This 8-hour course aims to equip private bankers with the right risk management tools and strategies to better manage clients’ investment portfolio in the events of market dislocation and volatility.

• Relationship managers and senior relationship managers in private banks
• Covered persons under Private Banking Code of Conduct

• Understand the impact of financial market dislocations and volatility on investments
• Apply the best practices to manage investments and navigate market turbulence
• Ability to use common strategies to manage client portfolio in scenarios of extreme market volatility
• Adopt best practices of reducing excessive exposure, reducing leverage and financing when growth prospects become less certain
• Recommend decisions to cut losses and switch into safer and more defensive investments where appropriate
• Client management during market dislocations
• Recognise indicators of impending financial crises and market bubbles
• Learning the lessons learnt from previous financial crisis

What is Market Turbulence?

• What is market turbulence?
• Impacts on securities/products
• Benefits of hedging tail risks
• Different types of market turbulence

Best Practices to Manage Market Turbulence

Active Diversification

• Tools for active diversification
• High quality government bonds
• Gold
• Low beta equity
• Hedge funds
• Tail risk ETFs

Hedging Equity Portfolio in Market Turbulence

• Put options
• FX options
• Credit strategies
• VIX Futures
• ETNs on VIX
• Variance swaps

Hedging Bonds in Market Turbulence

• Reduce duration by swapping bonds
• Duration-hedging strategy
• CDS/CDX
• VIX

Hedging Currency Risk in Market Turbulence

• 4 dimensions of managing currency risk
• Common FX hedging instruments

Portfolio Hedging Process

Leverage/Financing in Market Turbulence

• Leverage/financing
• Adjusting leverage

Cutting Losses and Switching Investments

• Cutting losses
• Switching investments
• Managing the hedge

Managing Clients During Market Turbulence

After the Storm

Lessons Learned from Past Crises

• Fundamental indicators of impending crises
• Market indicators of impending crises
• Lessons learned from previous crises
• A tail event plan before the tail event
• Summary

Assessment - MCQ