ABSTRACT
In a volatile and uncertain market scenario, it is very challenging for a portfolio manager to successfully trade in securities and accordingly to manage investment and / or trading portfolio. The objective of this chapter is to make the readers aware about various real market circumstances/scenarios, and a set of strategies that portfolio managers required to adopt to trade in various fixed income products and to manage their bond portfolio, depending on the nature of the investor, market movements, management ability, etc. At the end of this chapter, the readers are expected to be familiar with:
What are the issues required to be looked into by different types of investors to manage their fixed income portfolio?
How setting of investment objectives/goals, and development of necessary strategies to achieve the goals are important?
What are different Passive Strategies, bond traders or portfolio managers may like to follow to manage their fixed income portfolio?
How passive strategies like Bond Indexing, Cash Flow Matching, and Immunization are effectively implemented to manage bond portfolios?
How an Active Portfolio Manager is different in his/her approach in bond trading and portfolio management?
What is the role of Yield Curve shifts in the selection of a desired active trading strategy?
What are the various strategies that a trader or portfolio managers may like to consider to actively manage their fixed income portfolio?
What are the broader Usefulness and Limitations of both Passive and Active Strategies?
What is bond portfolio Optimization? How a bond portfolio manager can achieve his/her objective, subjected to fulfilling the required set of constraints?
