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Performance of reliable communication over a coherent slow-fading multiple-input multiple-output (MIMO) channel at high signal-to-noise ratio (SNR) is succinctly captured as a fundamental tradeoff between diversity and multiplexing gains. This paper studies the problem of designing codes that optimally tradeoff the diversity and multiplexing gains. The main contribution is a precise characterization of codes that are universally tradeoff-optimal, i.e., they optimally tradeoff the diversity and multiplexing gains for every statistical characterization of the fading channel. This characterization is referred to as approximate universality; the approximation is in the connection between error probability and outage capacity with diversity and multiplexing gains, respectively. The characterization of approximate universality is then used to construct new coding schemes as well as to show optimality of several schemes proposed in …