Henry Investment and Income Fund starts the year with Net Asset Value (NAV) of MYR 1.2250 per unit. By the year-end, Henry Investment and Income Fund portfolio has the following composition of stocks as shown in the table below: 

Stock	Number  (Units)	of	Shares	Price per Share (MYR)
A	250,000			8.50
B	350,000			20.50
C	450,000			8.20
D	500,000			2.50

 The fund has 1.5 percent expense ratio. Currently, there are 10 million shares outstanding. The fund investment objective stated in the fund fact sheet was to outperform the KLCI benchmark. In the same year, the KLCI Index started at 1,580 points and closed at the current level of 1,650 points. 

 

Required: 

 Suppose that the standard deviation for Henry Investment and Income Fund and KLCI is calculated as 14% and 8%, respectively. The estimated beta for Henry Investment and Income Fund is 1.3 and the current risk free 3-month T-Bill rate is 2.5%. Evaluate the performance of Henry Investment and Income Fund using the Sharpe ratio.

Answer rating: 100% (QA)

To evaluate the performance of Henry Investment and Income Fund using the Sharpe ratio you can follo... View the full answer