PORTFOLIO MANAGEMENT - 2026/7

Module Overview

This module equips students with the analytical frameworks and practical skills required to construct, manage, and evaluate investment portfolios in a professional setting. Starting from the investment policy statement and client mandate, the module works through the full portfolio management cycle: formulating capital market expectations, building optimised allocations using mean-variance and factor-based approaches, implementing portfolios across equity, fixed income, and potentially alternative asset classes, and evaluating outcomes through rigorous performance attribution.

Students will engage with industry-standard tools and datasets to solve realistic portfolio problems under genuine constraints such as liability matching, ESG screens, liquidity budgets etc.. Emphasis is placed on the judgement calls that distinguish competent practitioners: when to deviate from model outputs, how to reconcile conflicting objectives, and how to communicate investment decisions to clients and stakeholders.

The module is particularly relevant to students pursuing careers in investment management. Its content and assessment are designed to develop and test applied analytical reasoning.

Module provider

Surrey Business School

Module Leader

TASIOU Menelaos (SBS)

Number of Credits: 15

ECTS Credits: 7.5

Framework: FHEQ Level 7

Module cap (Maximum number of students): N/A

Module Availability

Semester 2

Prerequisites / Co-requisites

None.

Module content

Indicative content includes:

1. Foundations of the Investment Process. The investment policy statement (IPS); client profiling (risk tolerance, time horizon, liquidity needs, regulatory constraints); fiduciary duties; mandate structures and the flow of decisions from asset owners to investment managers.
2. Modern Portfolio Theory and Mean-Variance Optimisation. The Markowitz framework; efficient frontier construction; sensitivity of optimal weights to input estimates; the Capital Market Line and tangency portfolio; practical limitations and estimation error.
3. Factor Models and the Evolution Beyond CAPM. Single-factor and multi-factor models; Fama-French, Carhart, and more recent factor frameworks; factor investing in practice; the connection between academic factors and investment style.
4. Asset Allocation: Strategic, Tactical, and Dynamic. 
5. Fixed Income Portfolio Management. Duration and convexity management; immunisation strategies; the role of fixed income in multi-asset portfolios.
6. Equity Portfolio Construction. Fundamental and systematic approaches; stock screening and valuation-driven selection; risk budgeting; optimisation with real-world constraints; concentration versus diversification trade-offs.
7. Alternative Investments in Portfolio Context. 
8. Passive vs. Active Management and Market Efficiency. Empirical evidence on active manager persistence; Sharpe's arithmetic of active management; tracking error budgets; the information ratio; when active management can be justified.
9. Risk Management and Portfolio Constraints. Value-at-Risk and Conditional VaR; stress testing and scenario analysis; ESG screens, liquidity buffers, and turnover constraints; translating theory into mandated practice.
10. Performance Measurement and Attribution. time-weighted vs. money-weighted returns; Brinson attribution (asset allocation vs. security selection effects); multi-factor attribution; communicating performance to clients.
11. ESG Integration and Sustainable Portfolio Construction. ESG scoring methodologies; exclusion, integration, and impact approaches; empirical evidence on the performance effects of ESG constraints.
12. Behavioural Finance and Portfolio Decision-Making. Overconfidence, anchoring, disposition effect, and herding; how institutional processes (committees, rebalancing rules, checklists) are designed to mitigate behavioural biases.

Assessment pattern

Alternative Assessment

Not applicable

Assessment Strategy

The assessment strategy is designed to test whether students can apply the analytical tools of portfolio management to realistic problems under genuine constraints, exercise professional judgement in the face of ambiguity, and critically evaluate their own decision-making.

The summative assessment for this module consists of:

Assessment 1: Portfolio Construction Exercise (30%)

Conducted under invigilated conditions, students receive a realistic dataset and a client brief with specific constraints. Within 60 minutes, students must produce an asset allocation recommendation supported by calculations and a written justification of their choices. 

Assessment 2: Portfolio Case Study with Reflective Audit Trail (70%)

A case study that unfolds over the semester, requiring students to construct, adapt, and evaluate a portfolio in response to evolving market conditions and client circumstances. 

At each stage, students must submit a reflective decision log explaining not only what they chose but what they considered and rejected, what surprised them, and what they would do differently. Each successive stage must explicitly reference and build upon the student's own prior submissions, creating a chain of internal consistency that serves as the primary safeguard against academic misconduct. 

Formative assessment and feedback

Students will receive oral feedback during seminars.

Feedback and guidance will be given via SurreyLearn throughout the module.

The class test provides feedback on theoretical underpinnings and typical calculations giving students an early indication where more work may be required.

Module aims

• Equip students with the quantitative and conceptual tools required to construct, manage, and evaluate investment portfolios across asset classes, from initial mandate through to performance attribution.
• Develop students' ability to exercise professional judgement under realistic constraints, including the capacity to translate client objectives into implementable investment strategies and to adapt those strategies as conditions change.
• Provide a rigorous synthesis of modern portfolio theory and its practical extensions grounded in both the academic literature and current industry practice, and foster critical self-reflection on the decision-making process, including an awareness of behavioural biases and the institutional mechanisms designed to mitigate them.

Learning outcomes

Methods of Teaching / Learning

The teaching and learning strategy is designed to develop both the technical competence and the applied professional judgement required to manage investment portfolios. It moves progressively from establishing theoretical foundations to applying them in realistic, data-driven settings.

Indicated Lecture Hours (which may also include seminars, tutorials, workshops and other contact time) are approximate and may include in-class tests where one or more of these are an assessment on the module. In-class tests are scheduled/organised separately to taught content and will be published on to student personal timetables, where they apply to taken modules, as soon as they are finalised by central administration. This will usually be after the initial publication of the teaching timetable for the relevant semester.

Reading list

https://readinglists.surrey.ac.uk
Upon accessing the reading list, please search for the module using the module code: MANM325

Other information

Employability: The contents of this module is largely consistent with the latest CFA Curriculum regarding portfolio management. In addition, the module provides a variety of tasks and assessments that mimic real professional life.

Global and Cultural Capabilities: This module offers a high level of international content drawn from lecture’s research activities and teaching strengths.

Digital Capabilities: Throughout the module, students learn to navigate and use the Virtual Learning Environment such as SurreyLearn, Zoom, and MS Teams.  Students will also learn Excel, Stata, Bloomberg, and other international databases, which provides students with access to the same working practices that investment professional’s use.

Resourcefulness & Resilience: The effectiveness of the Resourcefulness and Resilience will be inherent in assessments in the module.

Sustainability: The module aims at developing students’ understanding, awareness, and capability to develop innovative solutions to deal with key agendas related to sustainable investment conduct.

Programmes this module appears in

Please note that the information detailed within this record is accurate at the time of publishing and may be subject to change. This record contains information for the most up to date version of the programme / module for the 2026/7 academic year.