Asset Classes Paper Essay

The mutual entrepot chosen is Merrill kill Global and the Dow 30 governing body chosen is McDonalds. The asset classes for both the mutual fund and Dow 30 geological formation will be determined. The by-line will explain how classifications and the current enthronisation funds environment impact organizational decisions concerning the composition of these portfolios._Merrill lynch Global_Merrill lynch (2006).Merrill Lynch is a company that helps individual clients achieve financial success. With a professional advisor, customers can absorb a customized strategy with the customers goals in mind. It makes available to its clients a wide range of redactment products and services. When selecting the fund that best suits the clients need, some key factors to consider include a funds investment strategy, risk profile, investment performance, and relationship to the overall asset allocation strategy and investment time horizon._ air division A Sh bes_. Typically, the most preferred tier of classified stock, offering more take rights than house B sh atomic number 18s. Class A shares are designed to insulate circumspection from the short-term swings of Wall Street, by allowing those in management to control a small substance of the equity of the company but still maintain voting power. These types of shares are not sold to the public and cannot be traded, which supporters say allows management to focus on long goals.Class A shares annual operating expenses typically include an annual asset- base distribution and service payment of up to .35% (Mutual Funds. 2006). This annual fee is used to compensate the funds distributor and firms like Merrill Lynch for shareholder servicingand distribution-related services. Class A shares are generally more economical for investors who seek to invest larger amounts and have a longer term time horizon._Class B Shares_. Class B shares typically do not censure a front-end sales charge, so all of the assets are immediately invested in a fund. Class B shares usually impose a contingent deferred sales charge (CDSC) which may be charged to shareholders who redeem Class B shares within a certain number of years. This charge declines over time and is eventually limited. Class B shares are more economical for investors who have an negociate to longer term time horizon and have slight than $100,000 to invest in a fund familys equity funds or less than $50,000 to invest in a fund familys fixed income funds (Mutual Funds. 2006)._Class C Shares_. Class C shares usually do not impose a front end sales charge at the time of purchase. All of the clients assets are immediately invested in the fund. It is common for Class C shares to impose a CDSC up to 1.00% of the redemption amount during the first year or longer (Mutual Funds 2006). Unlike Class B shares which convert to Class A shares after a period of time, C shares generally do not have a conversion feature. Compared to Class A and Class B shares, Class C s hares generally become less economical for investors who plan to invest over a longer term.Merrill Lynchs compensation differs by share class. The fund share class specific compensation is the basis upon which Merrill Lynch Financial Advisors are paid. Some funds may set higher sales charges and asset based fees for a fussy class than do other funds for the same class. Merrill Lynch policy sets a limit as to the maximum sales charges or asset based fees included in the Financial Advisors compensation practice based on the share class and size of investment to minimize potential conflicts of interest based on differential compensations (Mutual Funds. 2006).Merrill Lynch is a diversified financial services company. It can be judge to pursue additional business opportunities with the firms whose mutual funds Merrill Lynch makes available to its customers._McDonalds (MCD)_The Dow 30 organization chosen for this paper is McDonalds. McDonalds was founded in 1948 and is based in Oak Bro ok, Illinois. McDonalds Corporation operates as a foodservice retailer worldwide. It operates and franchises McDonalds restaurants, which offer various food items, and soft drinks and other beverages. As of July 14, 2006, it operated nearly 31,000 restaurants in 100 countries ( hayseed Finance).McDonalds change in cash and cash equivalents is a difference of $2,718,200. In 2003, the cash and cash equivalents were at $162,400 and in 2005 the cash and cash equivalents were at 2,880600. The total cash flows from funding activities was (1,736,800) in 2003 and 361,600 in 2005. The cash flows grew substantially throughout the three years (Yahoo Finance).McDonalds Income Statement shows a revenue of 21.23B, and quarterly revenue growth of 9.40%, a gross profit of 6.32B, a diluted EPS of 2.22 and quarterly earnings growth to be at 57.30%. The balance sheets total cash in 2005 is set at 3.29B. The net income for 2003 was $1,471,400 then greatly increasing in 2004 to 2,278,500 then increas ing a little more to $2,602,200 in 2005 Yahoo Finance (2006).The stock price history for McDonalds shows Beta, a measure of securitys or portfolios volatility or systematic risk, in simile to the market as a whole, to be at .92. In my reading for this past couple of calendar weeks, I have learned that many utilities stocks have a beta of less than 1. McDonalds 52 week low on September 21, 2005 was set at $31.31 while its 52 week high on February 8, 2006 was set at 36.75 Yahoo Finance (2006).Overall, McDonalds has been growing since 1948 at a great pace. McDonalds second quarter operating results was fueled by strong sales and margin performance worldwide. McDonalds EPS compared to competitors is much higher at 2.218 with Burger King at .235 and Wendys at 1.056 (Yahoo Finance. 2006). McDonalds has done an elegant job with their employees, stocks, investments, and all aspects of the fast food organization.REFERENCESMutual Funds Investing at Merrill Lynch (2006). Retrieved on August 12, 2006 from http//askmerrill.ml.com/publish/marketingcenters/products/MF_DisclosureDocument_0406.pdf .Merrill Lynch (2006). Achieve Life on Your Terms. Retrieved on August 13, 2006, from http//askmerrill.ml.com/fa_front/1,2280,,00.html?pg=cnp.Yahoo Finance (2006). Retrieved August 13, 2006, from http//finance.yahoo.com/q/ pr?s=mcd.