Certified Funds Specialist - Curriculum
Module I – Regulation, Structure, Expenses, and Titling
There is more to this investment than meets the eye. Aspects of mutual funds that are often forgotten turn something that appears simple into something to be marveled. Advisors attract more clients if they incorporate ideas not discussed by other brokers.

  • Fund investments plus rates of return for bonds, real estate, and stocks
  • Structure, regulation, the prospectus and statement of additional information
  • One-time and ongoing charges, expense ratios, turnover, and web tools
  • Advantages and disadvantages of funds plus Class A, B, and C share comparisons
  • Rate of return calculations, income ratios, and how NAV is misunderstood
  • Account registration, shareholder services, SIPC coverage, and fund "supermarkets"

Module II – Management and Fund Selection
Advisory services have proprietary systems that help select investment categories as well as specific funds. Some aspects are insightful and meaningful; others have little value, create a false sense of security, and do not stand up to the test of time.

  • Ownership, experience, costs, and management's corporate culture
  • Advantages of small and large portfolios plus how to monitor the manager
  • Active vs. passive management, using index funds, and outside managers
  • Risk measurements: alpha, beta, duration, R-squared, and Sharpe
  • Blend, growth, and value categorization plus top-down and bottom-up selection
  • Fundamental vs. technical, qualitative vs. quantitative, group rotation, and momentum players
  • International investing, currency hedging, purchasing power parity, and suggestions for going global
  • Bond risks, fiduciary constraints, rate forecasts, yield spreads, hybrids, and convertibles

Module III – Tax-Free Bonds, Money Market, Specialty Categories, and Time Value Analysis
Investment choices range from the simplistic to the complex. Advisors need to understand the importance of packaged products other than mutual funds. The present and future value of money plays an integral part in setting and obtaining goals.

  • Municipal characteristics plus using closed-end funds, and unit investment trusts
  • Target retirement, socially responsible, focused, flexible, and sector funds
  • High yield vs. junk, bank-loan, inflation-indexed, bear market, long-short, and hedge funds
  • Berkshire Hathaway, new fund and UIT concerns, plus retirement statistics
  • Money market composition, unique category risks, and watching expenses
  • Closed fund reality, unpopular categories, buying new funds, and portfolio duplication
  • Analysis and rating services, dealing with fickle investors, and how many funds to own
  • Opportunity cost, compounding, plus present and future value tables

Module IV – Asset Categories, Market Indicators, CEFs, ETFs, and REITs
It may well be that open-ended funds should be used in conjunction with CEFs, ETFs and UITs. Specialization targets specific concerns and takes portfolio construction to a different level. Diversifying real estate beyond the personal residence is easy and prudent. Variation within the category can be easily obtained by sector, size, or region.

  • Domestic equity, bear market, financial, and health care funds
  • Metals, natural resources, real estate, technology, and utilities funds
  • Target retirement, socially responsible, focused, flexible, and sector funds
  • Foreign blend, growth, and value, plus emerging markets and overseas bond funds
  • Government securities, balanced, high-yield, and world allocation funds
  • Market indicators, indices and averages, plus fund cash flows
  • Buying and selling closed-end funds, CEF discounts and premiums, plus strategies
  • ETF creation, disclosure, differences, management, rankings, and low correlations
  • REIT sectors, cycles, history, trends, cash flow, payout ratios, and acceptable debt levels

Module V – Risk, Timing the Market, When to Sell, and Taxation
Selection, monitoring, and portfolio construction take on a new perspective when the markets are experiencing extremes. Limitless sources make recommendations, but the decision-making process of what to do during bear markets is usually omitted. Compounding can be enhanced with a simple understanding of income taxes and appropriate planning strategies.

  • Types of risk—from actuarial to reinvestment, margin accounts, style boxes, and hedge fund disasters
  • Taking the market's temperature, estimating probable returns, value averaging, plus greed and fear
  • Rate changes, warning signs, selling considerations, rebalancing, and withdrawing gradually
  • Taxes: automatic reinvestments, distributions, dividends, basis determination, and undistributed gains
  • Tax efficiency, loan interest, the "kiddie tax," wash sale rules, and 2007 projections
  • Tax formula for individuals and couples, credits, deductions, and exemptions
  • IRAs, 401(k)s, Keoghs, and other qualified plans, plus social security benefits and taxation

Module VI – Modern Portfolio Theory (MPT)
Since the early 2000s, "asset allocation" has become the catch phrase of the financial community, yet few understand the workings or limitations of modern portfolio theory (MPT). When properly described and implemented, MPT is truly a blend of both science and art.

  • Basics of asset allocation, understanding probability, and revisiting standard deviation
  • Multiple-asset portfolios, simple model behavior, risk dilution, and the efficient frontier
  • The "sweet spot," survivorship bias, clients' three advantages, linked markets, and serial correlations
  • Profiting from inefficiencies, optimal allocation, value investing studies, and behavior finance
  • The order of gains and losses, ill-timed withdrawal programs, and core-satellite opportunities