Bond Duration Manipulation

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.

  1. Rebalance portfolio with Longer maturity Bonds

  2. Introduce Higher Duration Bond

  3. Use Swap. Where one receives fix and pays floating

  4. Use forwards of long duration

As long as there’s no restriction against these derivatives.