The Theory and Practice of Investment Management: Asset Allocation, Valuation, Portfolio Construction, and Strategies, Second Edition

KEY POINTS

• The global fixed income portfolio manager creates a global bond portfolio, considering all the possible securities within the “benchmark” set of investment possibilities, selecting duration targets and how best to achieve the duration, yield curve positioning and the distribution of cash flows on the yield curve, convexity, credit quality, country selection/hedged international exposure, and nondollar bond or currency exposure. The global portfolio manager strives to post favorable returns versus competitors.

• Global fixed income portfolio managers, whether total or absolute return in discipline, have a significant role to play that benefits not only fixed income investors but emerging and developing countries, as well, by providing more permanent capital to markets that have the potential to yield attractive returns.

• Global fixed income portfolio managers know that market consensus as reflected in current fixed income securities prices on a forward basis can be an incorrect predictor of future rates. A skillful portfolio manager is able to assess all the germane bits of accessible market information and apply knowledgeable market strategies that express disagreement with current global forward prices.

• The basic factors that the global fixed income portfolio manager must consider worldwide include: economic, political, historic, psychological, monetary and fiscal policies, products available, risks associated in buying and selling these products, the impact ...