Unit 1146: Portfolio Management

1. Introduction to Portfolio Management

• Definition and concept of portfolio management
• Importance of portfolio management in investment strategies
• Objectives of effective portfolio management

2. Asset Allocation Strategies

2.1 Strategic Asset Allocation

• Long-term asset mix decisions
• Role in meeting investment goals

2.2 Tactical Asset Allocation

• Short-to-medium-term adjustments
• Exploiting market opportunities

2.3 Dynamic Asset Allocation

• Continuous portfolio adjustments based on market conditions
• Balancing risk and return dynamically

2.4 Impact of Asset Allocation on Portfolio Performance

3. Risk Management in Portfolios

• Understanding different types of portfolio risks
• Diversification: principles and benefits
• Hedging strategies and instruments
• Asset allocation as a risk mitigation tool

4. Portfolio Construction Techniques

4.1 Modern Portfolio Theory (MPT)

• Efficient frontier and mean-variance optimization
• Risk-return trade-off

4.2 Capital Asset Pricing Model (CAPM)

• Systematic vs. unsystematic risk
• Beta coefficient and expected returns

4.3 Factor-Based Investing

• Common factors (value, size, momentum, quality)
• Multi-factor models for portfolio construction

5. Performance Evaluation and Measurement

• Importance of performance evaluation
• Sharpe Ratio: risk-adjusted return measure
• Treynor Ratio: performance relative to market risk
• Jensen's Alpha: portfolio manager’s value add
• Interpretation and limitations of metrics

6. Rebalancing and Monitoring Portfolios

• Concept and importance of portfolio rebalancing
• Criteria and triggers for rebalancing
• Techniques and frequency
• Monitoring mechanisms and tools

7. Tax Considerations in Portfolio Management

• Impact of taxes on investment returns
• Tax-efficient investing strategies (e.g., tax-loss harvesting)
• Portfolio optimization for minimizing tax liabilities
• Understanding capital gains, dividends, and tax shelters

8. Behavioral Finance in Portfolio Management

• Overview of behavioral biases (overconfidence, loss aversion, herd behavior)
• Emotional influences on investment decisions
• Impact of biases on portfolio management strategies
• Techniques to mitigate behavioral biases

9. Ethical Considerations in Portfolio Management

• Conflicts of interest and fiduciary duties
• Insider trading and regulatory compliance
• Ethical frameworks and codes of conduct
• Importance of ethical behavior in client trust and portfolio outcomes

10. Global Portfolio Management

• Challenges of investing internationally
• Impact of international markets on portfolio diversification
• Currency risk and hedging techniques
• Geopolitical risks and their influence on portfolio performance
• Strategies for navigating global investment landscapes