The Certified Fund Specialist (CFS)

The Institute of Business & Finance (IBF) has been educating the financial services industry since 1988.

About The Designation

The Certified Fund Specialist (CFS) designation was begun in 1988. Over thirteen thousand members of the financial services community have gone through the program. The designation is the oldest designation in the mutual funds industry.

Course of study

Overview and Tax Strategies

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.

Categories, characteristics, features, and after-tax returns
Distributions, returns, tracking expenses, and exchanges
Turnover, transaction costs, size, and cash flow
Alpha, beta, standard deviation, and mean regression
Dates, declarations, retirement plans, and "catch-up"

Beyond Tradition

Specialization targets specific concerns and takes portfolio construction to a different level.

Global and emerging markets, hybrids, and sectors
Forecasting, "fed watching," observations, and red flags
Funds vs. individual securities vs. derivatives
Growth, value, GARP, blending styles, and management

REITs

Surprisingly, the one investment people feel comfortable with is usually excluded from asset allocation. Although real estate investing involves special risk (such as the potential for illiquidity), diversifying your portfolio to include real estate beyond the personal residence is easy and prudent. Variation within the category can be easily obtained by sector, size, or region.

Real estate growth, sectors, characteristics, and risks
History, current trends, and management ownership
Blue-chip, bond-proxy, growth, and "turnaround" REITs
Value creation, appreciation, and acceptable debt levels
Payout ratios

Analysis and Evaluation

Advisory services have proprietary systems that help select investment categories as well as specific investment products. 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.

Style boxes, sector weightings, and peer groups
Chasing returns and evaluating future risks

Difficult Decisions

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.

Warning signs and when to consider selling
Calm during downturns plus bull market investing
Morningstar portfolios and the selection process

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 MPT. When properly described and implemented, MPT is truly a blend of both science and art.

Multiple-asset behavior and the three-step approach
Imperfectly correlated assets and the efficient frontier
Real-world portfolios, "experts," and risk aversion myopia
Optimal, sub-optimal, and rebalanced portfolios
Not quite a random walk, what it all means, and post-MPT