IFoA SP5 study guide
IFoA SP5 · Work through your exam, one topic at a time.
SP5 Investment and Asset Management is a Specialist Principles exam within the Institute and Faculty of Actuaries (IFoA) qualification structure. The IFoA describes itself as the professional body whose curriculum, exams and learning resources support every stage of an actuarial journey, and its site lists practice areas, research and events spanning investment work - including sessions such as "Investment actuaries in OCIO: Skills, roles and opportunities". SP5 is aimed at candidates who have completed the Core Principles stage and want to specialise in investment, either for a role in asset management, investment consulting, or an actuarial function that sets investment strategy. The exam tests the application of actuarial judgement to investment problems rather than pure recall, so preparation should combine the current IFoA curriculum and core reading with the IFoA Virtual Learning Environment, which the IFoA says offers "thousands of high-quality learning resources, short courses, and microlearning materials" including event recordings, research papers and working party outputs. Practise written answers under time pressure, since Specialist Principles papers reward structured, assumption-explicit responses. Important caveat: the IFoA's SP5 curriculum and exam page was retrieved as an archived page stating "This page has been archived", so current logistics - question count, duration, pass mark, fee, syllabus weightings and retake rules - could not be verified from the official source. Topics on this exam: Investment and asset management. The IFoA SP5 study guide has 1 section and about 391 words.
01Investment and Asset Management
SP5 tests how an actuary designs, monitors and explains an investment strategy that meets liability and capital objectives. Expect questions on asset-liability modelling, portfolio construction, risk measurement, derivatives overlays, performance attribution and governance. Answers need explicit links between assets, liabilities, constraints and the client’s risk appetite, not just product knowledge. Start from the liability profile: timing, currency, inflation linkage and liquidity determine the strategic benchmark.
391 words, about 2 minMore study resources for IFoA SP5
- Practice questionsAn investor holds a bond with a modified duration of 6.0 and a convexity of 45.
- FlashcardsSharpe ratio. Excess portfolio return per unit of total volatility: (rp − rf)/σp.
- Cheat sheetPortfolio return decomposition: total return = income yield + capital gain/loss; real return = (1 + nominal)/(1 + inflation) − 1, or approximately nominal − inflation for small rates.
- Key termsasset-liability modelling (ALM). A framework that projects assets and liabilities together under consistent economic and demographic assumptions, so that a strategy can be judged by whether it funds obligations as they fall due, not by return alone.
- Study planMap the SP5 syllabus against your existing knowledge and rate each learning objective red, amber or green.
- Common mistakesCandidates under time pressure default to book knowledge they can recall fluently, because recall feels productive and application requires slow re-reading and judgement.
- Exam-day guideSP5 (Specialist Principles: Investment and Finance) is delivered under the IFoA's own exam regulations, and the exact format, word-processing/software permissions and any open-book allowances can change between sittings.