Course materials for the playlist
Welcome back to FIN423: Security Analysis and Portfolio Management at BRAC Business School!
In Class 2, we dive deep into the crucial first steps of portfolio construction: gathering client information and building a robust Investment Policy Statement (IPS). This lecture transitions from theory to practical application, breaking down how professional managers allocate assets and manage risk based on specific client profiles.
A major focus of this session is practical problem-solving. We walk through comprehensive case studies (Henri Gascon and Jack Gascon) to analyze real-world risk tolerance, calculate required rates of return, and identify the most suitable investment vehicles given strict liquidity and tax constraints.
📌 In This Video, We Cover:
The IPS Breakdown: Defining risk objectives, return objectives, and key constraints (Liquidity, Tax, Time Horizon, Unique Circumstances, Legal/Regulatory).
Asset Allocation: Categorizing investments into Fixed Income, Equity, and Alternatives.
Strategic vs. Tactical: The difference between sticking to your long-term target weights and deviating to exploit short-term capital market expectations.
Security Selection & Risk Budgeting: How to outperform benchmarks and manage idiosyncratic vs. systematic risk.
Portfolio Rebalancing: Striking the balance between maintaining target asset weights and minimizing transaction costs.
Case Study Analysis: * Assessing the high risk ability and willingness of Henri Gascon (Energy Trader).
Analyzing the constrained, low-risk profile of Jack Gascon (Divorced Consultant).
Calculating a client's required rate of return using Future Value and Present Value of retirement savings.