Module 12 – Introduction To Institutional Investment and Fund Managers

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About Course

12.1 Module Description

This module provides a practical introduction to fund management and the role of institutional investors in capital market development. It is designed to help Ethiopians interested in the fund management industry gain introductory skills and for would be fund managers build internal capacity and train new staff. It also serves as an accessible guide for policymakers, regulators, institutional and retail investors who invest through collective investment schemes, pensions, insurance funds, and other pooled vehicles. The course highlights key operational structures, governance responsibilities, legal frameworks, and strategic trends in fund management.

Please note: Any references to laws or regulations are included for educational purposes only. They may also become outdated over time. Nothing in this course should be taken as legal advice, and learners should consult a qualified legal practitioner for any legal advice.

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What Will You Learn?

  • Understand the history and development of collective investment schemes.
  • Identify different types of funds, including pension funds, insurance funds, collective investment schemes – open or closed ended, and exchange-traded funds (ETFs).
  • Create basic diagrams and write-ups showing the key structural components of fund management, including clients, fund managers, agents, brokers, issuers, and regulators.
  • Understand how fund managers and institutional staff are required to act in the best interests of members, including the roles of mandates, trustees, administrators, and investor disclosures.
  • Recognize key corporate governance principles as they apply to institutional investors and investment funds.
  • Review fundamental principles of fund management such as portfolio structuring, diversification, and performance measurement.
  • Understand the legal and regulatory framework for fund management in Ethiopia, and how to stay up to date with changes.
  • Identify and explain key aspects of fund administration, including portfolio structuring, diversification, performance monitoring, investor communication, cash-flow management, and aligning future income with expected liabilities.
  • Develop a framework to assess and manage risks in institutional fund management.
  • Explore global capital market trends that may influence the evolution of fund management in Ethiopia.
  • Gain an introduction to sustainability and ESG principles in capital markets, and consider the opportunities for fund managers in Ethiopia.

Course Content

Module introduction

  • Module introduction
    02:12

Chapter 1: Introduction to Brokerage Services and Capital Markets
This chapter introduces the concept of institutional investors and collective investment schemes, explaining how they differ from individual investors and why they are crucial to capital market development. It highlights the opportunities and challenges specific to Ethiopia and draws lessons from how institutional investors have contributed to market growth in other African countries.

Chapter 2: Types and Structure of Investment Funds
This chapter explores the different types of investment funds, including pension funds, insurance funds, and Collective Investment Schemes. It introduces the structures that support these funds—such as administrators, custodians, and regulators—explains how they work together, and integrates fund management practices such as organizational setup, portfolio strategy, and operations. The chapter also considers which fund structures could be most suitable for the Ethiopian market as it develops.

Chapter 3: Acting For The Beneficiaries – Governance and Fiduciary Duties
Strong governance is essential for protecting the interests of savers and fund members. This chapter introduces the concept of fiduciary duty and examines the roles of trustees, fund managers, and administrators in ensuring that funds are managed responsibly. It covers oversight structures, international standards, and the importance of transparency, accountability, and ethical behavior in institutional investment.

Chapter 4: Fund Administration and Portfolio Management Basics
This chapter introduces the core functions of managing a fund’s investments and operations. It covers portfolio structuring, diversification, and balancing risk and return. It also explains key administrative responsibilities such as maintaining member records, calculating net asset value (NAV), and managing cash flows to meet future liabilities. These foundational skills are essential for ensuring that funds are both well-managed and financially sustainable.

Chapter 5: Regulation, Licensing, and Oversight in Fund Management
A well-regulated fund management industry builds trust and protects investors. This chapter outlines the emerging legal and regulatory framework for fund management in Ethiopia, including the roles of ECMA and ESX. It explains key compliance principles, the difference between regulation and ethics, and how professionals can stay informed as the legal environment evolves.

Chapter 6: Strategic Outlook and Emerging Opportunities
Fund management is evolving rapidly in response to global shifts in technology, sustainability, and investor expectations. This chapter explores key trends such as passive investing, ESG integration, digital platforms, and financial inclusion. It considers how Ethiopian institutions might adapt these innovations and the opportunities for fund managers to contribute to sustainable development and long-term capital market growth.

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