[Verse 1]
When you've got liabilities coming due
Match your cash flows, that's what smart managers do
Duration matching keeps the interest rate risk low
Immunization helps your portfolio grow
But when rates fall too far, you might want to switch
Contingent immunization gives you that twitch
[Chorus]
LDI keeps you safe and sound
Cash flow match when payments come around
Full rep, sampling, optimize your way
Active strategies help you win the day
Bullet, barbell, ladder up the curve
Currency hedging protects what you deserve
[Verse 2]
Index replication starts with full complete
Every single bond, no shortcuts to beat
Stratified sampling groups by similar traits
Optimization software calculates the weights
Tracking error minimal, costs under control
Choose your method based upon your goal
[Chorus]
LDI keeps you safe and sound
Cash flow match when payments come around
Full rep, sampling, optimize your way
Active strategies help you win the day
Bullet, barbell, ladder up the curve
Currency hedging protects what you deserve
[Verse 3]
Sector rotation, move from corps to govs
Duration management when the Fed rate shoves
Credit positioning, spread the risk around
Yield curve strategies keep your feet on ground
Bullet concentration, barbell at the ends
Ladder through the years, on time it depends
[Bridge]
International bonds bring currency risk
Cross-currency basis makes the spread more brisk
Hedge your exposures when you venture far
Forward contracts are your guiding star
Basis swaps and futures lock the rate
Don't let currency swings seal your fate
[Chorus]
LDI keeps you safe and sound
Cash flow match when payments come around
Full rep, sampling, optimize your way
Active strategies help you win the day
Bullet, barbell, ladder up the curve
Currency hedging protects what you deserve
[Outro]
Fixed income mastery takes time to learn
Match your strategy to the income you earn
From immunization to active plays
Portfolio management has many ways