You work on the currency trading desk of a large international investment bank. Your boss has asked you to forecast what the exchange rates (USD/AUD, EUR/AUD and GBP/AUD) are going to be on 3 October 2018. Your boss has stressed that you must use a number of different methodologies to forecast these rates and then you must combine the results of these methodologies into one summary forecast for each exchange rate.

As your boss is feeling generous, he has decided to let you speculate with AUD$100 million of the bank's money to try and profit from your forecasts. He suggests that you try and make as much money as you can assuming that your forecasts are correct. Any profits will be split between you and the bank. You make money by changing your AUD into the foreign currencies now and then back again to AUD at the end of the period. In other words you will profit if you put some of your money into a foreign currency that appreciates against the AUD.

Your boss is a busy man so at most he wants to read 5 pages (1000 words) of information about your forecasts and trading strategy. This includes text and graphs. References should be included in the text or in footnotes. Your boss does not want to see a separate reference list and does not want to see any appendices. Your boss does not need you to define or introduce your methodologies, just apply them.

Introduction

Mutual fund department head wants to take decision on investment in global funds. The report has analyzed the encouraging as well as discouraging factors associated with investing in global funds. The recommendation made is based on the literature review of the journals and recent articles in same context.

Literature Review : Global Investment

Global funds investment, in context of mutual fund, refer to funds that can be invested anywhere in the world, including own country(VK Pool 2016). The main benefit advertised for these funds is diversification of funds due to different investment opportunities available all around the world. The other opportunity associated with the fund is the tax benefit associated with investment while investing outside the country(Gurceio 2014).

The conventional market gets riskier with time, which leads to investment shrinking of domestic investment return.  From 2007 onwards global and international funding has gained momentum in mutual fund market. Global funds stands for investment made anywhere in the world in accordance with the profitability while international fund invest the fund anywhere in the world except own country(Gjergji 2015). Global fund could be said to be more profitable investing opportunity as compared to international fund as baring own country for investment leads to loss of profitable opportunity available within the country(Barber 2016).

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