Investment Management Essentials Training Course

Participants can calculate core return and risk measures and explain their limitations.

• Arithmetic and geometric returns calculated from periodic portfolio valuations
• Time-weighted returns separated from cash-flow effects using subperiod linking
• Money-weighted return estimated with internal rate of return methodology
• Nominal returns converted to real returns using inflation adjustment
• Annualised volatility, covariance and correlation interpreted for portfolio construction
• Normal distribution assumptions tested against skewness, kurtosis and tail risk
• Risk-adjusted performance measured using Sharpe ratio and information ratio

Participants can assess economic and market conditions affecting expected asset-class returns and risks.

• Business-cycle indicators connected to asset-class return expectations and risks
• Central-bank policy transmission traced through yields, credit and currencies
• Yield curves interpreted using level, slope and curvature changes
• Inflation surprises assessed for nominal bonds, equities and real assets
• Currency exposure distinguished between transaction, translation and economic effects
• Scenario analysis links recession, stagflation and growth shocks to portfolios
• Top-down assumptions documented with sources, dates and decision implications

Participants can design an asset-allocation approach consistent with investment objectives and portfolio constraints.

• Mean-variance optimisation concepts balance expected return against portfolio variance
• Strategic asset allocation set from objectives, capital-market assumptions and constraints
• Efficient frontier limitations considered under estimation error and non-normal returns
• Rebalancing bands defined using target weights, transaction costs and tax effects
• Liquidity buckets matched to forecast cash calls and benefit payments
• Risk budgeting allocates tracking error across asset classes and managers
• Asset-liability matching aligns duration and cash flows with future obligations

Participants can evaluate equity investments using financial analysis, valuation methods and portfolio context.

• Equity return drivers separated into earnings growth, dividends and valuation change
• Financial statements analysed for revenue quality, margins, cash conversion and debt
• Discounted cash flow valuation estimates enterprise value from forecast free cash flows
• Comparable-company multiples selected using business model, growth and capital structure
• Price-to-earnings, EV/EBITDA and price-to-book ratios interpreted with limitations
• Fundamental, factor and passive equity approaches compared against stated mandates
• Active manager skill distinguished from factor exposures and benchmark tilts

Participants can assess bond returns, interest-rate exposure and credit risk within a fixed-income portfolio.

• Bond prices related inversely to yields through present-value cash-flow mathematics
• Duration and convexity estimate price sensitivity to parallel yield changes
• Credit spreads decomposed into default risk, liquidity premium and risk appetite
• Yield-to-maturity limitations identified for callable, floating-rate and distressed bonds
• Government, investment-grade, high-yield and emerging-market debt compared by risk
• Key-rate duration reveals exposure to non-parallel yield-curve movements
• Fixed-income mandates matched to income, liability and capital-preservation objectives

Participants can compare alternative assets and derivative strategies against liquidity, valuation and risk constraints.

• Private equity, real estate, infrastructure and hedge funds compared
• Illiquidity premium evaluated against lock-ups, capital calls and valuation lags
• Commodity exposure assessed through futures curves, collateral returns and roll yield
• Currency hedging choices evaluated using forward contracts and hedge ratios
• Derivatives distinguished by underlying exposure, payoff profile, margin and counterparty risk
• Notional exposure, commitment exposure and economic exposure reported consistently
• Alternative allocation limits set through governance, liquidity and valuation controls

Participants can translate portfolio views into investable positions, controls and efficient trade decisions.

• Portfolio constraints translated into security weights, ranges and implementation rules
• Benchmark choice aligned with mandate objectives, investable universe and risk limits
• Passive replication methods compared: full replication, sampling and optimisation
• Active positions expressed as active weights, factor tilts and tracking error
• Transaction-cost analysis incorporates spreads, commissions, market impact and opportunity cost
• Trade orders selected using market, limit, stop and algorithmic instructions
• Best-execution evidence documented through broker review and post-trade analysis

Participants can identify investment risks, monitor limits and escalate mandate breaches appropriately.

• Market, credit, liquidity, operational and counterparty risks mapped to controls
• Value at Risk interpreted alongside stress testing and expected shortfall
• Stress scenarios quantify drawdowns from rate shocks, defaults and currency moves
• Risk limits monitored through concentration, liquidity, duration and tracking-error thresholds
• Derivative collateral, margin calls and counterparty exposure controlled daily
• Compliance checks test mandate restrictions, prohibited assets and approval limits
• Escalation protocols assign breach ownership, remediation deadlines and committee reporting

Participants can explain portfolio outcomes through attribution analysis and decision-focused reporting.

• Performance attribution separates allocation, selection and interaction effects
• Brinson attribution applied to equity portfolios against policy benchmarks
• Fixed-income attribution distinguishes duration, curve, spread and security effects
• Performance fees examined against high-water marks, hurdles and crystallisation terms
• GIPS principles considered when presenting composite performance and disclosures
• Client reports connect returns, risks, changes and mandate compliance
• Personal application plan prioritises portfolio reporting and control improvements