Asset Management and Portfolio Analyst
Portfolio construction, benchmarks and performance attribution.
Role cheat sheet
- NAV per unit
Net fund assets divided by units outstanding. Compare total returns after distributions rather than comparing NAV levels alone.
- Benchmark fit
Match asset class, geography, risk and currency. Use a total-return benchmark when evaluating a total-return portfolio.
- Tracking error
Standard deviation of active returns over a defined period. An index tracker can have low tracking error while retaining market risk.
- Information ratio
Active return divided by tracking error on the same basis. A short sample can make the estimate unstable.
- Attribution
Explain how allocation and security selection contributed to active return. State the methodology and reconcile total effects.
- Diversification and capacity
Review concentrations, liquidity and correlated exposures. Trading costs can change as assets under management grow.
Review the lesson
Practise interview questions
How would you tell whether an equity fund’s outperformance was repeatable?
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