Asset Management Portfolio

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Asset Management Portfolio

  1. 1. ASSET MANAGEMENT PORTFOLIO ASSET MANAGEMENT PORTFOLIOSTRAINING SESSION FOR DEPT. OF FOREIGN INVESTMENTS<br />VENUE: TIIB – HEAD OFFICE <br />QUANTITATIVE RISK ANALYTICS DESK <br />SYED ADEEL HUSSAIN<br />
  2. 2. <ul><li>Asset Management (proprietary funds) portfolio of TIIB consists of the following:
  3. 3. Equity Securities – Common Stocks
  4. 4. Fixed Income Securities - Sukuks
  5. 5. Equity Mutual Funds - TEF (Tadhamon Equity Fund )
  6. 6. REITS – Real Estate Funds </li></li></ul><li> Foreign Investments Dept. Analyst analyzes the Portfolio underlying investments using either : <br />Top Down Approach<br />Bottom Up <br />Approach<br />
  7. 7. <ul><li>Stages of Investment Portfolio Management
  8. 8. Investment Screening
  9. 9. Investment Selection
  10. 10. Investment Allocation
  11. 11. Investment Trading and Market Timing
  12. 12. Investment Performance & Risk Review
  13. 13. Investment Portfolio Rebalancing</li></li></ul><li><ul><li>Screening and Selection (Bottom Up Approach)
  14. 14. Expected Return and Risk Analysis of the Investment
  15. 15. Issuer/ Firm Specific Risk and Profile
  16. 16. Business Model Evaluation and Outlook
  17. 17. Industry Outlook
  18. 18. Macroeconomic Outlook</li></li></ul><li><ul><li>Screening and Selection (Top Down Approach)
  19. 19. Macroeconomic Outlook
  20. 20. Industry Outlook
  21. 21. Business Model Evaluation and Outlook
  22. 22. Firm and Issuer Specific Analysis
  23. 23. Expected Return and Risk Analysis of the Investment </li></li></ul><li><ul><li> Allocation of Portfolio Investments
  24. 24. Allocation always follows selection
  25. 25. Allocation should be made to the portfolio based on factors such as:
  26. 26. Portfolio’s Market Risk to Reward Ratio
  27. 27. Expected returns of the portfolio
  28. 28. Correlation between assets
  29. 29. Overall Diversification of Portfolio
  30. 30. Weighted Cost of Funds Analysis
  31. 31. Assign Final Weightage (Relative and Absolute)</li></li></ul><li><ul><li>Portfolio Investments Trading :
  32. 32. Upside Momentum Driven Trading (buying & selling during market rallying periods)
  33. 33. Bottom Fishing (buying & selling assets during or after market crash)
  34. 34. Range Bound Trading (buying & selling at regular normal price intervals)</li></li></ul><li><ul><li>Portfolio Investment Style :
  35. 35. Active vs. Passive Portfolio Management
  36. 36. Active Management is done by fund managers to outperform the benchmarks and their peers in the industry
  37. 37. Passive Management is simply buy and hold strategy implemented by tracking benchmark returns</li></li></ul><li><ul><li>Portfolio Investments Performance and Risk Reviews :
  38. 38. All analysts’ should conduct outstanding position analysis within each portfolios expressed in percentages in relation to:</li></ul> Tier 1 capital <br /> Paid Up Capital <br />ii. Total Assets <br /> Total Capital Employed <br /> Total Investments <br /><ul><li>Time Value of Money adjusted Returns should be calculated using IRR and NPV techniques
  39. 39. Compliance with all Internally approved and external regulatory procedures and policies should be check listed
  40. 40. Prepare reports with recommendations to buy , hold or sell</li></li></ul><li><ul><li>Portfolio Investments Rebalancing
  41. 41. An Actively Managed portfolio should be rebalanced as per targeted strategy
  42. 42. A Passively Managed Portfolio should not be frequently rebalanced
  43. 43. Trading costs and benefits should be analyzed at the time of increasing portfolio turnover ratio
  44. 44. An analyst should continuously trigger rebalancing only within the framework of universe of investments
  45. 45. Actual and Budgeted targets should be studied . Variances , if any , should be calculated and minimized accordingly.</li>

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