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This 4-hour course aims to equip private bankers with the simple risk management tools and strategies to better manage clients’ investment portfolio in the events of market dislocation and volatility.

Target Audience

  • Relationship managers and investment advisors in private banks
  • Covered persons under Private Banking Code of Conduct

Course Outline

Part 1

  • What is market turbulence?
  • Different types of market turbulence
    • Lehman crisis
    • Covid crisis
    • Speculative bubbles
    • Quantitative tightening
  • Impacts on different asset classes and types of securities/products
  • Benefits of hedging tail risks
    • The concept of dynamic correlation studies
    • The concept of risk-adjusted return (Sharpe and Treynor Ratios)
    • Concept of diversification (risk-based portfolio allocation)

Part 2

  • Indexing as a form of benchmarking portfolios to manage risk
    • What is Exchange Traded Funds (ETFs)?
    • Main types of Equities ETFs and Fixed Income ETFs
    • The concept of risk-reward vs. liquidity premium
    • Categorising risk through ETFs:
      • Equities: volatility risk or company risk
        • Big caps vs. small caps (technology and brick & mortar stocks)
        • Growth stocks vs. defensive stocks
        • Consumer discretionary vs. consumer staples
      • Fixed income: duration risk & default risk
        • US High Yield vs. US High Grade
        • Asian bonds vs. Asian Equities vs. EM bonds
        • Long or shorter duration bonds
        • The fear gauge and flight to quality indicators
        • Putting it all together for decision making using the KISS Investment concept
  • Introduction to managing risks through
    • Derivatives (puts and calls)
    • Diversification (within or across asset classes)
    • Cash Management

Part 3

  • Rotational play concepts (equities, bonds and HFs) and indicators to look out for
  • The concept of leveraging. Is it good or bad?
  • Staying in the investment game for longer term returns (lady luck or risk management)
  • Misleading concepts of trying to beat the market
  • Practical application examples (Q&A)
  • Basic technicals and fundamentals combined