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Introduction to Fixed Income Portfolio mgmt (Roles of FIs in portfolios…
Introduction to Fixed Income Portfolio mgmt
Roles of FIs in portfolios
Benefits of regular cash flows
Inflation hedging potential
Diversification benefits
Fixed Income mandates
Liability based mandates
Duration matching
Contingent immunization
Cash Flow matching
Horizon matching
Total return mandates
Enhanced indexing
Active Mgmt
Pure indexing
Bond mkt Liquidity
Liquidity among bond mkt subsectors
Effect of liquidity on FI portfolio mgmt
Pricing
Portfolio construction
Alternatives to direct investing in bonds
Model for FI returns
Estimation of the inputs
Limitations of the expected returns decomposition
Decomposing expected returns
Leverage
Methods for leveraging FI portfolios
Structured financial instruments
Repurchase agreements
Swap agreements
Securities lending
Futures contract
Risks of leverage
Using leverage