AFTAB ALI

MBA (CS) FINANCE

BILL MILLER AND VALUE TRUST

1. How well has trust performed in recent years? In making that assessment, what
benchmark(s) are you using? How do you measure investment performance? What does
good performance mean to you?
Ans: The mutual fund managed by the William H (Bill) outperformed in the mutual fund portfolio
business, value trust an 11.5-billion mutual fund in 2005. These mutual fund assessments based
on given index benchmark return, the average return of index is compared with the mutual fund
return. The return of mutual fund should be higher than given index benchmark return. Good
performance our mutual fund greater return over industry benchmark.

2.What might explain the fund’s performance? To what extent do you believe an investment
strategy, such as Miller’s, explains performance?

Ans: Funds’ performance on the basis of mostly used first percentage of annual growth rate (NAV)
assuming reinvestment and total return on investment, second dollar value today of an investment
in past. Performance compared with index benchmark. Millers approach was to research intensive
and highly concentrated. 50% of asset invested in 10 large capitalization companies. He was
concentrated in few companies, where intensive chances of higher return. Most of investment were
value stock and he was not risk averse to take long position in the stock of growth companies.

3. How easy will it be to sustain Miller's historical performance record into the future? What
factors support your conclusion?

Ans: Value trust earned cumulative return of more than 830% over the previous 14 years, more
than double of its average peer and index. According to Morningstar Miller remained modest about
his record, because market is efficient and it surpass many people. Miller earn in the future because
of his past remarkable success, he believes in long run and took undervalue stock. When prices go
down. He favored the strategy other people sell the stock but buy those stock and get return of it.

4. Consider the mutual fund Industry. What role do portfolio managers play? What are
differences between fundamental and technical security analysis? How well do mutual funds
generally perform relative to the overall market?

Ans: Fund managers constantly monitor market and economic trends and analyses securities in
order to make informed investment decisions. They play a vital role in implementing a consistent
investment strategy that is in synergy with the goals and objectives of the fund. Technical analysis
based on trends in stock prices, volume and market sentiment. Fundamental analysis based on
economic fundamentals and growth of industry. fundamental analysis is looking to financial
statement of company, Analyst measure the intrinsic value of company. fundamental analysis
involved long term approach as inverse of technical short-term approach. Mutual funds manager
well performed because of well diversified portfolio and investment in large capitalization
companies where lot of chances of return.

5. What is capital market efficiency? What are its implications for investment performance
in general? What are implications for fund managers, if the market exhibits characteristics
of strong, semi strong, or weak efficiency? strong, semi strong, or weak efficiency?
Ans: The present asset price accurately reflects current information in the market place. General
available to everyone it cannot gives you abnormal return because everybody has same kind of
information. If the information is correct then all current prices reflects true value. The fund’s
manager implicated the strong form market efficiency held that today stock prices reflected all the
information that gather through deep analysis of company and economy as a whole. In which
manager look prices on basis of analysis of company and economy, which give us whole regarding
decision of taking stocks of company.

6. Suppose that you are an advisor to wealthy individuals in the area of equity investments.
In 2005, would you recommend investing in Miller's Value Trust? What beliefs about the
equity markets does your answer reflect?
I suggest wealthy individual to invest in Millers value trust because of past performance of Miller
and will generate more return than given benchmarks. Miller tool undervalued stock which go
down in recent and it will go up in near future that will make best return for my client, the Miller
have great experience and lucky investor. Miller will generate more return in future.