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”