APT·INVESTMENT · Module 3: Investment for DB and DC Schemes·UnitINVESTMENT · Unit 01Access: Premium

Unit 3.1: Capital Markets and Asset Classes

Unit 3.1 covers the investment building blocks a trustee needs to recognise. It runs through how the capital market works, the major asset classes and the risk and return characteristics of each, the reasons for investing overseas and the currency exposure that comes with it, specialised asset classes and investment methods, with-profit insurance arrangements, and the alternative assets and financial instruments a scheme may hold, including property and derivatives. The syllabus asks trustees to understand what each asset does inside a portfolio rather than to price it, so the questions concentrate on characteristics and on the role an asset plays.

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