Investment Education PLC

Fixed Income Portfolio Construction
Last Updated - 18 July 2008
Todays Date -
Return to CoursePrint course
Duration 1 day
Available as an in-house course


The recent good performance of Fixed Income Markets combined with the poor performance in general of Equity markets has resulted in substantially increased interest in Fixed Income Portfolios.

This one-day course provides a guide to Fixed Income Portfolio Construction for those with no previous experience.  It does assume a good basic knowledge of fixed income investments.



Overview and Definition of the Fund Parameters

-Benchmark Selection and the Varieties Available
-Target Return Relative to the Benchmark
-Investment Horizon
-Permitted Investment Range by Type of Product
-Selection Universe

Investment Process

Determine the Key Drivers of the Bond Markets over the Investment Horizon
Example as to How the Market View is translated into Bond Yield Forecasts concerning:

Compare Investment View to Market Expectations
Alpha Generation: What to do to generate Fund Manager Value:

Asset Allocation re, for example:

Currency Hedging and Overlay Considerations

Minimise Risk or Take on Additional Active Risk?

Portfolio Construction

Build up a Portfolio to Implement the Views Adopted

Managing Risk

Sources of Risk
Measuring and monitoring Risk: Tracking Error and Value at Risk (VaR)