Foundations of Investment Management: Mastering Financial Markets, Asset Classes, and Investment Strategies
by David E. Linton (Author)

About the Author
David E. Linton, CFA, is the Director of Portfolio Construction and Manager Research at Pacific Life Fund Advisors LLC (PLFA). In his current role, he is responsible for the portfolio construction of the USD 32 billion PLFA suite of asset allocation products, and he shares responsibility for the manager research and due diligence for roughly USD 40 billion in sub-advisory relationships. Additionally, David is a member of the PLFA Investment Committee and Asset Allocation group, specializing in fixed income, and he is the lead trader for the USD 1.2 billion Pacific Funds Multi-Asset Fund.

Prior to joining PLFA, Mr. Linton was a Vice President and Portfolio Manager at PIMCO. While there, he worked in a variety of capacities and his responsibilities included co-managing PIMCO’s overnight cash investing and financing book on the Short-Term Desk, working as a sovereign credit analyst on the Emerging Markets Desk, and trading investment grade non-financial corporate bonds on the Investment Grade Corporate Desk. David was also a Product Manager and member of the PIMCO Solutions group with a focus on Tail Risk Hedging.

Mr. Linton is a CFA® charterholder, has a BS in Business Administration from the University of Southern California, graduating magna cum laude, and an MBA from the University of Chicago Booth School of Business, graduating with honors.

About this Book
Foundations of Investment Management: Mastering Financial Markets, Asset Classes, and Investment Strategies shows how to navigate today’s world of complex financial instruments, investment opportunities, and devastating pitfalls. This reader-friendly guide details stocks, bonds, and alternative investments, who invests in these asset classes, how, and why. It uses real-world examples in addition to citing the latest academic research. Additionally, seven industry experts have co-authored select chapters to greatly expand the depth and utility of this book for the reader. This unique guide is perfect for financial analysts, portfolio managers, client-facing representatives, product specialists, and anybody early in their finance career who wishes to understand how clients, products, and investors relate and interact.

Foundations of Investment Management provides a complete overview of the investment management industry; defines key terms and participants; identifies investment vehicles, strategies, and asset classes; and analyzes each strategy focusing on its relative utility and potential inclusion in a well-diversified portfolio. Despite the subject mater’s complexity, each topic is distilled in a way that is highly relatable and intuitive, ensuring the reader knows how to better manage their investments or interact with clients. Lastly, every chapter closes with a summary and investment implications to maximize the information presented.

Key Features

• Defines various fund structures, discusses the growth of the mutual fund industry, explains the benefits and disadvantages of comingled vehicles and details other investment options including fund of funds, annuities, and separately managed accounts
• Presents detailed descriptions of different institutional investors; elaborates on their investment considerations, objectives, and reaction functions; and concludes with implications for an institutions’ propensity to respond similarly to market developments
• Supplies tools and techniques to construct and optimize a fixed income portfolio
• Reviews the history of the Bank of England and U.S. Federal Reserve and describes central bank objectives, tools, and reaction functions
• Illustrates the difference between investing and speculating by introducing different valuation methods and approaches to developing an investment thesis
• Examines the growth of high frequency trading and identifies rebalancing strategies
• Identifies different stock investment approaches as well as introduces several equity valuation methods
• Describes mean variance optimization and conviction-based portfolio construction approaches
• Reviews bond basics including bond income, interest rate sensitivity, and sources of risk such as credit and liquidity
• Examines the history of real assets, defines each real asset, details the drivers of their return, and explains how an investor may gain exposure to each asset through the utilization of financial instruments or investment vehicles
• Presents the theory behind and history of factors and factor investing from both an academic and practitioner perspective.
• Presents the development of our understanding of behavioral biases, explains how these biases impact investment decisions, and provides tips and techniques to avoid their pitfalls
  

Brief Contents
PART I—Markets, Vehicles, and Participants 1
Chapter 1: Financial Assets and Capital Markets 3
    Financial Assets: Bonds, Stocks, and Derivatives 4
    Capital Market Benefits 24
    Capital Market Risks 26
    Market Efficiency and Capital Market Failures 31
    Summary and Investment Implications 33
    Citations 38
Chapter 2: Investment Vehicles 41
    Mutual Funds 42
    Growth of the Mutual Fund Industry 54
    Benefits of Mutual Funds 57
    Disadvantages of Mutual Funds 59
    Target Risk (Lifestyle) Funds 62
    Target Date Funds 64
    Annuities 66
    Private Investment Companies 68
    Separately Managed Accounts 70
    Summary and Investment Implications 71
    Citations 72
Chapter 3: Institutional Investors 79
    Institutional Investors 80
    Summary and Investment Implications 102
    Citations 104
Chapter 4: Global Central Banks and the Federal Reserve 109
    Brief History of the Bank of England and the Federal Reserve 110
    The Federal Reserve and Other Global Central Banks 112
    Implementing Federal Reserve Policy 118
    Central Bank Transmission Mechanisms 134
    Criticisms of the Federal Reserve 139
    Summary and Investment Implications 143
    Citations 146
PART II—Investing and Portfolio Construction 153
Chapter 5: Investment Strategies 155
    Investing and Speculating 156
    Passive versus Active Investment 165
    Rebalancing Strategies 169
    Insurance 174
    Summary and Investment Implications 175
    Citations 177
Chapter 6: Equity Investing 183
    Brief History of Equities, Equity Exchanges, and Institutional Investing 185
    Active Investment Approaches 189
    Equity Valuation 192
    Portfolio Construction 199
    Recent Developments in Equity Investing 202
    Beating the Market 205
    Summary and Investment Implications 208
    Citations 210
Chapter 7: Fixed Income Investing 213
    Brief Review of Bonds and the Yield Curve 214
    Sources and Measurements of Risk and Return 216
    Types of Bond Issuers 228
    Sources of Incremental Fixed Income Return 241
    Active Fixed Income Portfolio Management: Optimization and Outperformance 246
    Summary and Investment Implications 254
    Appendix A: Bond Math Examples 255
    Citations 259
Chapter 8: Real Asset Investing 263
    Introduction 263
    Brief History of Real Assets, Commodity Exchanges, and Commodity Investing 265
    The Adoption of Commodity Investing 267
    Commodities: Energy, Metals, and Agriculture 269
    Drivers of Commodity Investing Return 273
    Active Management of Commodity Futures Investments 278
    Relative Value and Substitution Opportunities 280
    Real Estate 282
    Summary and Investment Implications 287
    Citations 289
Chapter 9: Hedge Funds 293
    Hedge Funds: Overview and Brief History 295
    Equity Hedge 301
    Event-Driven Funds 308
    Global Macro 315
    Future of Hedge Funds 327
    Summary and Investment Implications 330
    Chapter Appendix 334
    Citations 339
PART III—Recent Advances in Finance and Investing 345
Chapter 10: Factor Investing and Smart Beta 347
    Factor Investing 348
    Smart Beta Industry Review 366
    Summary and Investment Implications 374
    Citations 377
Chapter 11: Behavioral Finance 383
    Brief History of the Behavioral Economics Field of Study 386
    Behavioral Bias Case Studies 396
    Addressing Behavioral Biases 407
    Summary and Investment Implications 411
    Citations 413
Index 419

Publisher : J. Ross Publishing; None edition (January 8, 2020)
Language : English
Pages : 458
ISBN-10 : 1604271655
ISBN-13 : 978-1604271652

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