Investment Policy at New England Healthcare Harvard Case Solution & Analysis

Investment Policy at New England Healthcare Case Study Help

Alternative Quantitative Analysis

Note: the rate or return is based on assumptions.

The above analysis of the investment made by NEH shows that they will earn more if they invest in mutual funds. In the above discussion; we have observed that the NEH needs to take decision for the investment of its pension funds consisting of balance pension fund and final salary pension fund. The NEH is more concerned about the pension funds. The quantitative analysis clearly shows that if the NEH invests in mutual fund, they will earn more than investing in Treasury bond. (unknown, The Pros of Investing in Mutual Funds, 2019)

Although investing in mutual funds is risky, but the current financial condition of NEH is better than others in the market. It has the tendency to bear if any type of loss incurs. They can clearly and easily meet their current liabilities due to good performance of the NEH.

The T-bonds are less risky and the NEH might not suffer in future. They are more liquid than the mutual funds, but the earning would be low in investing, in treasury bond. (sraders, 2019)

Recommendations

As a member of investment committee; I would suggest the NEH to invest its pension fund in mutual funds. They will earn more than investing in the treasury funds. The liquidity of NEH is high, due to which it can easily meet all its current NEH, without any hurdles. Although the cost of investing in mutual funds is higher than investing in treasury bonds, but still the NEH will earn more than it has been paying to its fund’s manager.

The NEH won’t face huge any amount of interest rate risk, in mutual funds as well. The mutual fund pool diversifies the investment of the investors, so the risk is also diversified. Although they will face loss, but the amount of loss will be much lower than directly investing into mutual funds.

So, in end the, most feasible fund to be invested in by NEH, is mutual fund, which would help the NEH in earning more revenues.........................................

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