CFA level 3 IPS GFEDU

CFA Level IPS Writing 讲师：吴轶 CFA FRM CQF CISI 日期：2010年5月 地点： ■上海 上海金程国际金融专修学院 Essay writing in level Essay writing in CFA level ƒ Part Introduction to essay writing ƒ Part ƒ Part ƒ Part ƒ Part 专业来自百分百的投入 Individual IPS writing Institution IPS writing Beyond the IPS writing Conclusions Copyright 2010 By GFEDU Introduction to essay writing Part zBehavioral Finance zIndividual Portfolio IPS zInstitutional Portfolio IPS zAsset Allocation zExecution zMonitoring & rebalancing zEvaluation & attribution Portfolio Management and Wealth Planning (55%-65%) Part Topic Area Weights for the CFA Exam for Level Ⅲ Ethical and Professional Standards (total) ( 0, as a part of TIA •Net CF from T1 < 0, as the liquidity needs 专业来自百分百的投入 Copyright 2010 By GFEDU 11 Investor 1’s IPS - ƒ Cash flow analysis … Time T0 T1 Salary P P * (1+f) Trust / Inheritance N P+N P * (1+f) P*t P * (1+f) * t Living expense Q Q * (1+f) Down payment M Mortgage payment MG Donation D Other one-time need T Total outflow P*t+Q+M+D+T P * (1+f) * t + Q * (1+f) + MG Net cash flow Total in – Total out Total in – Total out Inflow Total inflow Outflow Tax 专业来自百分百的投入 Copyright 2010 By GFEDU 12 Investor 1’s IPS - ƒ Return Calculation … • Personal investor •TIA •Current portfolio’s value •Net CF in at T0 •Excluding the house and other unavailable Inheritance •Real Return Rr = − Net CFs at T1 TIA •Nominal Return Rf = − 专业来自百分百的投入 Net CFs at T1 +f TIA Copyright 2010 By GFEDU 13 Investor 1’s IPS - ƒ Risk … • Personal investor •Ability - 2i •They have a long time horizon •They are young, with more human capital •They may get inheritance in future •Their job and income are secure •Their health insurance is provided •Ability - 2d •After-tax salary can not cover living expense •Sustained Cash flows (Mortgage) must be paid •Asset base is small •Other uncertainties •Willingness •Based on “……” in the case •Overall •The narrow one dominants 专业来自百分百的投入 Copyright 2010 By GFEDU 14 Investor 1’s IPS - ƒ Investment constraints … Liquidity ¾The A need portfolio to provide B for next year’s C ¾ A: Name B: Money C: Use (Mortgage pay) Time horizon ¾They have a long term two – stage horizon ¾In the 1st stage, the A must pay B , and also pay C for their D ¾In the 2ed stage, they are in retirement, E years from now ¾ A: Name B: Living expense, mortgage payment … ¾ C: Education fee / health care fee D: Children / parents ¾ E: How many years from now (30) 专业来自百分百的投入 Copyright 2010 By GFEDU 15 Investor 1’s IPS - ƒ Investment constraints … Tax ¾The tax rate is … , the tax aspect should be considered ¾ The … ‘s tax treatment is uncertain, they need a legal counsel Regulations ¾The prudent investor rule is applied ¾The … need a legal counsel to create a trust to … Unique ¾The … say they not want to invest in … ¾The … want to create a trust to care for … ¾The … want to donate … to local charity 专业来自百分百的投入 Copyright 2010 By GFEDU 16 Investor 1’s IPS - ƒ Renew objectives Main issue: Renew return objective close to retirement a Re-calculate the net CF need annually → PMT b Re-calculate the asset base now → PV c Calculate the target asset value when retire → FV d Calculate the required rate of return → I/Y New objectives: Support living expense in retirement Support donating money to charity Provide inheritance for children 专业来自百分百的投入 Copyright 2010 By GFEDU 17 Investor 1’s IPS - 10 ƒ Case analysis Case – 2008 CFA level morning session Q1 Case – 2009 CFA level practice volume Exam morning session Q1 Case - 2002 CFA level morning session Q5 专业来自百分百的投入 Copyright 2010 By GFEDU 18 ... Copyright 2010 By GFEDU 17 Investor 1’s IPS - 10 ƒ Case analysis Case – 2008 CFA level morning session Q1 Case – 2009 CFA level practice volume Exam morning session Q1 Case - 2002 CFA level morning...Essay writing in level Essay writing in CFA level ƒ Part Introduction to essay writing ƒ Part ƒ Part ƒ Part ƒ Part 专业来自百分百的投入 Individual IPS writing Institution IPS writing Beyond the IPS writing... GFEDU Overview ¾Investor 1’s IPS writing ¾Investor 2’s IPS writing 专业来自百分百的投入 Copyright 2010 By GFEDU steps to formulate individual’s IPS ƒ steps to formulate personal IPS Investors classify Cash