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Fixed Income Portfolio Management

Treasury practitioners
in each part of the investment process are fully accessible
to clients
as an integral component of our
capacity-building.

The World Bank Treasury manages over USD 120 billion in high grade fixed income portfolios in US dollars, Euros, sterling and yen for IBRD, its World Bank Group affiliates and external clients. External clients include international financial institutions, and other official sector institutions, including central banks, sovereign wealth funds and pension funds. In some cases, these are stand-alone investment management engagements, but typically they are structured in tandem with an advisory and capacity building engagement under Treasury’s Reserves Advisory and Management Program.

Our approach to fixed income portfolio management is grounded in 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 objective of portfolio management is to deliver high risk-adjusted returns.

Investment mandates for dedicated portfolios are accepted across standard offerings: USD or EUR Short Term Duration Government Bonds, USD Agency Mortgage-Backed Securities and Global Government Bond Indices (Hedged and Unhedged).

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 a 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.