Introduction to Fund Management

Course Overview:

This two day interactive programme is designed to offer an insight into the working practices of today’s Fund Managers – the Buyside of the industry. Emphasis will be on the practical, not theoretical.

The content will cover how the Managers invest across the traditional investable universe (Bonds, Equities & related Derivatives), as well as how they deal with the inherent everyday risks in the markets & how to incorporate alternative investments like Hedge Funds into mainstream Portfolios.

Course Content:

Day One:

Modern Portfolio Theory and Efficient Markets as applied to today’s environment
 Efficient Markets – Are they? Do we live in a ‘Normal’ world?
 Behavioural Finance & its impact on current thinking
 The Capital Asset Pricing Model and Efficient Frontiers
 Betas and the search for Alpha
 What should we expect from Equities? The lessons of history
 What is the correct Equity Risk Premium now?

Case Study – Beta at work in practice

Active Equity Portfolio Management – Valuation screens
 Which valuation methodology to choose? It depends on the sector
 Price Earnings Ratios & PEGs
 Dividend Yields - Equities as a source of income
 Asset Backed valuation
 Enterprise Values & EBITDA

Case Study – A walk through a New Issue’s Valuation criteria

Passive Portfolio Management using Exchange Traded Funds
 ETFs & traditional Index Funds compared
 Understanding ETFs, the replication mechanism
 Primary (Redemption, Creation process) & Secondary markets
 Core vs Satellite investing
 ETF Variations on a theme - Inverse, Leveraged, Thematic, Active

Bond Portfolio Management styles
 Interest Rate sensitivity (Modified Duration)
 Actively or passively Managed, Sensitivity to Credit Risk
 Maturity targeting, Gross Redemption Yield
 Interest Rate anticipation
 Yield Curve strategies
 Yield/Credit spread strategies

Case Study – Comparing Sovereign Yield Spreads across the Eurozone



Day Two:

Portfolio Construction in practice
 How have Wealth Managers’ invested their Clients’ wealth to date?
 Investments of ‘passion’
 Changing Asset allocation strategies in today’s Markets
 Diversification vs Correlation
 Client profiles and model portfolios

Case Study – Putting together a Portfolio for a HNWI in practice

Using Derivatives in Portfolio Management
 Which products do the Portfolio Managers mainly use & why?
 Index Futures – Hedging, Margin requirements
 Options Trading Strategies for Equity Fund Managers
 Contracts for Difference
 Credit Default Swaps for Bond Fund Managers

Case Study – CDS pricing in practice

Risk Measurement and Management across the Investable Universe
 Volatility – Statistical probability and dispersion of returns
 Fat Tails in Finance & Black Swans explained

Case Study – Volatility in practice across the Mutual Fund Universe

 Sharpe Ratios – Risk adjusted performance measurement
 Portfolio Optimisation and rebalancing (Excel demonstration)
 Value at Risk

Using Alternative Investments in the Portfolio
 Hedge Funds defined
 Rationale for Hedge Funds in an Investors’ Portfolio. Is it still there?
 The non-correlated Asset Class, Survivorship Bias, Drawdown
 Leverage, Risk and Transparency
 Institutionalisation of Hedge Funds, Index Providers – Benchmark Risk

Case Study – How do investors choose their Hedge Fund Managers?

Delivery:	Classroom
Regions:	London
Category:	Fund Management