Investment Management

Course goals

Learning objectives
At the end of the course the student is able to:

• Explain different asset pricing theories;
• Apply factor models in an event study;
• Understand the difference between active and passive investment strategies;
• Evaluate performance of different types of investors;
• Identify categories of institutional investors;
• Recognise the challenges of various types of investors;
• Comprehend the means as to which risks can be offset by the use of derivatives;
• Understand the different aspects of ESG and their relation with stock valuation;
• Go through all stages of academic research by (i) identifying an academically relevant research question; (ii) reviewing the current literature; (iii) collecting and analyzing data to answer the question; and (iv) draw valid conclusions.

Content

This course aims to deepen students’ understanding of the process of investment management. The course starts with asset pricing theories which aid in structuring efficient investment portfolios. In addition, these theories help students in learning how to set up event studies. Once portfolio construction is discussed, the course considers the pros and cons of both active and passive portfolio management. Subsequently, different types of institutional investors (such as mutual funds, pension funds, and hedge funds) are discussed, together with the challenges they face in managing their portfolios. For instance, think of interest rate risk as a major determinant of the financial health of pension funds. The course continues on how investors can use financial derivatives (i.e., options, futures, and credit default swaps) to mitigate portfolio risks. Finally, we cover ESG (i.e., environment, social and governance) aspects of firms: Here we discuss different ways of assessing ESG performance and we relate it to a firm's financial performance. 

Format
The course comes with both lectures and seminars. The lecturer explains concepts and refers to real-life examples during lectures, while seminars are used to discuss exercises. Where suitable, guest lectures will present additional sessions as to illustrate course materials from a more practical viewpoint.


In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN number. Separate or spare codes are usually not available.