Fixed Income Portfolio
Manage your exposure to interest rate risk
If you’re managing a fixed income portfolio, you know how important it is to manage your exposure to interest rate risk.
One way to do this is through hedging with interest rate swaps. An interest rate swap is a derivative contract that allows two parties to exchange fixed and floating rate payments on a notional amount of principal. By entering into an interest rate swap, you can effectively convert a fixed rate bond into a floating rate bond or vice versa, depending on your needs.
How It Works
Let’s say you hold a portfolio of fixed rate bonds and you’re concerned that interest rates may rise, causing the value of your portfolio to decline. To hedge this risk, you could enter into an interest rate swap where you receive the fixed rate payments and pay the floating rate payments. This would effectively convert your fixed rate exposure into floating rate exposure, allowing you to benefit if interest rates rise. Conversely, if you were concerned that interest rates may fall, you could enter into an interest rate swap where you pay the fixed rate payments and receive the floating rate payments.
Why Work with Us
We offer a range of services to help you hedge your fixed income portfolio with interest rate swaps. Our team has extensive experience in interest rate derivatives, and we can help you design and implement a hedging strategy that meets your specific needs. We can provide guidance on which interest rate swaps to use, how to execute trades, and how to monitor your portfolio to ensure that you’re achieving your hedging objectives.
Our Services Include
Hedging strategy design
We’ll work with you to develop a hedging strategy that aligns with your portfolio’s objectives and constraints. We’ll take into account your portfolio’s size, duration, and cash flow needs to create a customized solution that meets your needs.
Execution
We can execute interest rate swaps on your behalf, using our network of counterparties to ensure that you get the best possible execution. We’ll handle all the operational details, from trade confirmation to settlement, so you can focus on managing your portfolio.
Reporting and monitoring
We’ll provide regular reports on your hedging program’s performance, including valuations, cash flows, and P&L attribution. We’ll also monitor your portfolio to ensure that your hedging program remains aligned with your objectives.
If you’re looking to hedge your fixed income portfolio with interest rate swaps, our team can help. We offer a comprehensive suite of services to help you design, implement, and monitor a hedging program that meets your needs. Contact us today to learn more.