Training Courses

Investment Management Explained

Category: Investment Management

Course level: Introductory to Intermediate

In house

The two-day course is designed to unlock the mystery surrounding the investment industry.

Each subject is tackled on an assumption of no existing knowledge. All terms and jargon are fully explained.

The course is designed to instil confidence in the delegates and give them a detailed understanding of investment products and process. It will enable them to better understand their role in a firm and how they can enhance their effectiveness.

The course explores the main asset classes, their risk and return, valuation tools, trading and settlement. Modern Portfolio Theory is fully explained, as is its application to client portfolios, as well as practical aspects of administering portfolios and measuring investment performance.

The course also covers the structure of investment firms and the relationships with external providers, and follows a transaction from the front office, through the dealing process and on to settlement and custody.
 
Case studies and group discussions form an integral part of the course, to allow the delegates to consolidate the information.

Objectives

By the end of the course, delegates will have a better understanding of:

  • clients of the firm – retail, private wealth management, institutional, their aims and objectives, risk profiles
  • investment products – types, distribution and pricing
  • the main asset classes – risk and return profiles, pricing and valuation tools used by investment managers
  • investment strategies and styles
  • typical structure of an investment firm
  • performance measurement, attribution and risk analysis, benchmarking


By the end of the course, delegates will be able to calculate:

  • fair value of fixed income securities using DCF
  • common pricing ratios for equities (e.g., P/E, NAV)
  • fair value of a futures contract and margin required
  • portfolio risk and expected return
  • absolute and relative performance for a portfolio
  • alpha, beta and the information ratio

 

Length

2 days

Course Content

DAY ONE

Savers and borrowers

Relationship between personal savings and capital flows to governments and industry
Role of investment firms as intermediaries
Debt vs equity – risks and potential rewards

Investment objectives

Client’s time horizon
Income vs capital growth
Ethical investments (SRI policies)
Meeting future liabilities
Risk tolerance
Case study: Structured products – syndicate groups will build a portfolio using retail investment products (premium bonds, national savings, funds and cash deposits)

Asset classes


Shares (equities)
Fixed income – corporate and government bonds
Cash
Real assets
    Property, art, commodities, etc.
Alternative assets
    Hedge funds, private equity, venture capital
Derivatives
Risk
Returns from different asset classes

Winning new business

Institutional sales and marketing
Retail fund distribution

Investment products – institutional pension schemes

Defined benefit vs defined contribution
Who controls the scheme?
    Plan sponsor, actuary, consultants, trustees, members
    Statement of Investment Principles and SRI policies
Pensions Act 2004
    Role of the regulator, Pension Protection Fund
Fee structures
    Asset allocation
Strategic allocation and TAA
Investment approaches
    Balanced funds
    Core plus satellite
    Multi-manager approach
Specialist approaches
    Hedge funds

Other institutional products

Insurance
White labelling
Charities
Local authority pensions

Investment products – retail funds
Collective Investment Schemes
    Unit trusts, OEICs and SICAVs
    FSA Investment restrictions (UCITS III)
    Role of the trustee/depository
Fund distribution – fund supermarkets, open architecture, IFAs, banks
Fund pricing
    Fees and TERs

Other retail products

ISAs
Pensions
    Personal pensions and stakeholder pensions
Umbrella funds (broker funds, fund of funds)
Wrap accounts
Investment trusts

Wealth management

Investment objectives
Private pensions – SIPPS, SSASs
Hedge funds
Segregated vs unit-linked funds
Case study: Building an investment portfolio for a lottery winner - each syndicate will build a global portfolio using retail funds to meet their long-term goals

Investment strategies

Index tracking styles
    Replication, sampling, optimiser models, using index futures
Active styles
    Top-down vs bottom-up
    Growth vs value investing (stock selection)

Performance

Performance
    Absolute vs relative
    Sector average vs indices
Information ratio
Case study: Performance review of a retail fund

The structure of an investment institution

The front office
    Role of portfolio managers, analysts, strategists,
    economists, etc.
The middle office
    Dealing, FX deals
Investment administration
    Fund admin (settlements, custody, cash management,
    stock
reconciliations and valuations)
Client services, business operations
Compliance and the regulatory environment
Following a transaction through the market
Case study: The dealing process
Delegates will be divided into two groups and asked to place various dealing processes in the correct order
The first group will work with the purchase of a stock by a portfolio manager
The second group will look at the purchase of a fund by a retail client
 
 
DAY TWO

Fixed income

Pricing

Duration
Credit risk
Managing fixed income funds
Case Study: Looking at retail fixed income fund strategies

Equities

Pricing equities
    Fundamental, quantitative and technical analysis
    Managing equity funds
Case Study: Looking at retail equity fund strategies

Cash and Money Market Instruments

Cash
Cash equivalents (T-bills, CDs, CPs)
Case Study: Looking at retail cash funds

Currencies

Currency hedging
Currency overlays

Alternatives

Property
Commodities
Infrastructure

Derivatives

Forwards and futures explained
Using derivatives
    Hedging and asset switching

Modern portfolio theory

Calculating expected returns
Measuring risk
    Beta, standard deviation, volatility
Other risks
    FX risk, custody, settlement, business risk, legal risk, etc.
    Benchmark risk
Case study: Calculating expected risk and return

Building portfolios

Index-tracking strategies
    Sampling, optimisers, replication
Active strategies
    Growth vs income strategies
    Top-down vs bottom-up strategies
    Quant approaches
Core plus satellite
Multi-manager strategies
Hedge fund strategies
Case study: Tactical asset allocation

Performance measurement

Time-weighted and money-weighted returns
Performance attribution
Benchmarks
    Tailored benchmarks, using industry sectors, using indices
Risk-adjusted returns (Sharpe and information ratios)
Alpha
Case Study: Performance and risk attributes of a retail fund

 

This course would be suitable for:

  • Finance and accounting
  • HR and training
  • Investment administration and operations
  • Investment professionals
  • IT and software developers
  • Legal & Compliance
  • New entrants
  • PR and recruitment firms
  • Risk management
  • Sales and marketing

This course would be suitable for these exams:

  • CFA - Level 1
  • CFA - Level 2
  • IMC
  • SII Diploma - Fund Management
  • SII Diploma - Private Client Investment Advice and Managment
  • SII IAQ - Collective Investment Schemes
  • UKSIP - Introduction to Investment
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