What Are the Different Types of Fund Management Jobs?
Portfolio management refers to the diversified management of assets by investment managers in accordance with asset selection theory and portfolio theory to achieve the purpose of diversifying risks and improving efficiency.
Portfolio management
(A type of fund management)
Right!
- Portfolio management means
- Modern portfolio theory is mainly composed of portfolio theory, capital asset pricing model, APT model, efficient market theory, and behavioral finance theory. Their development has greatly changed the traditional investment management practices that used to rely primarily on basic analysis.
- The portfolio construction process consists of the following steps:
- First, you need to define the range of securities that are appropriate for your choice. For most planned investors, the focus is on the main asset types of ordinary stocks, bonds and money market instruments. These investors have included alternative stock types such as international stocks and non-US dollar bonds, making investments global in nature. Some investors have also incorporated real estate and venture capital to further broaden the scope of investment. Although the number of asset types is still limited, the number of securities in each asset type can be quite large.
- Second, investors need to ask for the expected value of the potential returns of each security and asset type and the risks they assume. In addition, it is more important to state this estimate clearly in order to compare which of the many securities and asset types are more attractive. The value of an investment portfolio is largely determined by the quality of these selected securities.
- The third stage of the construction process, that is, the actual optimization, must include the selection of various securities and the determination of the weight of each securities in the portfolio. In bringing the various securities together to form the required combination, it is necessary not only to consider the risk-return characteristics of each securities, but also to estimate the interactions that these securities may have over time. The Markowitz model provides a conceptual framework and analytical methods for determining the optimal portfolio in an objective and disciplined manner.
- The concept of portfolio management
- Portfolio management is an activity with the goal of optimizing the overall risk and return of the investment portfolio, selecting the types of securities to be included in the investment portfolio and determining the appropriate weight. It is an investment management method that rises with the development of modern investment theory.
- Fund Portfolio Management Process
- 1. Set investment policies;
- 2. Perform securities analysis;
- 3. Construct investment portfolio;
- 4. Evaluate the effect of the investment portfolio;
- 5. Amend investment portfolio.
- Basic Assumptions of Securities Portfolio Theory
- (1) Investors evaluate individual securities or portfolios by expected rate of return and variance (or standard deviation)
- (2) Investors are unsatisfied and risk-averse
- (3) Investor's investment is a single investment period
- (4) Investors always want to hold an effective asset portfolio.