Building Bond Ladders With Mutual Funds and ETFs

Quasi-bond ladders can be created with mutual funds or ETFs instead of individual bonds by choosing funds with differing durations.

Bond ladders are like a good set of all-season tires. They can be structured to perform well under a number of market conditions. Investors can capture higher yields in rising interest rate environments by reinvesting the proceeds from maturing bonds. When interest rates are falling, investors will benefit from having exposure to bonds that were purchas…