IFoA SA7 study guide
IFoA SA7 · Work through your exam, one topic at a time.
SA7 is the Institute and Faculty of Actuaries' Specialist Advanced subject in Investment and Asset Management, aimed at qualified or nearly qualified actuaries who work in investment functions - insurer investment desks, pension scheme advisory, asset management, investment consulting or risk. It is a written, long-answer paper that tests judgement rather than recall: you are expected to apply investment theory to messy, realistic scenarios and defend recommendations in structured prose. The IFoA SA7 study guide has 9 sections and about 2,426 words.
01Investment environment, asset classes and financial markets
This domain tests whether you can place an asset in its economic context and explain the return drivers, market structure and practical constraints that matter to an insurer or pension scheme. The exam favours reasoning about why an asset behaves as it does over simple lists.
350 words, about 2 min02Asset-liability modelling and investment strategy for insurers and pension schemes
This domain tests the link between liabilities and investment strategy. You must be able to choose between cashflow matching, duration matching and broader asset-liability modelling, and to explain how funding and solvency constraints change the optimal portfolio.
269 words, about 1 min03Valuation and pricing of fixed-income, equity and derivative instruments
This domain tests whether you can value instruments from first principles and explain the assumptions behind the number. Expect discounted cashflow, yield measures, duration and convexity, equity valuation and basic derivative pricing.
281 words, about 1 min04Portfolio construction, asset allocation and risk budgeting
This domain tests how you move from capital market assumptions to a portfolio that meets return, risk and liability constraints. The exam expects efficient-frontier reasoning, practical constraints and an explicit risk budget.
265 words, about 1 min05Risk management, derivatives and hedging applications
This domain tests identification, measurement and control of investment risk, and the practical use of derivatives. You should be able to design a hedge, quantify it and explain why it may fail.
262 words, about 1 min06Performance measurement, attribution and investment governance
This domain tests whether you can measure performance fairly, explain the sources of return and set governance that holds managers accountable without distorting behaviour. Time-weighted return removes the effect of external cashflows and measures manager skill.
258 words, about 1 min07Regulation, capital requirements and reporting for investment business
This domain tests how regulation shapes investment decisions. You must connect rules to capital, reporting and practical constraints rather than recite regulation in isolation.
262 words, about 1 min08Alternative and illiquid assets, including property and private markets
This domain tests whether you can value and govern illiquid assets without pretending they are liquid. Expect property, private equity, infrastructure, private credit and hedge funds, with emphasis on valuation, fees and liquidity risk.
226 words, about 1 min09Behavioural finance, ethics and professional judgement in investment practice
This domain tests whether you can recognise behavioural bias and apply ethical judgement in realistic investment decisions. The exam rewards specific diagnosis and a defensible process, not generic statements about acting professionally.
253 words, about 1 min