{"id":25470,"date":"2013-05-16T18:02:25","date_gmt":"2013-05-16T12:32:25","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=25470"},"modified":"2024-04-12T14:18:14","modified_gmt":"2024-04-12T08:48:14","slug":"fixed-income-portfolio-management-active","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/fixed-income-portfolio-management-active\/","title":{"rendered":"Fixed Income Portfolio Management \u2013 Active"},"content":{"rendered":"\n<p><strong>Fixed Income Portfolio Management \u2013 Active<\/strong><\/p>\n\n\n\n<p>Fixed income portfolio management is a type of portfolio management that focuses on managing a portfolio of investments that generate a predictable stream of income. This includes bonds, money market instruments, and other debt securities.<\/p>\n\n\n\n<p>Active fixed income portfolio management involves actively managing the portfolio by selecting individual securities, adjusting portfolio duration and yield curve positioning, and actively managing credit risk. The goal of active management is to outperform a benchmark index or achieve a specific investment objective while managing risk.<\/p>\n\n\n\n<p>The process of active fixed income portfolio management involves analyzing economic and market trends, assessing credit risk, monitoring interest rate movements, and making investment decisions based on this information. It requires specialized skills and expertise to navigate the complexities of fixed income markets and to make informed investment decisions.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Active management presumes that the manager can generate a positive a (or provide a positive risk-adjusted return). The usage of swaps is quite common. Swaps involve exchanging one bond for another in anticipation of a change in the relative prices of the bonds. Examples of bond swaps are:\n<ul class=\"wp-block-list\">\n<li>Substitution swap: exchanging one bond for another to exploit pricing discrepancies<\/li>\n\n\n\n<li>Intermarket spread swap: yield spread between 2 market segments is too wide or too narrow<\/li>\n\n\n\n<li>Rate anticipation swap: move toward higher\/lower D portfolio depending on i-rate forecasts<\/li>\n\n\n\n<li>Pure yield pickup swap: buy higher yield bonds and sell lower yield bonds (increase in risk)<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p>A manager may stay with the yield curve that is buy and hold, if it is upward sloping and expected to maintain its direction.&nbsp; As maturity declines, yields decline and contribute to capital gains.<\/p>\n\n\n\n<p>Example:<\/p>\n\n\n\n<p>Buy 9-month t-bills with yield of 1.5% per quarter<\/p>\n\n\n\n<p>Price = Rs. 10,000\/ (1.015)3 = Rs. 9,563.17<\/p>\n\n\n\n<p>Hold for 6 months.&nbsp; If yields now at 0.75% per quarter, Price = Rs. 10,000\/ (1.0075) = Rs. 9,925.56<\/p>\n\n\n\n<p>Return = 1.88% per quarter<\/p>\n\n\n<p>\u00a0<\/p>\n<div class=\"apply\">\n<h3>Apply for Portfolio Manager Certification Now!!<\/h3>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/Certified-Portfolio-Manager\" target=\"_blank\" rel=\"noopener\">http:\/\/www.vskills.in\/certification\/Certified-Portfolio-Manager<\/a><\/p>\n<\/div>\n\n\n<h4 class=\"has-text-align-left wp-block-heading\"><a href=\"https:\/\/www.vskills.in\/certification\/tutorial\/certified-portfolio-manager\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Back to Tutorial<\/strong><\/a><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>Fixed Income Portfolio Management \u2013 Active Fixed income portfolio management is a type of portfolio management that focuses on managing a portfolio of investments that generate a predictable stream of income. This includes bonds, money market instruments, and other debt securities. Active fixed income portfolio management involves actively managing the portfolio by selecting individual securities,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[2080],"tags":[],"class_list":["post-25470","page","type-page","status-publish","hentry","category-portfolio-management"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fixed Income Portfolio Management \u2013 Active<\/title>\n<meta name=\"description\" content=\"Fixed Income Portfolio Management \u2013 Active\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/tutorial\/fixed-income-portfolio-management-active\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fixed Income Portfolio Management \u2013 Active\" \/>\n<meta property=\"og:description\" content=\"Fixed Income Portfolio Management \u2013 Active\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vskills.in\/certification\/tutorial\/fixed-income-portfolio-management-active\/\" \/>\n<meta property=\"og:site_name\" content=\"Tutorial\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/vskills.in\/\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-12T08:48:14+00:00\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/fixed-income-portfolio-management-active\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/fixed-income-portfolio-management-active\/\",\"name\":\"Fixed Income Portfolio Management \u2013 Active\",\"isPartOf\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#website\"},\"datePublished\":\"2013-05-16T12:32:25+00:00\",\"dateModified\":\"2024-04-12T08:48:14+00:00\",\"description\":\"Fixed Income Portfolio Management \u2013 Active\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/fixed-income-portfolio-management-active\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vskills.in\/certification\/tutorial\/fixed-income-portfolio-management-active\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/fixed-income-portfolio-management-active\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Fixed Income Portfolio Management \u2013 Active\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vskills.in\/certification\/tutorial\/#website\",\"url\":\"https:\/\/www.vskills.in\/certification\/tutorial\/\",\"name\":\"Tutorial\",\"description\":\"Vskills - 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