Handbook

This course covers advanced topics in investments and active funds management. Namely : 1) equity valuation; 2) alternative investment classes; and 3) portfolio performance measurement and management.

The equity valuation part covers security analysis based on discounted cash flow analysis. The second part covers investments in asset classes other than bonds and currencies. These so-called alternative assets have acquired increasing relevance for institutional investors such as endowments, pension and sovereign wealth funds. They include real estate, private equity, commodities, currencies, and hedge fund strategies. To the extent these are exposed to different risk and rewards than traditional asset classes, they can be useful ways for investors to diversify their risks. The final part focuses on advanced issues of performance measurement for active investors and optimal portfolio management. These include strategies to deal with estimation error in portfolio optimization and methods recently proposed to address this. As a postgraduate level course there is an important emphasis on discussing recent relevant research on each topic.