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FINANCIAL MARKET COURSES

Asset Allocation

Courses In This Course

Asset allocation is the process of deciding how an investment portfolio should be distributed among different asset classes. The importance of the process cannot be underestimated, with studies showing that over 90% of portfolio performance depends on the asset allocation decision. This course looks in detail at the key elements of asset allocation for investors and portfolio managers.

Objectives

In this course, you will explore:

The importance of asset allocation in creating market efficient portfolios

The risk and return characteristics of the main asset classes, including equities, fixed income, cash, real estate, and alternative assets

Strategic asset allocation

Tactical asset allocation

The creation of an optimal portfolio

Prerequisite Knowledge

A basic understanding of investment and portfolio theory is assumed.

Learner Profile

This course is designed for:

New recruits to the asset management industry

Portfolio and money managers

Private banking/wealth management executives and client relationship managers

Product specialists looking for a broader  view of the business

Non-client facing personnel requiring an understanding of the business they  support

Institutional and individual investors

  •    ASSET CLASSES (PART I)

    Overview

    An asset class can be defined generally as a group of securities or instruments that demonstrate similar characteristics, behave similarly in the market, and are essentially subject to the same laws and regulations. In simple terms, asset classes are the basic 'building blocks' of an investment portfolio.

     

    This course looks at how assets are classified and evaluated by investors and portfolio managers. It focuses on the equity asset class in particular, examining the features and characteristics of the class as a whole as well as its various subclasses. The other main asset classes – fixed income (bonds), cash and cash equivalents, real estate, and alternative assets – are described in the course ‘Asset Classes (Part II)’.

    Course Duration

    60 mins

    Prerequisite Knowledge

    Asset Allocation – An Introduction

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  •    ASSET CLASSES (PART II)

    Overview

    In the course ‘Asset Classes (Part I)’ we looked at how portfolio assets are classified and evaluated by investors and portfolio managers, with a particular focus on the equity asset class. This course looks at the risk/return characteristics and diversification benefits of other asset classes such as bonds (fixed income), cash and cash equivalents, real estate, and alternative assets such as commodities, private equity and hedge funds.

    Course Duration

    75 mins

    Prerequisite Knowledge

    Asset Classes (Part I)

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  •    STRATEGIC ASSET ALLOCATION

    Overview

    Strategic asset allocation refers to the long-term allocation of an investment portfolio to various asset classes based on an investor's goals and tolerance for risk. A portfolio's strategic asset allocation incorporates a base policy mix that should remain unchanged even when the market moves up or down.

     

    This course looks at the strategic asset allocation decision, which is generally recognized as the most important decision in the investment process and the key determinant of portfolio performance. It describes in detail how investors can rebalance their portfolio and the various considerations around such rebalancing.

    Course Duration

    75 mins

    Prerequisite Knowledge

    Asset Allocation – An Introduction

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  •    TACTICAL ASSET ALLOCATION

    Overview

    Tactical asset allocation is an active portfolio management strategy that involves diverging from a portfolio's strategic asset allocation (long-term asset mix) to exploit short-term opportunities for making above-average returns and/or taking on lower downside risk on certain asset classes. The success of any approach to tactical asset allocation depends on the ability of the investor/portfolio manager to predict short-term market movements.

     

    This course outlines the basics of tactical asset allocation, how TAA strategies are employed, and how they can add alpha to a portfolio.

    Course Duration

    50 mins

    Prerequisite Knowledge

    Strategic Asset Allocation

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  •    DERIVING THE OPTIMAL PORTFOLIO

    Overview

    This course explains how investors construct portfolios to achieve an optimal trade-off between risk and return. According to modern portfolio theory (MPT), rational investors are only interested in those portfolios which provide the highest expected return for a given level of risk (or which provide the lowest level of risk for a given expected return). Such portfolios are referred to as 'dominant' or 'efficient' portfolios and lie on a curve known as the efficient frontier. By drawing the efficient frontier, we can derive the optimal portfolio.

    Course Duration

    90 mins

    Prerequisite Knowledge

    Portfolio Theory – The Markowitz Model

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