizon) than funds with fees.
On average funds without fees have a lower return and more risk in a medium term (3 years horizon) than funds with fees
On average funds without and with fees had the same return from 2005 to 2009 but more risk is associated with funds without fees
Therefore, for a short term and long term investment, it is safer to invest on funds that have no fees and for a medium-term investment it is safer to invest in funds with fees.