Cliro

CFA® Level I · 2027 curriculum

Portfolio Construction for CFA® Level I

Portfolio Construction connects investment risk and return with investor objectives, covering diversification, efficient portfolios, CAPM, portfolio planning, behavioural biases, asset allocation, performance evaluation and risk management.

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What this topic covers

Portfolio Construction brings together the ideas used to build, evaluate and govern investment portfolios. You will examine how risk, return and correlation shape diversification and efficient portfolios, then connect market risk to expected return through the CAPM. The topic also covers the portfolio management process, investment policy statements, asset allocation, behavioural biases and the frameworks used to identify, measure and manage risk.

By the end of this topic you should be able to:

  • Connect asset risk, correlation and diversification to efficient portfolio selection.
  • Use CAL, CML, beta and CAPM relationships in portfolio decisions.
  • Compare investor types, pension structures and pooled investment products.
  • Translate client objectives, risk tolerance and constraints into portfolio planning.
  • Recognise behavioural biases and their implications for investment decisions and markets.
  • Understand risk governance, budgeting, measurement and methods for modifying exposures.

How the topic is structured

The topic begins with portfolio risk and return, moving from asset characteristics and diversification to efficient frontiers and investor-specific portfolio choice. It then develops capital market theory through the CAL, CML, beta, CAPM and performance measures. The focus shifts from theory to practice through the portfolio management process, investor needs, IPS design and strategic asset allocation. The final sections address behavioural influences on decisions and the governance, measurement and modification of investment and enterprise risk.

Practice in Cliro

How you practice Portfolio Construction in Cliro

  • Practice by topic

    Work through this topic on its own, or include it in a mixed session across the curriculum.

  • Detailed explanations

    See why the correct answer works after every practice question.

  • Review and mistakes

    The mistake log keeps incorrectly answered questions easy to revisit. Review brings due concepts back after time has passed.

  • Formula Gym and progress

    Recall key formulas without prompts and track progress by topic and concept.

Exam Pass and Monthly both include the two full mock exams.

See what is included

Where Cliro fits

Use Cliro at any stage of your Level I preparation.

  • Starting Level I

    Take the free diagnostic, then practice by topic. Your results build a picture of where you stand across all ten topics.

  • Retaking Level I

    Your diagnostic and practice results show which concepts are still weak. The mistake log keeps incorrectly answered questions easy to revisit, and Review brings due concepts back after time has passed.

  • Alongside your existing materials

    Cliro is designed to work alongside your core reading materials, adding question practice, mock exams, Formula Gym, review and progress tracking.

Other Level I topics

Start with a clear picture of where you stand.

The free diagnostic gives you an initial topic profile. Upgrade when you want the full Question Bank, mock exams and Formula Gym.

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Free diagnostic • 20 questions • No payment details required