tailieunhanh - Lecture Investments: Principles of portfolio and equity analysis: Chapter 4 - CFA Institute

Chapter 4 - Portfolio management: An overview . This chapter provides an explanation of why a portfolio approach is important to all types of investors in achieving their financial goals. A comparison is made of the financial needs of different types of individual and institutional investors. An outline is provided for the steps in the portfolio management process. The chapter concludes with a discussion of the types of investment management products that are available to investors and how they apply to the portfolio approach. | Chapter 4 Portfolio Management: An Overview Presenter Venue Date This chapter provides an explanation of why a portfolio approach is important to all types of investors in achieving their financial goals. A comparison is made of the financial needs of different types of individual and institutional investors. An outline is provided for the steps in the portfolio management process. The chapter concludes with a discussion of the types of investment management products that are available to investors and how they apply to the portfolio approach. DISCLAIMER: Candidates should understand that this presentation is NOT a substitute for a thorough understanding of the CFA Program curriculum. This presentation is also NOT necessarily a reflection of all the knowledge and skills needed for candidates to successfully complete questions regarding this topic area on the CFA exam. 1 The Portfolio Perspective Evaluate in isolation? Evaluate as a portfolio? LOS: Explain the importance of the . | Chapter 4 Portfolio Management: An Overview Presenter Venue Date This chapter provides an explanation of why a portfolio approach is important to all types of investors in achieving their financial goals. A comparison is made of the financial needs of different types of individual and institutional investors. An outline is provided for the steps in the portfolio management process. The chapter concludes with a discussion of the types of investment management products that are available to investors and how they apply to the portfolio approach. DISCLAIMER: Candidates should understand that this presentation is NOT a substitute for a thorough understanding of the CFA Program curriculum. This presentation is also NOT necessarily a reflection of all the knowledge and skills needed for candidates to successfully complete questions regarding this topic area on the CFA exam. 1 The Portfolio Perspective Evaluate in isolation? Evaluate as a portfolio? LOS: Explain the importance of the portfolio perspective. Pages 140-142 The “portfolio approach” means evaluating individual securities in relation to their contribution to the investment characteristics of the whole portfolio, rather than in isolation. 2 EXHIBIT 4-3 Cumulative Wealth Index of Sample of Shares Listed on HKSE Source: Datastream LOS: Explain the importance of the portfolio perspective. Page 143 Cumulative returns from Q2 2004 through Q2 2008 for five companies listed on the Hong Kong Stock Exchange (HKSE) are shown in Exhibit 4-3. 3 Yue Yuen Industrial Cathay Pacific Airways Hutchinson Whampoa Li & Fung COSCO Pacific Equally Weighted Portfolio Mean annual return Annual standard deviation Mean annual return, randomly selected security = Annual standard deviation, randomly selected security = Diversification ratio = ÷ ≈ 71% Source: Datastream EXHIBIT 4-4 The Importance of the Portfolio Perspective LOS: Explain the .