An exchange of one asset’s cash flows for another’s, often in fixed-income markets.
Description
An asset swap converts a bond’s fixed or floating cash flows into another type, used by family offices to tailor income streams or hedge interest rate risk. Wealth managers employ asset swaps to optimize yield or duration in fixed-income portfolios, but counterparty risk and market liquidity are concerns. Precise structuring aligns with portfolio goals. It’s a complex strategy for advanced investors.
