The bond markets can be a bewildering place - the words, the concepts and the mathematics can be mind-bogglingly confusing even to seasoned professionals. In this step-by-step guide Stewart Cowley, one of the UK's best-known bond managers, takes investors through the basics they need to know to begin investing in bonds.
From compound interest, through yields calculations, how the bond markets work and how to make the most out of the bond markets, this practical, easy-to-read handbook uses spreadsheet examples combined with a wealth of experience to help you work through real-world examples of bond management.
Stewart was formerly Head of Fixed Income at Invesco, Hill Samuel Asset Management, Newton Investment Management and Old Mutual Global.
Bond Basics - Compound interest - Discounting - Pricing a bond - Conventions Yield - Simple yield - Yield to maturity Duration - Concepts - Duration and pricing Convexity - Concepts - Calculating convexity Total Return Management - Steps to calculating total return Horizon Analysis - Computing total returns over an investment horizon - Scenario analysis Yield Curves - Types of yield curve - Yield simulation and theories The passage of time in bond management - Rolling down the yield curve Using corporate bonds - Assessing the adequacy of corporate bond yields - Example of total return management using corporate bonds Bring it all together - Multi-variable total return analysis