WAM Pilot Programme

Portfolio Management: How Roboadvisors Apply Modern Portfolio Theory


The content covered in this course includes:

  • Why do Roboadvisors exists? An overview of why most investors achieve returns less than a static benchmark portfolio. (An introduction to Behavior Finance).
  • The building blocks of any portfolio management process: Estimating the expected Risk & Reward of various asset classes.
  • What is Correlation and why does it matter with an investment portfolio
  • Utility theory and how it can be applied in practice
  • What is a portfolio’s Beta?
  • Define and show practical examples of the Capital Asset Pricing Model (CAPM).
  • We define the market’s Efficient Frontier which becomes our “Model Portfolios”
  • Defining our Asset Allocation
    - What specific securities do we select?
    - When do we rebalance the portfolio?
  • ETF’s: a review and practical application within a portfolio.
  • Putting the pieces together in practice: a Roboadvisors example
  • Strategic vs Active asset allocation (Passive vs Active)
  • Measuring risk adjusted returns of a portfolio.
  • Breaking down the portfolio’s returns? Measuring the portfolio’s attributions.
  • Smart Beta and Factor Investing, Becoming a “Smarter Passive Investor”