European Institute of Management and Finance | Investment Analysis and Risk
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Investment Analysis and Risk

Investment Analysis and Risk


The main focus of the course is to understand risk and performance analysis. Several key risk metrics such as volatility and correlation will be covered, as well as examining the various related performance metrics, including different measures of risk-adjusted return. Furthermore, the programme will consider the impact on investment strategies of using the various risk and performance metrics.



Training Objectives


By the end of the programme participants will be able to comprehend:


  • The key features of the main asset classes and the Equity Risk Premium
  • The impact of risk appetite and investment horizon on asset class choice
  • The so-called ‘agency’ problem that the standard fee structure brings
  • The different types of fund manager, hedge funds, etc. and how they differ
  • Standard risk metrics such as volatility and correlation, their use in the Capital Asset Pricing Model and its drawbacks
  • What beta and alpha are, and the various risk-adjusted performance metrics that use them
  • The impact on ‘bottom up’ selection of standard risk and performance metrics
  • Whether and how it is possible to avoid crashes
  • Equity investment styles – Value, Growth – and factor-investing – momentum, etc. and smart beta
  • Environmental, Social and Governance (ESG) investment, Behavioural finance



Training Outline


  • The challenge of consistently achieving top quartile performance and the Efficient Markets Hypothesis
  • The main asset classes – equities, bonds, property, alternative – and their key features
  • A review of the key performance metrics of individual equities – Price Earnings Ratio, etc.
  • A review of Fixed Income fundamentals – a bond’s key features, yield as a discount rate, the yield-price relationship, why yields change, yield curves, etc., the impact of Quantitative Easing (QE)
  • The Equity Risk Premium and how it varies
  • Property – how pricing fundamentals are driven by occupancy and capitalisation rates
  • How the choice of asset class is affected by risk appetite and investment horizon
  • The relevance of interest rates to equity valuation
  • The range of investment managers – long-only, hedge funds, etc. – how and why they vary
  • Shorting and how it is done
  • Indices and the typical free float market capitalisation
  • ‘Closet indexing’ and the regulatory challenge
  • Risk metrics, e.g. volatility and correlation, their uses and drawbacks, the VIX
  • Beta and alpha and risk-adjusted performance measures
  • How risk and performance metrics can affect the asset selection process
  • Examples of successful active manager strategies
  • The challenge of scale
  • Can crashes be avoided? g. Shiller’s Cyclically Adjusted PE ratio, inverted yield curves, etc.
  • The impact of the reversal of Quantitative Easing (QE)
  • Styles – Value v Growth, factors – small cap, momentum, smart beta, quant investing
  • Compliance
  • ESG investment, Behavioural finance and the impact of Artificial Intelligence (AI)



Training Style


Through presentations, spreadsheet exercises and case studies participants will be able to understand and apply what they have learnt upon their return to the workplace.  Interaction, questions and answers will be encouraged throughout the programme.



Who Should Attend


The programme will greatly benefit:


  • Investment analysts
  • Investment managers
  • Investment sales staff
  • Risk and compliance staff
  • Supervisor staff
  • Investors