Lesson 1Investment-grade credit: credit selection, spread sensitivity, yield pickup vs default riskDis section check out investment-grade credit as a core income asset, focusin pon issuer selection, spread an rate sensitivity, default an downgrade risk, an how fi size positions fi boost yield widout weakenin portfolio resilience.
Credit spread drivers and term structureBottom-up issuer and sector selectionDefault, downgrade, and recovery analysisInterest-rate risk and spread durationPosition sizing and diversification rulesLesson 2Guidelines for sizing cash and cash equivalents: buffer sizing, opportunity cost, and real yield considerationsDis section gi guidelines fi size cash an cash equivalents, balancin liquidity needs, opportunity cost, an real yield, an distinguisin between operational cash, strategic dry powder, an collateral requirements.
Operational, strategic, and collateral cashLiquidity buffers and spending policiesOpportunity cost and cash drag analysisReal yield, inflation, and policy ratesInstruments: T-bills, MMFs, and depositsLesson 3Constructing a 100% target allocation example with clear percentage rationale across the five required bucketsDis section walk yu through buildin a full 100% strategic allocation, assignin target weights to cash, bonds, credit, equities, an alternatives, an explainin de rationale usin risk, return, an constraint-based perspectives.
Defining investable buckets and constraintsTranslating objectives into target weightsIllustrative 100% allocation across bucketsChecking risk, drawdown, and liquidityDocumenting rationale and review cadenceLesson 4Framework to set long-term target weights: liability matching, risk budgeting, and return-seeking bucketsDis section present a framework fi set long-term target weights, linkin liability profiles, risk budgets, an return-seekin buckets, an showin how fi integrate regulatory, accountin, an stakeholder constraints.
Mapping liabilities and time horizonsDefining total portfolio risk budgetReturn-seeking vs liability-hedging bucketsRegulatory, accounting, and rating limitsIterative optimization and governanceLesson 5Government bond allocation: duration choice, country mix, inflation-linked bonds, and role in risk-off periodsDis section cover government bond roles in portfolios, includin duration an curve positionin, country an currency choices, inflation-linked bonds, an how sovereigns behave in risk-off episodes an different monetary policy regimes.
Core vs satellite sovereign exposuresDuration targets and curve positioningCountry, currency, and credit quality mixInflation-linked bonds and breakeven analysisRisk-off behavior and crisis performanceLesson 6Principles for conservative institutional allocation in volatile markets (capital preservation, diversification, liquidity)Dis section set principles fi conservative institutional portfolios in volatile markets, emphasizin capital preservation, diversification cross risk drivers, liquidity management, an governance practices dat support disciplined rebalancin.
Capital preservation and drawdown limitsDiversification by asset and risk factorLiquidity tiers and redemption planningRebalancing rules and governanceStress testing and scenario analysisLesson 7Alternatives allocation: real assets (REITs, infrastructure), commodities (gold, energy), hedge strategies (managed futures, long/short equity) and private markets considerations for long horizonDis section detail alternatives as diversifiers an return sources, coverin real assets, commodities, hedge fund-like strategies, an private markets, wid emphasis pon liquidity, valuation, an suitability fi long-horizon investors.
Real assets: REITs and infrastructure rolesCommodities: gold, energy, and inflation hedgingManaged futures and crisis alpha strategiesEquity long/short and relative value approachesPrivate markets, illiquidity, and pacingLesson 8Asset bucket definitions and investment roles: cash, gov’t bonds, investment-grade credit, equities, alternativesDis section define key asset buckets—cash, government bonds, investment-grade credit, equities, an alternatives—an clarify dem primary roles, risk drivers, an interactions widin a diversified strategic allocation.
Cash: liquidity and capital stabilityGovernment bonds: safety and durationInvestment-grade credit: income and spreadEquities: growth and equity risk premiumAlternatives: diversification and alphaLesson 9Equity allocation: regional and style splits (US vs ex-US, value vs quality vs dividend), role for low-volatility and defensive sectorsDis section analyze equity allocation design, includin regional splits, style tilts like value, quality, an dividend, an de role a low-volatility an defensive sectors in stabilizin returns durin market stress.
Regional splits: US, developed ex-US, EMValue, quality, and dividend style tiltsLow-volatility and minimum-variance toolsDefensive sectors and cyclicals balanceImplementation via funds and mandates
