Fixed Income Portfolio Management

The recent period of uncertainty in the equity markets has produced renewed interest in bonds. Participants discover how principles of diversification and risk control are applied by fixed income money managers in constructing institutional portfolios.

18-Jun-2008 -- 20-Jun-2008New YorkUSD$3275
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ William Goodwin; ] Wed Thu Fri Level: Basic
CPE Credits: 21.5

12-Nov-2008 -- 14-Nov-2008New YorkUSD$3275
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ William Addiss; ] Wed Thu Fri Level: Basic
CPE Credits: 21.5

Junior portfolio managers, money managers, research analysts, client services staff, consultants, individual and institutional investors, private bankers and financial advisers, research staff members of pension boards and plan sponsors.
No advance preparation required.
Students will be able to:
  • Identify the features/benefits and risks/rewards of the various products which constitute the marketplace
  • Understand the dynamic nature of the yield curve and its implications on portfolio management
  • Describe Repo and Reverse Repo in fixed income portfolio management
  • Explain the concept of Duration as a measurement of volatility and the management of that risk
  • Manage risks in a fixed income portfolio, including: Interest Rate Risk; Credit Risk; Re-investment Risk; Rollover Risk
  • Apply passive and active portfolio management techniques, such as: Barbells; Duration Plays; Horizon Trading; Laddering
  • Discuss the fundamentals of hedging using: Cash Market Techniques; Interest Rate Swaps; Credit Default Swaps
Financial calculator is required.
"Instructor had strong background and good presentation skills"
"Very well focused and comprehensive, giving a full picture on fixed income securities"
  • Equity Portfolio Management
  • Global Trader Simulation - 4 Day
  • Securities Analysis - Day
    • Day 1. Introduction: Overview of the Fixed Income Marketplace

    The Capital Markets: The Big Five

    • Stocks and Bonds: How They Differ
    • A Brief History of Bonds
    • Size and Complexity of the World Bond Market

    Bond Math

    • The Concept of Present Value
    • The Bond Price Equation
    • Three Types of Yield: Coupon, Current, Yield to Maturity (YTM)

    How Safe Are Bonds ?

    • Risks in Fixed Income Investing
    • Credit
    • Interest Rate
    • Reinvestment
    • Liquidity
    • Call
    • Are Treasury Securities risk-free?

    A Dealer Market

    • Auction vs. Dealer Market
    • How Bonds Are Traded
    • Primary and Secondary Market
    • Issues of Transparency
    Case: The Viaticus Fund (Reading: Bonds: Risky, Arcane, But Essential)

    Day 2 The Participants: Issuers and Instruments

    Treasuries

    • The Benchmark
    • Bills, Notes, Bonds
    • Their purpose
    • How issued

    Corporates

    • Capital Structure: Equity vs. Debt
    • Conventional Debt
    • High Yield Securities: ''Junk Bonds''
    • Michael Millken and Drexel
    • Hybrids: Convertibles, Warrants, Debentures
    Reading: "Burgers and Bonds"

    Municipals

    • Why They Exist
    • Revenue and General Obligation
    • Tax Exempt Features
    • The Concept of Public Good: A Video

    Fixed Income Mutual Funds

      Reading: "The City of Skokie" (Case: Using Bonds in a 401K. Film: "The Trillion Dollar Bet")

      Securitized Products

      • Mortgage Backed Securities
      • Collateralized Mortgage Obligations
      • Asset Backed Securities

    Day 3. The Investors: Institutions and Individuals

    Constructing a Fixed Income Portfolio

    • Advantages for Individuals: Bonds vs. Bond Funds
    • Advantages for Institutions: Active vs. Passive Strategies

    The Yield Curve

    • Why Is It Important ?
    • Its Shape
    • Theories
    • How Is It Used?

    Bond Math II

    • Realized Compound Yield: Beyond YTM
    • Duration: What and Why?
    • Convexity: What Is It?
    • Dissecting a Zero Coupon Bond: Pricing Off the Curve

    Some Strategies

    • Buy and Hold
    • Bullets and Barbells
    • Butterflies
    • Ladders
    • Immunization
    • Hedging

    Types of Diversification

    • By Sector
    • By Quality
    • By Maturity or Duration

    Bringing It All Together

    • The Portfolio Manager's Art
    • Importance of Asset Allocation
    • Funding Liabilities: Pension Fund Assumptions
    • Asset Liability Management (ALM)
    • The Balanced Fund Approach
    Case 2: A Look at an Institutional Portfolio

    Clients who register for this course will receive a complimentary 6 month subscription to the Financial Times and FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. Subscriptions will start within 6-8 weeks of the application process and are limited to one per client. For questions about your subscriptions call 800-628-8088 or email uscirculation@ft.com. US and Canada enrollees only.

    Lunch included for all students taking day classes.