CORPFIN 3501 - Portfolio Theory & Management III

North Terrace Campus - Semester 1 - 2017

This course is an in-depth study of the funds management theory and practice. Participants will first develop a strong theoretical knowledge of asset pricing, market efficiency and funds management. Students will then be exposed to the managed funds industry and be required to apply their theoretical knowledge to understand the process of developing, managing and evaluating these assets. In addition, students will practically develop an Investment Policy Statement (or a Statement of Advice) for an investor, forecast characteristics of various asset classes in an economy, and be able to create an investment vehicle to satisfy investors' needs. The students will also learn various strategies to manage funds, issues that impact performance, and issues in benchmarking and performance evaluation. Equities, Fixed Income Securities, Commodities, Real Estate, Alternate Funds, Emerging, Developing and Developed markets will be examined in the context of portfolio construction.

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Course Details

Course Code	CORPFIN 3501
Course	Portfolio Theory & Management III
Coordinating Unit	Adelaide Business School
Term	Semester 1
Level	Undergraduate
Location/s	North Terrace Campus
Units	3
Contact	Up to 3 hours per week
Available for Study Abroad and Exchange	Y
Prerequisites	CORPFIN 2502
Assumed Knowledge	SACE Stage 2 Mathematical Studies
Assessment	Exam/assignments/tests/SGDE as prescribed at first lecture

Course Staff

Course Coordinator: Dr Syed Zamin Ali

Course Timetable

The full timetable of all activities for this course can be accessed from Course Planner.

Course Learning Outcomes

On successful completion of this course, students will be able to:

1. Explain Modern Portfolio Theory and the Mean-Variance Framework.

2. Analyse core asset classes based on their characteristics and performance in different economic and business cycles.

3. Identify the characteristics of alternative Investments, and their relationship with core asset classes, in a portfolio context.

4. Compare active and passive investment strategies, and their associate benefits and costs.

5. Evaluate any existing (or proposed) investments using both quantitative and qualitative methodologies

University Graduate Attributes

This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

University Graduate Attribute	Course Learning Outcome(s)
Deep discipline knowledge informed and infused by cutting edge research, scaffolded throughout their program of studies acquired from personal interaction with research active educators, from year 1 accredited or validated against national or international standards (for relevant programs)	All
Critical thinking and problem solving steeped in research methods and rigor based on empirical evidence and the scientific approach to knowledge development demonstrated through appropriate and relevant assessment	All
Teamwork and communication skills developed from, with, and via the SGDE honed through assessment and practice throughout the program of studies encouraged and valued in all aspects of learning	All
Career and leadership readiness technology savvy professional and, where relevant, fully accredited forward thinking and well informed tested and validated by work based experiences	All
Intercultural and ethical competency adept at operating in other cultures comfortable with different nationalities and social contexts able to determine and contribute to desirable social outcomes demonstrated by study abroad or with an understanding of indigenous knowledges	All
Self-awareness and emotional intelligence a capacity for self-reflection and a willingness to engage in self-appraisal open to objective and constructive feedback from supervisors and peers able to negotiate difficult social situations, defuse conflict and engage positively in purposeful debate	All

Learning Resources

Required Resources

Running Money: Professional Portfolio Management
by Stewart, S. D., Prios, C. D., and J. C. Heisler, 1st Edition, published by McGraw-Hill

Other readings from academic, semi-professional and professional sources.

Recommended Resources

“Investments”, 10th ed. (other editions, incl. international ones, are fine), by Zvi Bodie and Alex Kane and Alan Marcus.

Students are encouraged to stay abreast of global financial issues. The Australian Financial Review and finance commentary on the ABC network are an excellent source of current financial news and should be referred to on a regular basis. The internet is also abundantly populated with all aspects of this course, and should be used as well.

Online Learning

Discussion board will be the primary source of interface between students and the academic staff.

Lecture material such as presentation, articles, tutorial questions and lecture recording will be available on MyUni.
Learning & Teaching Activities

Learning & Teaching Modes

The approach in this course is to first establish the theoretical foundations and then to build upon these to understand portfolio construction, implementation and management for an investor. This will be done through lectures, tutorials, a test, individual and group assignment, and a final examination.

This course will also feature Small Group Discovery Experience (SGDE) within tutorials to help enrich students' learning and research experience.

Workload

The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

The University expects full-time students (i.e. those taking 12 units per semester) to devote a total of 48 hours per week to their studies. This means that you are expected to commit approximately 9 hours for a three-unit course or 13 hours for a four-unit course, of private study outside of your regular classes.

Students in this course are expected to attend all lectures throughout the semester plus one tutorial class each week.

Learning Activities Summary

Week 1: Introduction

Week 2: Client Objectives for a Diversified Portfolio

Week 3: Asset Allocation - Mean Variance Framework

Week 4: Equity Investing

Week 5: Fixed Income Investing

Week 6: Practical Asset Allocation and Stress Testing

Week 7: Global Investing

Week 8: Alternative Investment Classes

Week 9: The Investment Management process

Week 10: Portfolio Management through Time

Week 11: Performance Measurement

Week 12: Review

Small Group Discovery Experience

This course features Small Group Discovery Experience. Each student group, guided by their tutors and the lecturer, will create a rigorously tested portfolio for an institutional endowment fund. The group, consisting of 4 students (maximum), will apply their knowledge gained from the first part of the course (weeks 1-6) to embark on the SGDE over the following 5 weeks (weeks 7-11).

Each group will select an Endowment Fund for a US University that has its current (not earlier than 2014) Investment Policy Statement (IPS) available online.

The SGDE will lead the cohort through the following 5 steps:

1.      Define the Endowment’s investment Objectives and Constraints.

2.      Stress-test the current asset allocation for Endowment Fund using appropriate index benchmarks, and provide a critique of the asset allocation based on the investment objectives of the Endowment.

3.      Research one Alternative Investment (Real Estate Investment Trusts, Hedge Funds, Commodities, Private Equity Funds, and Venture Capital Funds) in terms of its risk and return characteristics, as well as its relationship with the core asset classes (Equities and Fixed Income Securities). This Alternative Investment will play an important role for the next step.

4.      Use the Mean Variance (MV) framework to create a new asset allocation using ONLY core asset classes and the Alternative Investments (researched in step 3 above) for the Endowment Fund using only historical index data (will be provided).

5.      Provide recommendations to the Board regarding any changes to the asset allocation

Each group is required to hold informal consult with tutor(s) during weeks 5-8 AND a final group-based formal consult with the lecturer during weeks 7-10, and submit a final group report. Further details will be provided on MyUni/Canvas.

The University's policy on Assessment for Coursework Programs is based on the following four principles:

Assessment must encourage and reinforce learning.
Assessment must enable robust and fair judgements about student performance.
Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
Assessment must maintain academic standards.

Assessment Summary

Assessment	Weighting	Due Date	Course Learning Outcome
Test	20%	Week 6	1 & 2
Individual SGDE related submission and consult	10%	Week 5-8	All
Group Assignment	20%	Week 8	All
Final Examination	50%	Exam Period	All

Assessment Related Requirements

Tests and Final/Replacement examination will be closed book (no reference material allowed).

Assessments from previous semester(s) cannot be redeemed.

Assessment Detail

The assessment components are as follows:

· (20%) Test: 50 minute test. Multiple Choice Questions. This is a closed book test

· (10%) SGDE related Individual Progress Report

. (20%) SGDE related Group assignment

· (50%) Final/Replacement Exam: 3 hours exam as per examination schedule. These are closed book examination

Submission

Further details will be provided on MyUni.

Course Grading

Grades for your performance in this course will be awarded in accordance with the following scheme:

M10 (Coursework Mark Scheme)
Grade	Mark	Description
FNS		Fail No Submission
F	1-49	Fail
P	50-64	Pass
C	65-74	Credit
D	75-84	Distinction
HD	85-100	High Distinction
CN		Continuing
NFE		No Formal Examination
RP		Result Pending

Further details of the grades/results can be obtained from Examinations.

Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

Final results for this course will be made available through Access Adelaide.

Student Feedback

The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.
Student Support
Policies & Guidelines
This section contains links to relevant assessment-related policies and guidelines - all university policies.
Fraud Awareness

Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

The University of Adelaide is committed to regular reviews of the courses and programs it offers to students. The University of Adelaide therefore reserves the right to discontinue or vary programs and courses without notice. Please read the important information contained in the disclaimer.

Authorised by:	Deputy Vice-Chancellor and Vice-President (Academic)
Maintained by:	Course Outlines Administrator