Training Courses

Introduction to Financial Risk Management

Category: Risk

Course level: Intermediate

In house

This 3-hour workshop provides a fast-track introduction to the main risk measurement tools and explains their use in modern portfolio management.

Some basic understanding of investment products and strategies will be assumed. Although all relevant terms will be explained, prior attendance of our Introduction to Investment Management course will be an advantage.

Case studies form an integral part of the course, to enable delegates to consolidate the information and provide the basis for group discussions.

Objectives

By the end of the workshop, delegates will be able to:

  • define risk
  • explain and calculate the different risk measures such as beta and variance
  • understand how investment managers use risk measurement tools
    in building and analysing their portfolios
  • understand the client’s view of risk in terms of absolute and relative returns

Length

3 hours

Course Content

What does the client see as risk?

Institutional funds
    Matching liabilities, insufficient income, benchmark risk,
    inadequate benchmark, absolute return, etc.
Private client funds
    Income vs capital growth

Benchmarks

Institutional benchmarks
    WM, CAPS, tailored benchmarks
Private client benchmarks
    APCIMS, Cantrade
Case study: Investigating the client’s attitude to risk and return using firm’s materials

Indices

How indices are constructed (FTSE series, MSCI series)
Recent changes (e.g., free floats, new indices)

Efficient market hypothesis

Weak, semi-strong and strong form
Its implications for active vs passive fund managers

Modern Portfolio Theory

Measuring risk (standard deviation, beta, duration)
    Are historic risk measurements useful for making forecasts?
Building efficient portfolios
Case study: Calculating expected risk and return

Performance measurement

Time weighted vs money weighted
Performance attribution (asset allocation, stock selection, timing)
Risk attribution
    Sharpe ratio
    Information ratio
Worked example: Calculating the fund performance measurement and risk attribution)

This course would be suitable for:

  • Client services and call centres
  • HR and training
  • Investment administration and operations
  • Investment professionals
  • IT and software developers
  • Legal & Compliance
  • New entrants
  • Risk management
  • Sales and marketing

This course would be suitable for these exams:

  • CFA - Level 2
  • IMC
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