Manager Selection and Asset Allocation: Practitioner Workshop

Market conditions, asset classes, and the unpredictability of macroeconomic influences are all things that investors must consider when trying to maximize their returns. In addition, the individual investment manager can be a source of (positive or negative) investment return—one that investors must take into consideration when allocating assets.

In a December 2013 book published by the CFA Institute Research Foundation, Scott D. Stewart, CFA, identifies several important factors in investment manager selection, including

• The investment policy statement: A well-drafted statement should include details that help identify whether investment managers match investor needs for such criteria as liquidity and risk tolerance.

• Effective ways to identify skilled active investment managers: In the book, Stewart examines existing techniques used to select active managers and reports on their effectiveness.

• Appropriate investment weights for each manager: Investors need to carefully consider their optimal mix of asset classes, but they also need to minimize risks and optimize returns from investment managers themselves.

• The complexity of the investor’s asset allocation policy: Stewart draws a link between increased complexity and the importance of spending additional time to select a capable investment manager.

In the book, Stewart explores these factors and examines detailed research on manager selection, summarizing key recommendations and including advice from experienced investors, pension consultants, and money managers.

At the Research Foundation Workshop for the Practitioner, held in advance of the 67th CFA Institute Annual Conference in Seattle, Stewart will discuss manager selection and review some of the Excel tools available for mixing and evaluating investment managers.

Following Stewart’s presentation at the workshop, Vasanttilak Naik and Sébastien Page, CFA, will discuss their risk factor approach to making asset allocation decisions with macroeconomic foundations. Naik and Page will look at some of the strategic and tactical considerations they use to set an asset allocation policy. Background reading on risk management beyond asset class diversification, as well as other work by Page, can be found in the online CFA Institute publications library.

Delegates can sign up to attend the Research Foundation Workshop for the Practitioner as part of their registration for the 67th CFA Institute Annual Conference. Follow this blog for additional news and updates as the conference draws closer.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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