Reading 23 -- General questions -- Page 133

Strategies under stable yield assumption

For BUY AND HOLD

To generate higher returns, it says a PM may position a portfolio with longer duration and higher YTM (buy and hold) in this envirionment. (FIrst question – I’m assuming they mean with an upward sloping yield right). I understand this is basic stuff but I’m not strong in this area.

Alternatively it says,

May target segments of the yield curve where price changes are not likely to materially affect the portfolios total return.

Why would targeting these segments generate higher returns for a buy and hold investor?

Thanks, much appreciated.