Can a fund manager increase the duration of a bond portfolio? If yes, how? If not, why is it not possible to?
Yes.
However, there may be constraints on how much.
Sell short duration bonds; buy long duration bonds.
It is not a qs. of can. It is a qs. of how many ways Duration can be altered.
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Rebalance portfolio with Longer maturity Bonds
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Introduce Higher Duration Bond
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Use Swap. Where one receives fix and pays floating
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Use forwards of long duration
As long as there’s no restriction against these derivatives.