Our approach to the management of fixed income portfolios is grounded on strong risk management and attention to downside risks. While the benchmark chosen for a fixed income portfolio explains most of the portfolio returns, we believe prudent active portfolio management can add incremental returns within approved risk limits. The World Bank Treasury manages the investment of over USD 100 billion in high grade fixed income portfolios in US dollars, Euros, Sterling and Yen for the IBRD, its World Bank Group affiliates and external clients. The external clients include international financial institutions, donor trust funds and more than 25 central banks and account for a third of the fixed income assets under management. Treasury accepts fixed income portfolio management mandates from official sector financial institutions. In some cases, these are stand-alone investment management engagements, but more typically they are structured in tandem with an advisory and technical assistance engagement under Treasury’s RAMP program.
Mandates for dedicated portfolios are accepted across three standard offerings:
USD or EUR Short Term Duration Government Bonds
USD Agency Mortgage-Backed Securities
Global Government Bond Index (Hedged)
These investment products are designed to fit the prudential nature of most central bank and official portfolios. With a range of quantitative tools available, Treasury
staff can assist clients in determining an appropriate product or a blend of products that fits the client’s risk and return profile. As with any external asset manager, we provide a full suite of electronic reporting of holdings, risks and performance. More uniquely, Treasury practitioners in each part of the investment process are fully accessible to clients as an integral component of our capacity-building.