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Competitive Advantage in Investing

Summer 2014 MBA Course

B8424-001: Competitive Advantage in Investing

W - Full Term, 05:00PM to 09:15PM
Location: URI 333

Instructor: Steven Abrahams

Successful investing almost always depends on operating with some distinct competitive advantage. And nowhere is that clearer than in the competition between institutional fixed income investors, where many investment models compete to extract return from available assets. Advantage can arise from better information or analysis. But advantage also arises more clearly and more sustainably from the cost and structure of an institution’s leverage and funding, its tax and accounting framework and its regulatory and political environment.
his course approaches investing from the perspective of institutional fixed income portfolio managers trying to capitalize on comparative advantage. It introduces a framework that fits comparative advantage into classical finance theory. It leads students through the advantages held by money managers and hedge funds, banks and insurers,GSEs, sovereign wealth funds and broker/dealers. Through case studies and industry data, the course examines how those advantages shape the investment behavior of these institutions.
To develop practical appreciation for managing a portfolio, students will use actual fixed income market offering to construct a series of portfolios appropriate to different institutions. Students will come to understand how to build a fixed income portfolio appropriate to particular institutions and how the distinct behavior of different institutions can drive pricing, liquidity and other general aspects of the fixed income markets. This course is excellent preparation for any student considering a career in fixed income or equity investment management or for students considering sales, trading or research.