Overview of Fixed-Income Portfolio Management

Free CFA Level III: Portfolio Management lesson in Portfolio Construction. 37 min read, ~5,540 words.

Fixed income serves four roles (diversification, income, inflation hedging, liability matching); the mandate type (liability-based, total-return, liquidity-based) dictates the instrument. Total return management maximizes risk-adjusted return vs. a market benchmark; LDI minimizes surplus volatility vs. liabilities. Government bonds diversify equity risk; high yield does not (correlations spike above 0.70 in...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• fi pm overview

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