Introduction

Portfolio management is a vital aspect of investment strategy, focusing on optimizing the allocation of assets in order to achieve specific financial goals, while managing risk and maximizing returns. This 5-day course is designed to provide participants with the tools, strategies, and techniques necessary for effective portfolio management. Through a combination of theoretical concepts and practical applications, participants will learn how to build, manage, and evaluate investment portfolios in different market conditions. By the end of the course, participants will be equipped with the skills to make informed decisions, balance risk and return, and align portfolios with client goals.

Course Objectives

• Understand the key concepts of portfolio management, including asset allocation, diversification, and risk management.
• Learn how to construct a portfolio that meets specific investment objectives and risk tolerance.
• Gain knowledge of modern portfolio theory (MPT) and efficient frontier analysis.
• Understand performance measurement techniques, including the use of financial ratios and benchmarks.
• Learn advanced strategies for portfolio optimization and the management of equity, fixed income, and alternative assets.
• Develop an understanding of portfolio performance attribution and risk-adjusted returns.

Who Should Attend?

• Investment managers, portfolio managers, and financial analysts who want to enhance their portfolio management skills.
• Financial professionals working in asset management, private equity, and hedge funds.
• Business owners and individuals looking to understand how to better manage their investment portfolios.
• Students or professionals seeking to advance their knowledge in finance, investment, and portfolio management.

Day 1: Introduction to Portfolio Management and Asset Allocation

• Session 1: Overview of Portfolio Management
  • The role of portfolio management in investment strategy
  • The relationship between risk and return in portfolio theory
  • Key principles of portfolio management: diversification, asset allocation, and optimization
• Session 2: Modern Portfolio Theory (MPT)
  • Introduction to MPT and the efficient frontier
  • The concept of risk-return trade-off and the importance of diversification
  • How to construct an optimal portfolio using MPT: expected returns, standard deviation, and correlation
• Session 3: Asset Allocation Strategies
  • Strategic vs. tactical asset allocation
  • Asset classes: equities, fixed income, real estate, commodities, and alternatives
  • Determining the optimal asset allocation based on client objectives, risk tolerance, and investment horizon

Day 2: Risk Management in Portfolio Management

• Session 1: Understanding Risk in Portfolios
  • Types of risk: systematic vs. unsystematic risk, market risk, credit risk, and interest rate risk
  • Measuring portfolio risk: standard deviation, variance, and correlation
  • The role of beta in measuring portfolio risk and sensitivity to market movements
• Session 2: Portfolio Diversification
  • The importance of diversification in managing risk
  • How to diversify across asset classes, sectors, and geographical regions
  • The benefits and limits of diversification in reducing portfolio volatility
• Session 3: Advanced Risk Measures
  • Value at Risk (VaR) and Conditional Value at Risk (CVaR)
  • Drawdowns and downside risk measures
  • Stress testing and scenario analysis to assess potential portfolio vulnerabilities

Day 3: Investment Strategies and Optimization

• Session 1: Active vs. Passive Portfolio Management
  • Understanding the difference between active and passive strategies
  • The advantages and disadvantages of active vs. passive investing
  • Using index funds and exchange-traded funds (ETFs) for passive portfolio management
• Session 2: Portfolio Optimization Techniques
  • Introduction to portfolio optimization using quadratic programming
  • The role of constraints in optimization (e.g., minimum or maximum allocation in asset classes)
  • How to implement the Markowitz Efficient Frontier model for optimal portfolio construction
• Session 3: Factor Models and Risk Premia
  • Understanding factor models: Fama-French, Carhart, and multi-factor models
  • Identifying risk premia in equity, fixed income, and alternative investments
  • How to use factor models to construct portfolios with specific risk-return profiles

Day 4: Performance Evaluation and Attribution

• Session 1: Performance Measurement
  • Introduction to performance measurement: return on investment (ROI), total return, and yield
  • Risk-adjusted performance metrics: Sharpe ratio, Treynor ratio, and Jensen’s alpha
  • The importance of benchmarking and comparing portfolios to market indices
• Session 2: Portfolio Performance Attribution
  • Understanding performance attribution: return contributions from asset allocation, security selection, and market timing
  • How to decompose portfolio performance to evaluate management decisions
  • Methods of attribution analysis: Brinson-Fachler and Multi-Factor models
• Session 3: Benchmarking and Adjusting for Risk
  • Selecting the right benchmark for portfolio comparison
  • Adjusting performance metrics for risk and market conditions
  • How to assess the effectiveness of portfolio managers using relative performance analysis

Day 5: Advanced Portfolio Management Techniques and Global Trends

• Session 1: Managing Multi-Asset and Global Portfolios
  • Strategies for managing portfolios with multiple asset classes (equities, bonds, commodities, and alternatives)
  • The impact of global economic trends on portfolio construction: inflation, interest rates, and political risk
  • Currency risk and how to hedge it in global portfolios
• Session 2: Tactical Asset Allocation and Dynamic Rebalancing
  • Using tactical asset allocation (TAA) to adjust portfolios based on market outlook and economic conditions
  • Techniques for dynamic rebalancing: strategic and tactical shifts
  • How to respond to changing market conditions, economic cycles, and geopolitical risks
• Session 3: Ethical Considerations and Sustainable Investing
  • Incorporating environmental, social, and governance (ESG) factors into portfolio management
  • The rise of socially responsible investing (SRI) and impact investing
  • Regulatory considerations for managing sustainable portfolios

Course Conclusion

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