Lesson 1Investment-grade credit: credit selection, spread sensitivity, yield pickup vs default riskThis section looks at investment-grade credit as a key income asset, focusing on picking issuers, spread and rate sensitivity, default and downgrade risks, and sizing positions to boost yield without weakening portfolio strength.
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 considerationsThis section gives guidelines for sizing cash and equivalents, weighing liquidity needs, opportunity costs, and real yields, distinguishing operational cash, strategic reserves, and collateral needs.
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 bucketsThis section walks through a full 100% strategic allocation, setting target weights for cash, bonds, credit, equities, and alternatives, explaining the logic from risk, return, and constraint angles.
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 bucketsThis section offers a framework for long-term target weights, tying liability profiles, risk budgets, and return-seeking groups, integrating regulatory, accounting, and stakeholder limits.
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 periodsThis section covers government bonds' roles, including duration and curve bets, country and currency picks, inflation-linked bonds, and how they act in risk-off times and policy shifts.
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)This section outlines principles for conservative institutional portfolios in volatile times, stressing capital safety, diversification across risks, liquidity handling, and governance for steady rebalancing.
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 horizonThis section details alternatives as diversifiers and return drivers, covering real assets, commodities, hedge-like strategies, and private markets, focusing on liquidity, valuations, and fit for long-term holders.
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, alternativesThis section defines main asset buckets—cash, government bonds, investment-grade credit, equities, alternatives—and their key roles, risk factors, and interplay in a balanced strategic setup.
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 sectorsThis section breaks down equity allocation, including regional splits, style leans like value, quality, dividend, and the part low-vol and defensive sectors play in steadying returns during 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
