Portfolio Construction is a "capstone" core that draws on core investment principles, theories and techniques previously studied. The objective of this course is to introduce students to portfolio construction and asset allocation. It will focus on gaps in theory and how they can be managed in practice. Examples include challenges/realities in estimating and implementing portfolio optimization programs, role of liquidity, and importance of plan governance. Topics will include: types of investors and their objectives; dimensions of risk; asset allocation; the nature and role of various asset classes (equity, fixed income, alternative assets, foreign exchange); building multi-manager portfolios, and implementation issues.

1. Understand and implement portfolio construction at the overall plan level, taking into account investor objectives and the practical challenges of implementation.
2. Appreciate the use and limitations of portfolio theory.
3. Describe the main characteristics of key asset classes, and the role they each play within a portfolio.
4. Communicate complex portfolio structures and strategies.

The assessment for this course is proposed to be made on the following basis:  25% Assignment; 20% Mid-semester examination; 45% Final Examination; 10% Tutorial Engagement.

At least three contact hours per week plus private study time.

At least an average of 65% (or equivalent) in the final two years of an Australian undergraduate degree with at least one year of university level study in quantitative analysis, including basic mathematics and data analysis techniques.

FINM8006 Advanced Investments

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