RSM2321H Special Topics in Finance — Institutional and Individual Asset

This is a course in financial planning and asset allocation. There are two main targets of asset allocation: institutions and individuals. Institutions have to deal with an infinite time horizon such as the Ontario Teacher's Pension Plan (OTPP) and the Canada Pension Plan (CPP) and manage larger amounts of money using the more sophisticated techniques associated with modern portfolio theory (MPT). In contrast, individuals have to plan and manage funds over their life cycle and generally use less sophisticated techniques. This creates specific differences in approach. The course contrasts these techniques with reports from investment banks based on "anomalies" suggested in the academic literature and factor models. It then discusses how both are implemented in the rapidly growing numbers of exchange traded funds (ETFs).