Value of skills in fixed income investments
Value of skills in fixed income investments

Summary/Abstract: In a global financial world managers face a decreasing chance for generating the added value within the investment universe. Modern economies with their currencies and government debts closely linked to each other offer smaller diversification and force investors to search new opportunities. The author outlines the essential components of an investment management process with a special focus on value of skills in asset allocation strategies. Additionally, the implementation of an imperfect foresight approach, which is understood as an alternative measure of investor’s skills, into debt security portfolio of the Polish Open Pension Funds was used. The dataset taken into account includes observations from each of 14 funds that have been functioning between 2001 and 2012. The research covers two decision making processes: first, which analyses the structure of the portfolio concerning time to maturity, second – the allocation between fixed or floating rate investment.

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