Portfolio Management & Performance Measurement

This Portfolio Management programme is designed to ensure that participants fully understand the core concepts of portfolio analysis.

The key skills that the participants will attain during the Portfolio Management programme are as follows;

The Fund Management Process

  • An understanding of the way in which a fund management investment process works and how portfolio analysis fits into a fund management process

Risk and Return

  • An understanding of all the core concepts involved in portfolio construction including market efficiency, the risk/return trade-off, combining investments, correlation, normal distribution and investment styles

Performance Measurement

  • An understanding of all the core concepts involved in portfolio performance measurement including benchmark construction, sector and stock level attribution and presenting performance using global investment performance standards

Investing in Different Asset Classes

  • An understanding of the characteristics of the equity, fixed income and alternative assets classes, their risk and return characteristics and the specific issues associated with analysing different asset classes in portfolios.

The programme will contain numerous practical case studies to assist the participants in their understanding of the material covered. The participants will require financial calculators to complete the case studies. 

This course can be presented in-house via live webinar.

Portfolio Management Course Content:

Day One

Introduction to Portfolio Analysis – The Fund Management Process

  • The key elements of a fund management process
    • The client
    • The portfolio manager’s role
    • Portfolio analysis
  • The decision making process
  • Active vs. passive management
  • Asset allocation vs stock selection

Portfolio Analysis – Returns and Risk

  • The starting point, what does the client want? – investor indifference curves
  • Fundamentals of calculating returns
    • Money weighted returns
    • Time weighted returns
    • Unit pricing
    • Dealing with currencies and fees
  • Measuring risk (1)
    • Variance and standard deviation as a measure of risk
  • Normal distribution – beware the Black Swan
  • Diversification in a portfolio – covariance and correlation
  • Reducing risk
    • Two-stock portfolio
    • Multi-stock portfolio

Day Two

Portfolio Analysis – Returns and Risk (continued)

  • Calculating risk (2) – Analysing portfolios for different types of risk
    • Defining risk
    • The various risk measures
      • Absolute risk measures
      • Relatives risk measures
      • Downside risk measures

Portfolio Analysis – Performance Measurement

  • Performance analysis – benchmarks
    • Relatives and absolute benchmarks – how are each treated?
    • Indices and composite indices – how are indices constructed?
    • Peer groups – how to choose peer groups
    • Excess returns
  • Portfolio attribution
    • Fama decomposition
    • Portfolio attribution – sector/stock level analysis
  • Presenting performance
    • Global Investment Performance Standards (“GIPs”)

Dealing With Different Asset Classes

  • Equity investments in private and institutional portfolios
    • Key risk and return attributes of equities
    • Equity portfolio analysis and performance measurement issues
  • Bond investments in private and institutional portfolios
    • Key risk and return attributes of bonds
    • Bond portfolio analysis and performance measurement issues
  • Alternative investments in private and institutional portfolios
    • Key risk and return attributes of commodities and real estate
    • Alternative investment portfolio analysis and performance measurement issues
  • Using derivatives in private and institutional portfolios
    • Why use derivatives?
    • Derivative portfolio analysis and performance measurement issues

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