This lesson explores the practical management of investment portfolios, including a focus on credit quality and diversification.

6.1. Credit Quality and Ratings

Maintaining a portfolio of high credit quality is essential for treasury investments. Treasurers must understand “credit ratings for short-term investment products” . This includes setting counterparty limits and selecting appropriate investment products. The AFP’s Certified Treasury Professional (CTP) body of knowledge includes “Capital Market Investments” as a key domain, covering the management of these portfolios [citation:5, 9].

6.2. Diversification and Risk Management

To manage counterparty risk, treasury must establish and monitor credit limits, assessing the financial health of counterparties and setting maximum exposure limits . Diversification is a key tool for managing concentration risk.

6.3. Contemporary Investment Considerations

The investment landscape is evolving, and treasury must be aware of new considerations. This includes Sharia-compliant investments, peer-to-peer lending platforms, and ESG-driven investment considerations . Treasury must also address the challenges and opportunities of investing in a digital world, which are covered in the ACT’s “Treasury operations & sustainability” unit .