Portfolio managers must generate alpha in order to maintain a competitive advantage. Effective asset allocation, asset selection, and a robust portfolio rebalancing method can contribute to performance. However, determining the performance of a portfolio can be challenging due to its reliance on assumptions and expectations regarding the identified macro trend. While the trends may be accurately recognized, the portfolio’s actual results may not align with the anticipated performance due to cyclical patterns.
Fundamental valuation methods like DDM, DCF, and RIM can significantly improve the accuracy of asset selection. However, constructing a portfolio solely based on intrinsic valuation methods is not practical because there is often a disconnect between intrinsic values and market values. As a result, valuation analysis may result in short trades or no trades at all, leading to underperforming benchmarks.
Dr. Gandevani will present three effective techniques at the 2024 annual conference of the Academy of Certified Portfolio Managers (ACPM) that can accurately determine asset prices and increase the likelihood of outperforming portfolio benchmarks. These techniques can help portfolio managers maximize alpha for their investment portfolios. Dr. Gandevani will also discuss the impact of strategies for entering, holding, exiting positions, and how they can significantly influence portfolio performance.
Learning Objectives
1. Understand the importance of generating alpha for maintaining a competitive advantage in portfolio management.
2. Identify the key components of effective portfolio management, including asset allocation, asset selection, and portfolio rebalancing.
3. Recognize the challenges associated with determining portfolio performance, including reliance on assumptions and expectations regarding macro trends.
4. Evaluate the role of fundamental valuation methods such as DDM, DCF, and RIM in improving asset selection accuracy.
5. Assess the limitations of constructing a portfolio solely based on intrinsic valuation methods and understand the potential impact on portfolio performance.
6. Explore three effective techniques for accurately determining asset prices and increasing the likelihood of outperforming portfolio benchmarks.
7. Understand the significance of strategies for entering, holding, and exiting positions in influencing portfolio performance.
8. Gain insights into maximizing alpha for investment portfolios through the application of presented techniques and strategies.
The annual conference of the Academy of Certified Portfolio Managers (ACPM) August 1, 2024
