Course description
Tactical and Dynamic Asset Allocation
Top-down market drivers have become ever more important to asset allocators and investment managers in general. This intensive 2-day programme digs deeply into which macro drivers are relevant, how they change over the business cycle and how monetary policy impacts market performance.
It gives delegates the tools to develop an integrated top-down view, determine the investment climate and make decisions about tactical asset allocation and style and sector choices. Emphasis is on developing hands-on skills and confidence and workshops of relevance to the current scenario are used extensively throughout the course.
Upcoming start dates
Course leader
Henrik Lumholdt is a seasoned finance professional with over 30 years of capital markets experience. A partner in Copenhagen Allocation Partners, an investment advisory, he spends most of his professional time focused on international economies and capital markets.
Previous roles include Chief Investment Strategist of Spain’s largest asset management company, BBVA AM, Chief Economist for Bank of America, Spain, Head of Fixed Income Research at FG / Merrill Lynch and Senior Economist for Nordea Bank. Henrik has been an adjunct professor of economics and finance at IE Business School since 2001 and has won numerous prizes for outstanding teaching. He is the author of: “Strategic and Tactical Asset Allocation: An Integrated Approach”, Palgrave Macmillan (2018).
Suitability - Who should attend?
The course is relevant for anyone involved in making portfolio decisions, analysing financial markets, and delivering investment advice. In particular:
- Chief Investment Officers
- Portfolio managers
- Investment strategists
- Wealth managers
- Macro hedge fund managers
- Traders
Practical experience in capital markets and familiarity with the main financial instruments is assumed. Some basic knowledge of macroeconomics and statistical methods is useful, but the course leader will always be available to clarify doubts.
Outcome / Qualification etc.
This programme is eligible for CE/CPD credit hours from CFA and GARP Institutes.
Training Course Content
Day One
Section I – Motivation for the Tactical Approach
- The limits of diversification
- Risk management vs. market timing
- Stock picking vs. index investing
- Micro vs. macro efficiency
- Trends in asset management
Section II - Macro Sensitivities of the Major Asset Classes
- Growth
- Inflation
- Combinations of growth and inflation
- The macro drivers of the stock-bond correlation
Section III - Gauging the Business Cycle
- Classical business cycle analysis
- The growth-cycle approach
- The output gap and its estimation
- Proxies for the output gap
- Separating secular trends from cycles
Section IV - The Importance of Monetary Policy
- Monetary policy objectives
- The modern central bank toolbox
- Yield curve dynamics
- Equity valuation
- Corporate bond spreads
Workshop: Taper tantrums
Section V - Asset Class Performance over the Cycle
- A four phases framework
- Characteristics of each phase
- Transitions to a new phase
- The modifying impact of monetary policy
- Asset class performance in each phase
Workshop: Where in the cycle are we now?
Day Two
Section I - Building an Integrated Macro View
- Growth and inflation: putting the pieces together
- Reducing the number of variables: timely proxies
- Leading indicators
- Nowcasting
- Creating a macro-dashboard for TAA
Section II - Recessions and Exogenous Shocks
- What causes recessions?
- Do we have any chance of predicting recessions?
- The policy response
- Asset class behaviour during recessions
Workshop: How Covid-19 upended everything – momentarily
Section III - Dynamic Asset Allocation
- The importance of the time horizon
- Looking for relevant drivers of risk and return
- Modelling the drivers to create relative scores
- Back testing
- Defining the investment climate
Section IV - Beyond Asset Classes
- Should equity style factors be timed?
- Equity style performance over the business cycle
- Value vs. growth and the yield curve
- Equity sector performance and the business cycle
- Equity styles and sector exposure internationally
Workshop: Analysing the current scenario
Course delivery details
Courses are delivered in the London classroom and live online via LFS Live in London, New York, and Singapore time zones.
Please contact LFS for more details.
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