Introduction

Mutual funds and exchange-traded funds (ETFs) are among the most popular investment vehicles for both individual and institutional investors. These funds provide investors with diversification, professional management, and liquidity. This 5-day training course is designed to provide participants with a deep understanding of mutual funds and ETFs, their structure, performance evaluation, trading strategies, and how they fit within an investment portfolio. The course will also explore the differences between the two and the evolving trends in the mutual fund and ETF markets.

Course Objectives

• Understand the basic structure, functioning, and regulatory environment of mutual funds and ETFs.
• Learn the differences and similarities between mutual funds and ETFs, including their advantages and disadvantages.
• Gain insights into portfolio construction using mutual funds and ETFs.
• Learn how to evaluate the performance of mutual funds and ETFs.
• Understand the role of mutual funds and ETFs in asset allocation and portfolio management.
• Explore emerging trends in mutual funds and ETFs, including ESG (Environmental, Social, Governance) investing and thematic ETFs.

Who Should Attend?

• Investors, financial analysts, and portfolio managers.
• Wealth managers and financial advisors working with mutual funds and ETFs.
• Institutional investors and corporate finance professionals.
• Individuals looking to understand the benefits and risks of mutual funds and ETFs.
• Academics and students interested in mutual funds and ETFs.

Day 1: Introduction to Mutual Funds and ETFs

• Session 1: What Are Mutual Funds and ETFs?
  • Definition and basic concepts of mutual funds and ETFs.
  • Differences between mutual funds and ETFs: Structure, trading, fees, and investment strategies.
  • Key benefits: Diversification, professional management, liquidity, and cost-effectiveness.
• Session 2: Types of Mutual Funds and ETFs
  • Types of mutual funds: Actively managed, passively managed, and sector-specific funds.
  • Types of ETFs: Equity ETFs, bond ETFs, commodity ETFs, and thematic ETFs.
  • Understanding open-ended vs. closed-end mutual funds and ETFs.
• Session 3: Regulatory and Operational Aspects
  • Overview of the regulatory environment: SEC and global regulations governing mutual funds and ETFs.
  • Role of fund managers, custodians, and administrators.
  • How mutual funds and ETFs are created and managed: NAV calculation, share issuance, and redemption.

Day 2: Mutual Funds – Structure, Performance, and Strategy

• Session 1: Structure of Mutual Funds
  • How mutual funds are structured: Fund families, shareholders, and NAV calculation.
  • The role of fund managers and the impact of active vs. passive management.
  • How mutual funds are marketed and sold: Direct vs. brokered sales, front-end loads, and back-end loads.
• Session 2: Evaluating Mutual Fund Performance
  • Key metrics for evaluating mutual fund performance: Total return, alpha, beta, Sharpe ratio, and expense ratio.
  • How to compare mutual fund performance to benchmarks and peer groups.
  • Performance persistence in actively managed funds.
• Session 3: Investment Strategies in Mutual Funds
  • Active management vs. passive management: Strategies and philosophies.
  • Understanding various investment strategies: Growth, value, sector-specific, and fixed income.
  • The role of mutual funds in portfolio construction: Asset allocation and diversification.

Day 3: ETFs – Structure, Performance, and Strategy

• Session 1: Structure of ETFs
  • How ETFs are structured: Creation and redemption process, authorized participants (APs), and market makers.
  • Key differences between ETFs and mutual funds: Trading, liquidity, pricing, and costs.
  • The role of ETFs in passive investing and tracking indices.
• Session 2: Evaluating ETF Performance
  • Key metrics for evaluating ETFs: Tracking error, total return, liquidity (bid-ask spread), and expense ratio.
  • How ETFs compare to mutual funds in terms of performance and costs.
  • The importance of liquidity and market-making in ETF performance.
• Session 3: ETF Investment Strategies
  • Strategies for using ETFs: Index tracking, sector rotation, and thematic investing.
  • Leveraged and inverse ETFs: Understanding the risks and uses.
  • Using ETFs in portfolio construction: Asset allocation, diversification, and hedging.

Day 4: Portfolio Construction and Asset Allocation with Mutual Funds and ETFs

• Session 1: Asset Allocation Using Mutual Funds and ETFs
  • The role of mutual funds and ETFs in an asset allocation strategy: Equity, bonds, commodities, and alternatives.
  • Diversification benefits and constructing balanced portfolios using mutual funds and ETFs.
  • How to match investment goals with appropriate fund types: Risk tolerance, time horizon, and investment objectives.
• Session 2: Active vs. Passive Investing with Mutual Funds and ETFs
  • Understanding the debate between active and passive management: Performance, costs, and risks.
  • Benefits and drawbacks of active mutual funds vs. passive ETFs.
  • Case study: Performance comparison between active mutual funds and passive ETFs over time.
• Session 3: Managing Risk with Mutual Funds and ETFs
  • Managing risk through diversification with mutual funds and ETFs.
  • How to use ETFs for tactical asset allocation and risk management (hedging and sector rotation).
  • Evaluating risk exposure and rebalancing portfolios with mutual funds and ETFs.

Day 5: Emerging Trends, ESG Investing, and Future of Mutual Funds and ETFs

• Session 1: The Rise of Thematic ETFs and Smart Beta
  • The evolution of thematic ETFs: Technology, ESG, clean energy, and cryptocurrency.
  • Understanding Smart Beta strategies: Factor investing and the role of quantitative models.
  • How thematic and Smart Beta ETFs are changing the investment landscape.
• Session 2: ESG (Environmental, Social, Governance) Investing with Mutual Funds and ETFs
  • What is ESG investing? Key principles and practices.
  • The rise of ESG mutual funds and ETFs: How they integrate ESG factors into investment decisions.
  • Assessing the performance and impact of ESG-focused funds.
• Session 3: The Future of Mutual Funds and ETFs
  • Innovations in mutual fund and ETF products: Active ETFs, ESG ETFs, and sustainable investment strategies.
  • The role of technology in fund management: Robo-advisors, AI, and big data.
  • Trends and challenges in the mutual fund and ETF industries: Cost compression, regulatory changes, and investor preferences.

Course Conclusion

• Recap of Key Learnings
• Interactive Q&A Session
• Certification of Completion