The fundamental aspect of Portfolio of Securities
Over the last several years, bank investment portfolio management has become increasingly more important — and considerably more challenging. Given the current environment, investment portfolios as a percentage of total assets, have grown. Good credits/loans have been far more elusive – an effect with roots that reach back to the financial crisis. A portfolio investment is a hands-off or passive investment of securities in a portfolio, and it is made with the expectation of earning a return. In addition, the need to manage a portfolio with broader Assets /Liabilities Management (ALM) objectives in mind is always essential.
Adding to this, regulatory capital requirements and dramatically increased regulatory scrutiny have led to more conservatism in bank portfolios — including increased attention to enterprise risk management. The result is that the returns generated from bank investment portfolios are more material to banks non-interest income, and banks need to get more out of the investments, not in “safe” instruments, such as Treasuries. Throw in the current low-interest rate environment and a likely imminent rise in rates, and success becomes ever more difficult. Portfolio investments can width a wide range of asset classes such as stocks, government bonds, corporate bonds, Treasury bills, real estate investment trusts
In addition to a quick overview of portfolio management, this program will provide an understanding and analysis of specific investment instruments and the current fixed income/debt capital markets, as well as recent developments in the/industry, including regulatory changes. Last, but certainly not least, you will gain a wealth of ideas for optimizing your portfolio structure and returns (e.g., maximizing risk-adjusted returns).
- Understand the influence the Treasury and swap curves have on fixed income markets
- Identify and understand the essential, elements of bank investment portfolio management.
- Learn how to quantify risk using duration and convexity Metrics.
- Connect the investment portfolio to IRR management.
- Formulate/articulate an investment policy that meets your bank’s strategic goals and risk appetite.
- Identify and learn from the common themes of high performing portfolios.
- Understand how regulations and accounting standards impact investment portfolio management.
- Gain a historical view of municipal credit to inform your understanding of its role in today’s market and your portfolio
- Review analytical tools commonly used on Bloomberg.
- Review successful strategies and learn how they can be used to improve your portfolio’s risk-adjusted returns.
