MSc Finance: Investment Management Stream – Professor Peter Klein (BUS 816)

Interview with Peter Klein, Professor at SFU’s Beedie School of Business, MSc Finance graduate program, about his course BUS 816: Investment Policy (Investment Management Stream).

In the msc program i teach a course in investment policy we call it investment policy but it’s closely related to asset allocation in layman’s terms asset allocation relates to the decision of forgiving that investor whether it’s best to have say 60% in equities and 40% in bonds or 50/50 you know it depends on investor’s preferences it also depends on what the

Expected returns and expected risks are in those various asset classes in this course i approach the issue of investment policy or asset allocation in three ways and that’s how we conduct the classes first we clearly have theoretical treatment of the concept of investment policy so that’s derivations lecture format the second way we go about that is very hands-on

By actually heaviness students solve some practical very applied problems in asset allocation using optimization software the program we use is typically matlab it’s a mean variance based optimization program and that type of software is very widely used in industry the third thing we do in class is discuss various articles from the academic as well as practitioner

Literature particularly some of the cfa readings students work together to some extent typically the evaluation is about two thirds based on work done on an individual basis and one third group work in the class we sometimes have presentations i usually give the students we have a discussion at the start of class and determine what how the classes will be conducted

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And whether there are student presentations or not the mathematics in this course itself is not particularly complicated so they need to know strained optimization to some extent but this is not meant to be a course in constrained optimization that’s in the asset allocation on an applied basis so i do not overly emphasize the mathematical rigour of what we do

It’s there but it’s not the key thing of the course this is meant to be a capstone course on suitability making sure that investment decisions that a student wants graduating may be providing to his or her clients its suitability as a topic that is increasingly in focus by the regulator’s around the world we have had a focus on investment policy at an institutional

Level for a long number of years typically as students entering this program would see if they’re involved in and see us there’s an investment policy statement set up for institutional investors outlining what benchmark asset mix is for example this course will give students the insights in order to be able to do those kinds of recommendations on their own that’ll

Be very useful if they work for investment consultant for example to help institutional investor determine asset mix increasingly though over the last ten years this approach has been turned to the individual investor we’ve seen in the industry a great movement towards scale in the alpha and what’s called the alpha generation business so yes you can pick a good

Stock great you should gather a lot of assets and offer your services to a number of investment counseling firms as i said that business has gone to scale and there are fewer positions opening in those in that sector whereas suitability particularly for individual investors there’s lots of room for growth lots of room for expansion this course will teach students

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Transcribed from video
MSc Finance: Investment Management Stream – Professor Peter Klein (BUS 816) By SFU Beedie School of Business