Liquidity Management Strategies in Fixed Income Portfolio

As the portfolio manager for a large fixed income fund, you are tasked with ensuring ample liquidity to meet potential investor redemptions while also maximizing the yield of the portfolio. The fund holds a mix of government bonds, corporate bonds, and emerging market debt. You are assessing different liquidity management strategies to optimize the balance between risk and return.

During a recent economic downturn, the manager observed an increase in redemption requests, prompting a need to review the liquidity profile of the portfolio. To facilitate the management of the fund's liquidity needs, the following strategies are under consideration:

1. Maintain a higher portion of cash and cash-equivalents in the portfolio.

2. Invest in lower-rated corporate bonds with higher yields, which may provide additional income but may also introduce liquidity constraints.

3. Conduct regular stress testing of the portfolio to ensure that the liquidity needs can be met under adverse market conditions.

Which of the above strategies would best enhance the liquidity management within the fixed income portfolio while keeping a focus on minimizing potential losses during market stress?