Advanced Bond Portfolio Management

This chapter provides a general overview of fixed income portfoliomanagement. More specifically, investment strategies and portfolioperformance analysis are described. A broad framework is providedrather than a deep or exhaustive treatment of these two aspects of fixedincome portfolio management.A discussion of the risks associated with investing in fixed incomesecurities is not provided in this discussion. They are, however, providedin other chapters of this book. Exhibit 1.1, nonetheless, provides a summaryof the risk factors that affect portfolio performance.FIXED INCOME INVESTMENT STRATEGIESFixed income investment strategies can be divided into three approaches.The first considers fixed income investment strategies that are basicallythe same as stock investment strategies. This is a pure asset managementapproach and is called thetotal return approach. The second approac