Applied Investment Management
|Unit level:||Level 3|
|Teaching period(s):||Semester 2|
|Offered by||Alliance Manchester Business School|
|Available as a free choice unit?:||N
- BMAN20072 - Investment Analysis (Compulsory)
- BMAN23000 - Foundations of Finance A (Compulsory)
- BMAN23000B - Foundations of Finance B (Compulsory)
Additional RequirementsBMAN23000(A) or (B) is the Pre-Requisites for BMAN31802. Only available to students on BA (Econ), BSc Management/Management (Specialism), BSc IM, BSc IMABS, BA/BSc IBFE, BSc MathswFin and BEconSc.
Pre-requisite course units have to be at least passed at the first attempt unless a higher percentage is indicated below.
Pre-requisites: BMAN23000(A) and (B)Foundations of Finance and BMAN20072 Investment Analysis
It is strongly preferred that students have achieved 65% or higher in at least two of the pre-requisite course units listed above for Applied Investment Management. It is also preferred that students have attended at least one statistics or econometrics course units and understand the fundamentals of regression analysis.
This course demonstrates to students how finance theory is applied in an asset management context. The central aim is to familiarise students with the nature of financial decision making by investment entities such as mutual funds,hedge funds, private equity managers and style investors. The course exposes students to academic research, practitioner-oriented readings, real world case studies, and projects. These materials encompass both conventional wisdom and the state-of-the-art methods used in managing a portfolio of equity securities and alternative assets.
This course describes the fundamentals of investment strategies and some of the main strategies used by hedge funds and proprietary traders, as well as provides a methodology to analyze them. It uses academic studies, practitioner-oriented readings, case studies, and projects to cover both conventional wisdom and state-of-the-art methods used in managing a portfolio of equity securities and alternative assets. Students will be part of the hypothetical Manchester Student Investment Fund as hypothetical portfolio managers or industry analysts. They will be guided step by step to implement one chosen investment strategy, and to use a real trading platform to trade assets for eight weeks. The class also covers institutional issues related to liquidity, margin requirements, risk management, and performance measurement. The class has quantitative component. As a result of the advanced techniques used in state-of- the-art hedge funds, the class requires the students to work independently, analyze and manipulate real data, and use econometrics modelling.
Teaching and learning methods
10 two hour lectures, 3 one hour case study seminars and 2 one hour workshop for group presentationsover the duration of the course. Plus computer-based exercises.
Total study hours: 100 hours split between lectures, classes, reading, self-study and preparation for classes and examinations.
By the end of the course students should be able to:
• Apply basic tools to make core investment management decisions
• Explain the functioning of the asset/wealth management/hedge fund industry
• Understand the nature of the investment decision making process in a range of asset management contexts.
• Analyze the financial and management problems facing mutual funds and hedge funds, and the investment tools that can be used to deal with these problems.
Assessment Further Information
Professional Investment Strategy Group Report: 25% (students will work in teams of 3 or 4), 3000 words;
In class group presentation: 20%;
2-hour unseen examination: 50%;
Class participation and contribution to Manchester Student Investment Fund: 5%.
The classes will involve a combination of lectures, discussions, guest speakers, cases, team projects and presentations.
Class 1: Capital Market: Efficiency and Inefficiencies
Class 2: Hedge Fund Investment Strategies Overview
Class 3: Valuation Basics: Relative Valuation and Multiples
Class 4: Momentum Investing 1: Momentum Strategies and How to Form Momentum Portfolios
Class 5: Momentum Investing 2: Understanding the Source and Risk of Momentum, Refined Momentum Trading Strategies
Class 6: Value Investing: Basics, Comparison with Other Approaches, What’s Historically Worked & Not Worked
Class 7: Style Investing in Practice: Senior Investment Professionals TBD
Class 8: Long-short investment strategies
Class 9: Market Neutral Strategies
Class 10: Short Biased Strategies
There might be a session involving guest speakers to offer student a professional context.
Main Text Book: Efficiently Inefficient: How Smart Money Invests and Market Prices Are Determined, by Lasse H. Pedersen 2015
Aswath Damodaran, 2012, Investment Philosophies: successful strategies and the investors who made them work, Hoboken, New Jersey: John Wiley & Sons, Inc.
Benjamin Graham, 2006, The Intelligent Investor, Revised Edition by Jason Zweig, New York: Harper Business.
• Informal advice and discussion during lectures, board meetings and workshops.
• Written and/or verbal comments on assessed group coursework and group presentations.
• Responses to student emails and questions from a member of staff
• Generic feedback posted on Blackboard regarding overall examination performance
- Lectures - 20 hours
- Seminars - 5 hours
- Independent study hours - 75 hours