Foundations of Fixed Income Portfolio Management

Fixed income is frequently described as the boring part of finance — until interest rates move sharply or a major issuer defaults. Managing a bond portfolio well requires understanding a set of analytical concepts — duration, convexity, yield curve dynamics, credit spreads — that have no direct parallel in equity investing. For any investor or finance professional with exposure to fixed income, these foundations are non-negotiable. By the end of this course you will be able to explain and calculate modified duration and convexity for a bond or portfolio, interpret yield curve shapes and their implications for portfolio positioning, and describe the key dimensions of credit risk in fixed income. What you will learn: - Bond pricing fundamentals: the inverse relationship between price and yield, and why it exists - Duration: Macaulay duration and modified duration — what they measure and how they are used - Convexity: why duration alone understates price changes for large yield moves, and how convexity adjusts for this - Yield curve shapes: normal, flat, inverted, and humped — and what each signals about the rate environment - Key rate duration: measuring sensitivity to movements at specific points along the yield curve - Credit risk: default probability, loss given default, credit ratings, and credit spread dynamics - Immunisation: how duration matching protects a fixed income portfolio against interest rate changes - The yield curve and monetary policy: how central bank rate decisions transmit through the bond market The course is structured as a sequence of concept readings, each building on the previous and grounded in numerical examples. Self-assessment exercises ask you to calculate duration and interpret yield curve scenarios before advancing. Reflection prompts explore how each concept applies to different types of fixed income portfolios. This course is designed for investors, finance students, and professionals new to fixed income analytics. Basic familiarity with bond pricing concepts is helpful but not required. This content is purely educational and informational; it does not constitute financial advice.